Traffic jam
Like traffic, our personal financial situation depends a lot on the way we behave toward money
Traffic has been a part of the normal way of life here in Manila. In fact, it has always been the No. 1 reason for getting late in appointments. Being late has already been the habit here to the point that even our flag carrier Philippine Airlines (PAL) has been tagged jokingly as Plane Always Late, even if there is no air traffic.
Just recently, the pending road projects for Metro Manila have already been given the go signal… motorists were already advised of the impending monster traffic jam which will last for at least two years.
What really causes traffic in Metro Manila?
A study by the government showed that the volume of the vehicles has a lot to do with the worsening traffic situation. So they enforced a number-coding scheme, which will diminish the volume of vehicles on the road. Obviously, even if the government denies it, the project is a failure because the traffic situation did not improve. They failed to realize that the number- coding system is only a short-term solution to a long-term problem. The worsening traffic situation is man-made. The truth of the matter is that behavior is the root of the problem. One can simply observe how drivers of public-utility vehicles (PUVs) are so undisciplined, such as loading and unloading anywhere, excessive loading time and undisciplined driving, etc. These kinds of attitude oftentimes result to the clogging of the thoroughfare.
Another factor is the obsolete traffic-light system we have. The timing of the traffic lights is not suitable anymore to the number of vehicles. The stop mode is longer than the green mode, resulting to a monstrous traffic.
What has this got to do with our personal finance?
Like traffic, our personal financial situation depends a lot on the way we behave toward money. A lot of people think that personal finance is all about numbers when, in fact, there are people who are very good in math, yet fall victim to their behavior and emotion toward money. To prove that behavior is really the problem, try to remember what happened to the Christmas bonuses that we received?
As an example, I have a friend who invests his yearly bonuses and incentives. The reason for his behavior is that since he was accustomed to live below his means, any extra money he received is already an excess on his part, and the only way he can spend it is to invest it. Such a powerful mind-set!
In most cases, a lot of people find it hard to fast-track their finances. Just like the road traffic that hampers the flow of vehicles, financial traffic also hampers the improvement of one’s personal finance.
Below are some behaviors that cause our personal finance traffic jam:
1. Procrastination. This means delaying for tomorrow what we can do for today. A lot of people who are suffering financially procrastinated during their younger years. The longer they delay, the harder it is for them to start. This is similar to PUVs which line up too long just to fill up the seats. The later the driver decides to go, the harder it is to ease up the traffic. Both situation can be compared to a clogged artery in the heart, where the blood does not flow anymore, resulting to death. Time is money, so start early.
2. Habitual indebtedness. As the Holy Scripture says, the borrower is slave to the lender. By being always in debt, one has to work just to pay the loan and its interest, thus resulting to a vicious cycle. The only way to eliminate debt is to live simply and be content.
3. Instant gratification. This is one of the worst habits to have. This is the reason majority lives from paycheck to paycheck. Most people have already spent the money they have not yet earned. The only way to counter this is to have the patience to wait.
4. Choosing entertainment over education. It has been said that rich people educate themselves and poor people entertain themselves. But a lot of middle-income earners simply avoid or ignore informative seminars that can improve their lives. They even shun away from paid seminars, saying the fees are expensive. They did not think that if education is expensive, isn’t ignorance a lot more expensive?
As the road repair begins, the government calls for our sacrifice and patience, as later we will reap the benefit of having a better road network and smooth traffic.
For our personal finance, we also need sacrifices and patience so that later, we will have a very smooth cash flow, especially when our golden years arrive.
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Edmund Lao is a Registered Financial Planner of RFP Philippines. A sales engineer by profession, he is an advocate of financial planning.
Source: http://www.businessmirror.com.ph/index.php/en/business/banking-finance/29828-traffic-jam
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