Why Financial Knowledge is not Enough To Get You Out of Poverty

Many Filipinos have been desperately calling the government to help low-income people work their way out of poverty by stamping out corruption, lowering the prices of basic commodities, increasing the salaries, reducing taxes, beating inflation, and teaching financial literacy.

But helping people get out of poverty does not only involve money. The effort requires addressing far more deeper factors that are keeping many people stuck in financial struggles.

Just like many financial gurus and coaches, I also have a great interest in finding effective methods to help people from the low- to middle-income classes become more financially-fit. One way that our non-profit organization Angat Pilipinas Coalition for Financial Literacy is doing it is through teaching community classes and public school visits around the country on a monthly basis.

Through the past several years, we’ve conducted learning sessions on basic financial skills like budgeting, money management, or fundamental investing. We’ve also included financial stewardship and money mindset in all of our classes.

Interestingly, most of our students would either want to ignore or completely skip the mindset segment of our classes. There seems to be a common impression that financial knowledge is all they need to grow money. But then our experience and studies show that this is not true.

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We asked the kids in Baseco Compound in Manila to write down their dreams and encouraged them to believe that they can achieve them.

The Filipinos’ False Limiting Beliefs

Helping the poor to increase their financial literacy is a good start, but it is never enough to bail them out of poverty.

My Irish friend Mike Grogan, who has decided to reside in the Philippines for good, has been writing books about the great potential of the Filipino youth. For the past 4 years, Mike has called Philippines his home and has been very passionate in bringing out the best in Filipinos.

In his talks, Mike mentions about “false limiting beliefs” that serves as the major foundation of Filipinos’ weakness which is the lack of confidence in themselves. This is the same challenge that we usually face whenever we visit poor communities to teach and conduct our outreach programs.

Many Filipinos are not aware that their false cultural beliefs are what’s holding them back to progress. Some of these false limiting beliefs are:

Defeatism: “Hindi na uunlad ang buhay ko dito.”
Slave Mentality: The belief that working for someone else is the only way to survive.
Crab Mentality: The belief where anyone reaches for success could be ignored or worst, pulled back down by the community
• Victim Mentality:  “Kasalanan ko ito at kasalanan ng mga tao at gobyerno kaya walang nang magandang pagbabago.
False Financial Prophets: Believing only on the financial advice of a person in the community who shows off a brand new car or thick bundles of cash without evaluating the credibility of the person or that advice.

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How To Teach Yourself and Others To Overcome False Limiting Beliefs

One size does not fit all and telling someone about a better way does not automatically work. You have to find a way to expose them to it with your experience.

A dream is a place in the future. But if you don’t take good care of your urgent needs first, you can’t see a good future ahead of you.

Our experience in teaching the poor and the marginalized has showed us how important it is to consider people’s beliefs and emotions about money. And this is very essential if you are someone who’s part of an advocacy that is working to help people get out of poverty.

Having more money or more financial knowledge is simply not enough to help people in poverty or those with bad debts, the scammed, and those who did not finish school.

The less stressful way to advise yourself and other people who are struggling financially is to zero in on the mechanics of managing money. If you really want to help people make lasting changes in their behavior towards money, then you have to find ways to help them look deeper.

This goes out to both the poor and those who currently have loads of windfalls. You need to believe in your strength to realize that you can do what you want to achieve.

If you are an employer, a parent, a teacher, or a community leader then you can help in eliminating false limiting beliefs by giving your employees, your children, your students, or your constituents the opportunities where they can become their very best.

But that’s just one example. I’ll give more stories and advise on my next articles.

Rock your way to abundance!

#moneyliferockandroll

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