Cash Flow for the Poor?

[Arizona Kid]

3 hours ago, Gary D said:

Actually meant didn't poll my nieces

That's a good thing..I think. 

[JJReyes]

13 hours ago, Jack Peterson said:

As the title is Cash Flow for the Poor? I sit and wonder how this would work, Most banks require a Hold amount (mine is 5.000 peso) this means I have to keep a minimum of this amount to maintain the account. I believe that should that amount fall below the figure there will charges and I believe if it happens often they will close the account. I really am not to sure that the mentioned "Poor" are going to have this sort of Money left in the Bank and I am almost sure that the majority would sooner have the 5.000 peso ( or whatever the hold balance is) in their pocket, I firmly believe this is why the less advantaged Locals never have nor I fear, ever wanting a bank account. JMHO But....................................

Unless the rules have changed, the P5000 minimum deposit is for checking accounts.  The minimum for savings might be much lower like P100.  There is also a difference between commercial and, for example, rural banks.

A long time ago, the governor of Bangko Sentral wanted to encourage high school students to open savings accounts.  Nearly all the banks protested claiming the effort would cost money in terms of personnel time.  Only a few banks were willing to participate.  The process was to physically accompany the students from school to the bank to open an account and learn about the financial system.  Participant banks over a one year period found tens of thousands of new accounts being opened at their branches.  The post program study showed that many in the lower and middle income bracket were intimidated and they were unfamiliar with opening an account.  It was high school students showing the relatives the procedure.  The result was tens of millions in cash were flushed out from "under the mattress."

Edited April 1, 2019 by JJReyes

[Old55]

Thanks for sharing this JJ what a great story.

[Jack Peterson]

 While we as Westerners are confident ( to a large degree) about our Savings and Banking in general we should I think give some thought to how the locals mind can work I can and do agree with much that has been said here and put my thoughts in already But talking in general among the Locals I know ( that listened) I came up on this Yesterday and it brought home much of what I had been told by various low earners, it is Too long to put up but the first section  says a lot and then the Link tells the rest.  5 Reasons Filipinos Don't Save Money

******** 

Did you know that the Philippines has one of the lowest savings rates in Southeast Asia? According to a Bangko Sentral ng Pilipinas survey in 2014, only 1 in 4 Filipino households has savings.

This is worrying, as it means that in the event of an emergency or sickness, majority of Filipinos have no means to fund their needs. This also implies that they could fall into debt or worse, not be able to cover their emergency needs.

What keeps most Filipinos from saving? Unfortunately there is no one answer. It's been argued that the Filipinos’ fatalistic or easy-go-lucky attitude prevent many from getting into the savings habit. There is also the lack of discipline and commitment to stay on the savings path. After all, building up savings starts with giving up a portion of your regular income and having the discipline to do this continuously, while resisting the urge to dip into these funds for whimsical reasons.

Let’s look at the 5 most common reasons cited by Filipinos for not saving, and, if it applies to you, we also share the steps you can take to address this.******

https://news.abs-cbn.com/business/09/25/17/5-reasons-filipinos-dont-save-money

 

 Jack 

 Morning All

[manofthecoldland]

13 hours ago, JJReyes said:

Unless the rules have changed, the P5000 minimum deposit is for checking accounts.  The minimum for savings might be much lower like P100.  There is also a difference between commercial and, for example, rural banks.

FYI :    My wife's BDO savings account requires a min. maintained balance of P 2,000 in order to avoid monthly fees/penalties. 

   She did not understand that at first, and would empty the account when receiving remittance, thereby invoking the fee/penalty deductions. It set off a self-perpetuating loss mechanism when she started making sure to withdraw it all whenever I put money into the account because she assumed that the money was "disappearing" due to the not so unusual standards re fraud and theft on a small scale. Since they do not (I think) mail out monthly account statements, and she never has bothered to register to access her account on-line, she only uses ATM receipts to keep track of her money. Therefore, it seemed it was 'disappearing' into the bank's secret theft system and just figured it was one of the normal corruption costs that go along with having bank account privileges I think.  

   We got it sorted when I became aware of the problem and jointly sat down with her with a bank clerk to make it clear and drive home the point of maintaining more than the min. balance at all times.

   She also had no inkling as to why her Metro acct. was closed by the bank one time....I stopped funneling money through it, and it was inactive for too long, thus triggering the automatic closure.

   For people not raised in a society wide banking culture, where you learn these things early in life, the fine points and details that go along with system use may evade them until confronted with the problem. She has no problem dealing with real estate purchases, her lawyers, sending money through Smart Money and a host of other financial transactions, but when it comes to some banking issues, she missed the boat this time.  

   The point is that people here have to have a practical reason to be specifically educated in these matters or they will not bother learning the operational details... just like anything else in our lives.

   If you have little or no 'extra money' for most of your life, you have little or no reason to learn how consumer banking operates. Also, very little interest in such abstruse matters.  

