There are times that the salary of a teacher for a month is not enough to sustain some of their needs. There are some unexpected expenses which are not included in the budget. It is unavoidable to have unforeseen costs which leave us no choice but to borrow money or have a loan from different financial institutions. However, there are some teachers who are failing to make a wise decision regarding debts and this can put at risk their financial stability and even their reputation. In reality, there are many teachers who are not able to pay their debts regularly and it results to a higher interest rate which makes them harder to pay their loans.
According to a report, public school teachers have their debts nearing the P300-billion mark which is very alarming because it can create negative impacts not only in their personal life but also in their profession as well. Due to this problem, Education Secretary Leonor Briones said that teachers need financial literacy. In fact, the Department of Education launched Financial Literacy Program for Schools in partnership with Bangko Sentral ng Pilipinas and BDO Foundation in Mandaluyong in able to help the teachers avoid such debts.
It is very important to educate teachers in terms of financial because it can help them with financial decisions which consider their attitudes and behavior in possessing and spending money wisely. When they are financially literate, they are able to make wise decisions first before having debts, to rationalize if they really need to have loan and how to handle their finances. Financial education can also avoid them from being victims of different financial institutions.
Alanna Ritchie (2015), handling finances the right way should always be a priority and it should drive your daily spending and saving decisions. According to her, budgeting is one of the first building blocks of a successful personal finance plan and “budgeting requires that you analyze and, likely, change your spending habits and instead of your money controlling you, you control your money.” It also develops habits to save, avoid financial crisis and maintain peace of mind.
Further, saving is also an essential component in budgeting because it is important to have reserved money for some emergencies or unexpected expenses. This can actually save many teachers from debts and financial problems can be avoided. There would also be less problem to be encountered and less hassle because loan from different financial institutions can be stressful because of several procedures and requirements. Teachers also do not need to worry about monthly dues because of loan and debts.
If a person is financially illiterate, Investopedia said that “financial illiteracy causes many people to become victims of predatory lending, subprime mortgages, and fraud and high interest rates, potentially resulting in bad credit, bankruptcy or foreclosure.” Illitercy can also lead to poor decision making and large amount of debts because of not being knowledgeable enough in handling finances and how loans work. They are illiterate of the disadvantages and consequences of their decisions when it comes to finances.
Even teachers commit mistakes and sometimes have wrong decisions that is why programs regarding financial literacy are important. They must participate with the trainings and seminars regarding handling finances because these can actually save them from future conflicts and poor decisions. There is nothing embarrassing in reaching out for help. What is embarrassing is having large amount of debts and was not able to pay them. As long as there is still chance of avoiding these conflicts, teachers must help themselves to be educated because this can actually save their reputation and save them from worries financial problems.