Paluwagan

[Dakila]

How does the interest in the paluwagan work?

So is it any different if you saved say 12x 100 pesos and get 1200 pesos at the end of the year, or join a paluwagan and chip in 100 pesos per month and get 1200 at the end of the year (or whenever your name gets picked)...

Sorry I have heard of this before, in fact there was a popular one in our neighborhood in Manila, but I don't seem to get the point? (except of course if the person does not have a bank account..)

Thanks,
Daks

[lastlid]

How does the interest in the paluwagan work?

So is it any different if you saved say 12x 100 pesos and get 1200 pesos at the end of the year, or join a paluwagan and chip in 100 pesos per month and get 1200 at the end of the year (or whenever your name gets picked)...

Sorry I have heard of this before, in fact there was a popular one in our neighborhood in Manila, but I don't seem to get the point? (except of course if the person does not have a bank account..)

Thanks,
Daks

From what my wife said, there is no interest. Just a way of forcing yourself to save as part of a group. Gives one an incentive not to spend it immediately you get it. She explained that in her mother's group, people elect a month when they get a payout....it could be December for Xmas or in a month when you intend to go on vacation or to save for the special present that you mean to get someone.......from what she says it can work but I can also see how it can fail......that's why it depends on the group that you are a part of................apparently....