  If they do come into money, most people have a steep financial management learning curve to ascend, and it is steeper in poorer countries.  IMHO

[hk blues]

6 hours ago, Jack Peterson said:

 While we as Westerners are confident ( to a large degree) about our Savings and Banking in general we should I think give some thought to how the locals mind can work I can and do agree with much that has been said here and put my thoughts in already But talking in general among the Locals I know ( that listened) I came up on this Yesterday and it brought home much of what I had been told by various low earners, it is Too long to put up but the first section  says a lot and then the Link tells the rest.  5 Reasons Filipinos Don't Save Money

******** 

Did you know that the Philippines has one of the lowest savings rates in Southeast Asia? According to a Bangko Sentral ng Pilipinas survey in 2014, only 1 in 4 Filipino households has savings.

This is worrying, as it means that in the event of an emergency or sickness, majority of Filipinos have no means to fund their needs. This also implies that they could fall into debt or worse, not be able to cover their emergency needs.

What keeps most Filipinos from saving? Unfortunately there is no one answer. It's been argued that the Filipinos’ fatalistic or easy-go-lucky attitude prevent many from getting into the savings habit. There is also the lack of discipline and commitment to stay on the savings path. After all, building up savings starts with giving up a portion of your regular income and having the discipline to do this continuously, while resisting the urge to dip into these funds for whimsical reasons.

Let’s look at the 5 most common reasons cited by Filipinos for not saving, and, if it applies to you, we also share the steps you can take to address this.******

https://news.abs-cbn.com/business/09/25/17/5-reasons-filipinos-dont-save-money

 

 Jack 

 Morning All

I read through the 5 reasons but in all honesty could have stopped after Reason No1 - Not having enough money to save.  I think that explains pretty much why 1 in 4 have no savings.  The only thing that surprises me is that it isn't 2 in 4 households who have no savings.

For some perspective, 71% of Americans don't have enough savings to survive 6 months.

 

[Jack Peterson]

15 minutes ago, hk blues said:

No1 - Not having enough money to save. 

How so very true  

I was talking to my wife last night about Banking and she was telling me that at least 50% of the employees at her company  Don't have a bank account but mainly can't meet the Requirements that some banks want. It transpires that the Company Run their own Credit Department based on Cooperative membership dues and Staff borrow (Some Heavily ) throughout the Month, so Pay day ( For those without a bank Account are paid Cash, now after all the Months Borrowings and payments on salary loans are deducted sometimes, there is not very much to come, I guess it is the same with our Construction workers and House helps, they have these Advances and many forget this has to be paid back before they are given wages at the end of the Week/Month or whatever, To me it is no wonder that there is nothing to save and there won't be until they get their credit and borrowings under control  Times are many where I sit and have a beer at my Sorry, sorry and watch them pay their Bill for the week and have a beer or two, Good they can get this Credit to live but one has to wonder if they overspend on credit. at the Store.

 Just as a for instance ( and much to my dislike) our helper as good as she is, has an account with my wife that is about 5.500 peso in the Red on wages Advanced. When she Goes home at the end of the Month for a week I rather think she will in for a shock. But it's OK, I know Azon will make sure she is OK 

[hk blues]

7 minutes ago, Jack Peterson said:

How so very true  

I was talking to my wife last night about Banking and she was telling me that at least 50% of the employees at her company  Don't have a bank account but mainly can't meet the Requirements that some banks want. It transpires that the Company Run their own Credit Department based on Cooperative membership dues and Staff borrow (Some Heavily ) throughout the Month, so Pay day ( For those without a bank Account are paid Cash, now after all the Months Borrowings and payments on salary loans are deducted sometimes, there is not very much to come, I guess it is the same with our Construction workers and House helps, they have these Advances and many forget this has to be paid back before they are given wages at the end of the Week/Month or whatever, To me it is no wonder that there is nothing to save and there won't be until they get their credit and borrowings under control  Times are many where I sit and have a beer at my Sorry, sorry and watch them pay their Bill for the week and have a beer or two, Good they can get this Credit to live but one has to wonder if they overspend on credit. at the Store.

 Just as a for instance ( and much to my dislike) our helper as good as she is, has an account with my wife that is about 5.500 peso in the Red on wages Advanced. When she Goes home at the end of the Month for a week I rather think she will in for a shock. But it's OK, I know Azon will make sure she is OK 

One of the main problems here is that there is easily available credit pretty much everywhere you look - mostly informal with horrendous  interest rates.  I have a neighbour involved in such and there is a regular stream of customers - interestingly they all drive up in their expensive cars which they obviously cannot afford if they are borrowing from such informal lenders!  

Like pretty much all of us on here, we help out neighbours etc etc with small loans but I always tell my wife not to ask me if the amount is more than 5K - that's my ceiling and I stick to I to avoid sleepless nights and falling out with the neighbours.  

[stevewool]

1 minute ago, hk blues said:

 

Like pretty much all of us on here, we help out neighbours etc etc with small loans but I always tell my wife not to ask me if the amount is more than 5K - that's my ceiling and I stick to I to avoid sleepless nights and falling out with the neighbours.  

Do you always get back what you loan out .

[Jack Peterson]

1 minute ago, hk blues said:

we help out neighbours etc etc with small loans

Same same hk, we ( well her indoors ) charges 1% if over 1500 peso lent and repaid within a month which will go to 2 % after 1 month ( I stay out of it for obvious reasons) but she has been doing this for so many years without problem so