Are you one of those 23 million Filipino adults who struggle with your financial decisions? Whether you make a lot of money or a little or have huge amounts of credit card debt or not, finances are more than likely concern in many Filipino households.
Mikka Montero, a financial journalist from Allthebestloans.com, notes that financial problems are typical and involve tough problems such as losing a job, not having sufficient money, and conflicting financial values.
Have you ever experienced a financial crisis in your life? Do you feel your finances are holding you back from reaching your dreams? This post will give a quick overview of the common money difficulties of Filipinos and some tips on how to solve financial problems.
Financial Problem #1. You Have Bad Savings Habit
Have you ever asked yourself, “Why can’t I save money?” and found yourself wondering about the reasons why. Many of us have been there. In fact, the number of unbanked Filipino adults in 2019 stood at 51.2 million, or seventy-one percent of the total adult population.
The concept of saving is simple, but the actual act can be difficult for some. If you cannot save money, evaluating and realizing why you can’t save is essential.
Here are some tips on how to solve financial problem:
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Have a savings goal
You cannot save money because you do not have a goal to work towards. Remember that having a goal and something concrete that your savings will go towards offers a starting point for making a plan to reach that goal.
It also makes it simple to see that trivial amounts do add up. Tracking your progress and noticing yourself getting closer to accomplishing your goal is encouragement and motivation.
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Create a designated savings account
To save money quickly, you need to separate the money you spend on your daily needs from the money you wish to save. That means creating a designated savings account.
Doing so reduces the risk of plunging into your savings to cover your day-to-day expenses. As an alternative, it supports you to stick within your daily budget while keeping the savings safe from temptation.
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Understand your finances
Our most important tip on how to handle financial problem is quite simple: learn to budget. If you are in control of your budget, that means you are also in control of your finances.
That means understanding all your outgoing and incoming revenue streams, including monthly bills, debt repayments, and savings contributions.
Financial Problem #2: You’re Living Paycheck to Paycheck
Filipinos living paycheck to paycheck can feel like they are on an endless financial treadmill. This is not uncommon these days. Recent studies recommend that most Filipinos do just that, making it impossible to invest and save.
Also, overspending can be part of the issue. Still, even more often, Filipinos get squeezed through no fault of their own—high costs for essentials like college and healthcare, unpredictable income, and low wages.
Meanwhile, even Filipinos with high salaries can be trapped in a seemingly never-ending cycle. Here are some tips on how to solve financial problem:
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Search for ways to increase opportunity and income
This can indicate side hustles, part-time employment, or turning your hobby into a money-making enterprise. You can also consider improving your skills with higher training or advanced designations that can make you more valuable to an employer.
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Stay away from lifestyle creep
Not living paycheck to paycheck indicates you have extra money—not only to spend but to save. That is where your mindset is essential.
For some Filipinos, having more money suggests spending more. It is referred to as lifestyle creep. Do not fall for it. Before you buy something, ask yourself if that purchase will set you back or move you forward.
No matter how much you earn, you will never break the cycle if you only spend as much or more than you make.
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Set aside from your paycheck
Redirect 10% of your direct deposit into your savings account, and even if you begin with only PHP500 a paycheck, you’ll begin to feel more self-assured about managing your finances.
That indicates your savings comes out of every paycheck, so you do not touch it. If it is too tempting having the checking and savings account at the same bank because you can transfer it back to your checking, consider having the savings account at another bank.
Financial Problem #3. You Have Too Much Debt
Let’s be honest. No one tries to get in debt. It is just one thing that happens without our notice, or may feel as if it’s out of our control.
However, staying out of debt is possible. Follow these tips on how to solve financial problem:
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Don’t buy it if you can’t afford it without using a credit card
One of the riskiest tactics to having a credit card is breathing under the impression that you can afford things you really don’t have the money to afford. As a rule, if you cannot pay something in cash, you cannot afford it with a card.
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Pay off your credit card balances in full
The ideal way to keep your spending under control is to pay your credit card balances as you go. Hence, if you purchase with your card, send your payment the next day before everything gets in the way.
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Have an emergency fund
Emergency savings are essential for those “just in case” circumstances. Have at least a six-month of your salary saved up. That will be something to cover your expenses if you have an injury that stops you from working, lose your job, or when you need an unexpected but necessary cost.
Final Thoughts
Financial problems can often seem devastating and impossible to overcome. They also often make a major source of financial anxiety for most Filipinos. But we hope this post will help you give the confidence you need to take on your financial problems one step at a time, so you can confidently conquer your anxiety and move forward.
All of this takes commitment and time, but you can do it. You simply have to start.
