The answer actually lies on our spending habits and what we do with the money we worked so hard for. A lot of Filipinos spend impulsively without any thought for saving for the future. Some spend their money on unnecessary luxuries or things they do not really need. There are also those we call the “one-day millionaires,” who spend to the point of ending up with little or no cash way before the next payday. Such habits usually get us into financial trouble and consequently hinder our financial growth.
This problem is usually self-inflicted and no one can change your situation but yourself. Getting rid of bad spending habits and developing good financial practices entail a lot of effort and discipline.
Philippine Savings Bank (PSBank), through its Good To Know campaign, shares tips to help you develop good spending and saving habits to build your wealth fund for a financially-secure future.
Start by making cuts on your spending.
Penny-pinching gives you the freedom to live on your own terms (i.e. making and bringing your own lunch to work). To help you decide where to make cuts in spending, make a list of your daily, weekly, and monthly expenses. Cross out those unnecessary purchases or think of a less expensive alternative like, instead of buying coffee from your favorite coffee shop, you brew your own.
Pay yourself first.
Saving money is all about discipline. You may try to practice the 30-70 savings ratio. This works by setting 30 percent of your salary as savings, and the rest as fund for daily expenses. If this will be hard for you, you can start small by setting aside PhP100 every payday and being consistent. The important thing is for you to start saving now.
The money you set aside is the money you pay yourself. This is one way to start your financial security journey.
Make your money work for you.
Increase the amount of your savings whenever you have extra cash (i.e. bonus). Once you have enough savings, place your money in investment or higher earning deposit instruments such as time deposit or money market funds. Having a bank account also enables you to perform other financial transaction
such as bills payment and fund transfer to other accounts. PESONet and InstaPay, the two payment schemes under the National Retail Payment System (NRPS), allow seamless, secure and reliable electronic fund transfers and payments at a minimal cost.
Another option you can consider is putting a portion of your money in an investment facility. PSBank Money Market Fund is the bank’s Unit Investment Trust Fund (UITF) that is affordable, prudent and a liquid investment option especially for first time investors. It requires a minimum initial investment of PhP10,000, which you can grow in increments of PhP5,000 thereafter.
With all the hardships you undergo to earn, it is important for you to save so that you’ll have a fallback especially when something unexpected happens. The sooner you start saving for retirement, the less you will have to sock away money in the future. This also means that you have fewer worries and more fun activities as you age.
“Good to know!” is PSBank’s public awareness campaign that provides financial education, relevant information, and helpful tips on how to manage, maximize, and protect your hard-earned savings and investments.
