My consulting and financial literacy work has at times taken me to some of the country’s poorest provinces. I have encountered many good, honest, hardworking people who still fall prey to one of our culture’s more enduring traditions: preparing extravagant food during fiestas, even if it breaks the bank.
In one town, the residents would use up all of their employers’ loan facilities as early as summer, even to the point of borrowing against their 13th month pay, just to be able to prepare food for the town fiesta. And if employee loan facilities fall short, there are always personal loans from both licensed and unlicensed lenders outside the company.
The Human Resources head of one of the companies I was consulting for even commented that during the town fiesta, he would be invited to the houses of their employees. And he would see the exact same viands, desserts and drinks served. Top himself, he was thinking that these people could have saved if they just pooled their money and prepared one long-table for each street or even village.
Here’s a lengthy but still-incomplete list of fiestas, which still has to include the fiestas of patron saints in small towns and barangays. (http://wikitravel.org/en/Festivals_and_Events_in_the_Philippines).
When asked why residents have to prepare lavishly, the common answer is “tradition.” A family runs the risk of facing social ridicule if it did not serve food during the annual fiesta. Never mind that there is a need to save for maybe a new house elsewhere or a car or tuition or to help send a relative to work abroad–saving face is important.
One solution is as proposed by the Human Resources head I mentioned earlier, and that is the pooling of funds. “Cooperativism” has long existed in the country. We could even say that it is an extension of the “bayanihan” spirit. So why not work together for a common celebration to benefit from economies of scale. Of course, there is a need to persuade neighbors that tradition will not look unkindly on a home that opts to serve food collectively rather than individually.
Another way is to move out of the town where practices are steeped in tradition and move to one where people are likely to be less neighborly, like in urban centers; there is just the need to ensure that there is no small version of the hometown in the new place.
Regardless of the strategy, savings will naturally occur, sooner or later. And to fully take advantage of breaking the tradition (even if in part), these savings have to be deployed as investments. And the simplest way is also in the bayanihan or collective way, again through the pooling of funds. And that you can take to the bank.
By the way, literally there are options other than the bank for deploying savings as investments in a pooled way. The others are variable life insurance, mutual funds and again the old cooperatives (i.e. but this time, just invest; do not borrow).
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(Originally written by Efren Ll. Cruz, RFP at http://www.savingstips.com.ph)
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