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Jan 20, 2012

THE HULLABALOO ABOUT SALN (And Why We All Should Have Our Own SALN)


The Impeachment of the Chief Justice and SALN

To those who are watching the Impeachment Trial of Chief Justice Corona aired every 2pm, you know that the latest buzzword (or buzzterm) is SALN which means Statement of Assets, Liabilities & Net Worth.

 

On Day 3 of the Impeachment Trial, the first witness, the Supreme Court clerk, was grilled for 3 hours and 40 minutes. The main contention was the submission of the SALN of CJ Corona as the clerk was invoking a 1989 order which rendered the SALNs of Supreme Court justices tightly guarded.

 

My husband can’t quite understand why I, who can’t stand watching teleseryes, can endure the long hours of Impeachment Trial teleseryes. (I religiously followed the Estrada Impeachment: December 2000 to January 2001). Last week when I read in the newspaper that a teleserye starring Richard Gomez and Dawn Zulueta was going to start airing on January 16, I thought I might finally watch my first teleserye. As I told my sons, “They were the most beautiful love team of our time!” But I ended up being hooked on another teleserye which also premiered on the same date: The Chief Justice Impeachment teleserye.

 

I myself wonder how I can endure the long hours of watching the Impeachment. Patience is not my virtue and I surely get annoyed by the delaying tactics of the defense, the occasional display of incompetence by the prosecution, the arrogance of some of the men in robe, but somehow even with all these (or maybe because of all these?), I get engaged in the drama and getting your viewer engaged is the key to a successful teleserye, right? Whatever your political leanings may be, you can’t help but admire the sharp intelligence of Enrile who I think is close to 100 years old! Even Cuevas, another octogenarian with jet black hair, a master of distraction with his sublectures on the proper way of conducting a trial, is undeniably brilliant. Doesn’t he just remind you of the characters in the series of children’s books by Dr. Seuss? Remember the Cat In The Hat? Green Eggs and Ham? He really reminds me of these characters especially when he flashes his mischievous smile as he says, “Yer Ener” (Your Honor).

 

After long discussions on whether to compel the witness to hand the documents or not, and after everyone has taken the stand to claim his airtime (well, maybe except Senator Lito Lapid), the clerk finally relented and handed the subpoenaed SALNs to the court.

 

We may probably be hearing more about SALN in the next days as the drama unfolds but what I want to discuss now is the importance of having a SALN not just among public officials but among all of us, even our kids!

 

It’s one of my unusual parenting techniques - I taught my children to prepare their own Balance Sheet, their own SALN at a very young age. Weird huh?

 

Let me explain why I advocate the preparation of SALN among everyone.

 

We all know that it’s important to save and invest for our future, especially for our old age. And I believe that it’s never too early to start with your retirement nest egg. But how come very few are doing it? It’s because most people are not good in delaying gratification. For sure, many will fail if they take an adult version of the Marshmallow Test. Saving and investing for the future is essentially delaying gratification for a better satisfaction in the future. I read somewhere that people fail to save and invest for the future because they tend to overestimate the pleasure they can derive at the present time and underestimate the pain that they may experience at a future time. Bahala na! becomes the attitude.

 

It’s understandable why delaying gratification is difficult. The only time frame that we have and sure of is the NOW. The future? Who knows if we would still be around? Besides, our society has been so structured that we want to have everything now. We want that pleasure now. And when you save for the future, you don’t even know exactly how many years you’re looking at.

 

In the unknown gap between now and the future, we have to have some form of mini gratifications to sustain us. We should be able to feel and enjoy the fruits of our labor. On top of treating ourselves to the good things in life that we can afford, we should find a way to enjoy what we save and invest NOW without spending it.

 

A few years ago I realized that one of the things that helped me keep this habit of setting aside savings since I was a little girl was that I recorded my expenses and inflows. Then early on in our marriage, I prepared our Balance Sheet, our SALN which we update every quarter. And guess what? Seeing our assets (particularly our earning assets) grow give us a high and motivates us to set aside money religiously. It provides us the mini gratifications today as we save up for the future. It’s like setting mini milestones for our long term goal.

 

Our personal SALN is best coupled with our Income Statement and Cashflow. When we see where our money goes, we can easily control outflows if the need arises. We can also check if what we spend heavily on aligns with our personal values. You’ll be surprised that what you think offhand as your biggest expenses like basic and important needs are not so, but the unimportant and can-do-without expenses which I call “chichirya” expenses. If you know how much your cost of living is today, it is easier for you to project your cost of living in your old age; thus, it’s easier to set the amount for your retirement fund.

 

When my sons were still very young, I made their individual SALNs which recorded their respective savings and investments. I updated them every quarter together with ours. A few years ago, I turned over my sons’ SALNs to them, for them to update on a quarterly basis. And when I did they were delighted to see how much they had and it heightened their awareness of wealth accumulation. A SALN or Balance Sheet is just a picture of one’s assets (things of value), Liabilities (debts) and Net Worth (Assets minus Liabilities) and I cannot overemphasize the power of images in understanding and remembering abstract concepts like money. It became easier for my sons to delay purchasing gizmos that they can easily afford with their own money because the picture of their Net Worth is clear in their mind. It also made them set their own financial goals at a young age. They are able to go beyond the usual “Save so that you have something to spend.” They also save so that they have something to invest and grow their Net Worth. Seeing their Net Worth grow has become their mini gratification that they can enjoy NOW as they work on their long term goals.

 

So don’t you think we should all have our SALNs? I dream of the day when everyone will be aware of his Net Worth just how one is aware of his vital statistics and other important numbers. And just like how you keep your waistline and body weight a guarded secret, you may do so with your SALN figures (well, so long as you don’t run for public office or accept a government post that would require you to).

 

As we approach the New Lunar Year, let’s make preparing our personal SALN one of our resolutions.  Happy Year of the Dragon!

 

                                                                                           Rose

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Total of 5 comments

Guest

I can't believe I've been going for years wihuott knowing that.

Feb 28, 2012 / 07:48 pm
rose@raisingpinoyboys.com

@Jan 20, 2012 Guest - Thank you. I really believe that our prosperity as a nation depends upon the personal financial prosperity of each of us as individuals. Cheers to SALN! :)

Jan 29, 2012 / 12:04 am
rose@raisingpinoyboys.com

@Jan 27, 2012 Guest - Thank you. Money Matters is the favorite chapter of a lot of readers. Well it's probably because it's quite unusual (weird?) to read a story about little kids who have their own SALNs, and because Money does Matter :)

Jan 29, 2012 / 12:04 am
Guest

Very good article and lesson to pass on...Congrats. You are really carving out your niche with this topic of raising Pinoy Boys.

Jan 27, 2012 / 12:40 am
Guest

Interesting angle on SALN when related to our personal finance. This article puts in right perspective not only the purpose for proper governance but also its "small" but powerful benefits to make savings and investments a habbit..

Jan 20, 2012 / 06:18 pm
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