Last month, we asked followers of our Facebook page to share common money myths that they feel Filipinos believe. The responses have been compiled into a two-part article where we debunk these myths. Last week, we discussed myths related to cash vs. credit card, education vs. financial success and pampering yourself. In this second part, we present our arguments against the following three myths:
Myth No. 5: It’s better to safeguard your cash personally instead of placing it in a bank.
You don’t trust the banking system and choose to hide your money in your home instead, but be warned of the hazards:
• Your money will stagnate. One thing’s for sure, money can’t earn interest if it’s just stashed away under the mattress. Plus, who’s to say that inflation won’t eat up your savings?
• A burglar can take all your hard work away. Banks have security systems and protective technologies in place. Does your house have them, too? Even if you have home insurance, keep in mind that there’s a limit to the claims you can make.
• You might forget where you hid your cash. This may sound absurd but there’s a chance you’ll forget where you hide your money. Before you laugh at the idea, bring to mind a story featured in the October 8, 2017 episode of Kapuso Mo, Jessica Soho where an old man forgot that he had P200,000.00 hidden away. It was too late when someone found the banknotes because they were already worthless. Imagine how differently events could have turned out if the old man had chosen to keep his money in the bank.
Myth No. 6: Insurance is just a waste of money.
It’s easy to believe that insurance companies are a scam since they are notorious for soliciting payments for emergency scenarios that may or may not happen. Still, this doesn’t mean you should close your mind to the possible benefits of getting insurance. The truth is that life is unpredictable—you can’t always know what’s waiting for you right around the corner. Insurance companies exist for a reason and that is to protect you in times of misfortune. Think of them as a lifeline for when you fall victim to life’s calamities.
The best thing about having insurance is that it can help reduce stress levels during difficult times. With little to worry about, you can focus on recovering what you lost and rebuilding your life or business from the ground up. Unexpected events can shake you to the core but with insurance to count on, you can at least minimize the damage.
Myth No. 7: You can live off of your SSS pension upon retirement.
The government is helping us save for the future via the Social Security System. However, many of us believe that SSS retirement benefits will be enough to sustain us until our last breath. The harsh truth is that the monthly stipend we will receive upon retirement will certainly not be enough for a comfortable life. If we want a better retirement, we should start saving and investing today.
So, here’s the real challenge. If you really want to secure financial success, you have to do it the right way: through hard work and persistence. Forge your own path and take no shortcuts. Do that and you’ll be well on your way to a prosperous life. (For more personal finance tips, visit https://www.moneymax.ph/blog/)
Munmun Nath is the managing director of MoneyMax.ph, the Philippines’ leading comparison website for insurance, credit cards and loans. We want to help you save money through free and fair financial information, so please tweet us at @MoneyMaxPH, like us on Facebook: MoneyMax.ph, and email your comments to firstname.lastname@example.org. For more information, visit our website: www.MoneyMax.ph.