Not all Filipinos have the knowledge and information on how to manage their finances. Thus, I summarized the money management habits I got from my experiences during my financial journey.

Not only you but also I was guilty about these poor habits. Good thing I realized them when I was younger, and I was able to correct and overcome some of these.

1. Not having a savings account particularly for life savings

Most Filipinos do not have a savings account. I used to spend first and then save last because of the mindset I had, that is, I am secured with my day time job. Then, I thought that it is ok to spend because salary would come up on the next 15 days.

This practice became a cycle until I realized that I didn’t have savings in my bank account after many years of working.

Most of the time, only the maintaining balance was left. The other times, the remaining amount was only sufficient to survive the days until the next “sweldo day.”

You need to do the following to overcome this poor money management habit:

  1. Open a savings bank account.
  2. To start, put at least 20 percent of your income to your savings account. It may hurt at first, but it won’t hurt anymore as soon as it becomes a habit.
  3. Never take any amount from your savings account. I suggest that you apply for a passbook savings account without an ATM card to prevent your impulsive mind to withdraw from your account, given that the withdrawal process requires you to fall in line, which usually takes a lot of time.

2. Spending on unnecessary things

I asked some of my friends and colleagues about their worst poor money management habits. Most of them said that they choose to ride a taxi instead of a cheap transportation method even though their destination is very near.

However, they tend to ride on a cheaper means of transportation when they have used up nearly all their money. Some of them also spend on expensive coffees and teas even though it is unnecessary. They also eat out for lunch, even though they are used to bringing packed lunches. However, during the days when they have limited cash, they opt to bring packed lunch from home.

They can also avoid buying expensive coffees during these times.

You need to do the following to overcome this poor money management habit:

  1. It is alright to ride cabs or taxis but only when necessary. In a usual circumstance, use a cheap means of transportation. Doing so won’t make you less of a person, given that you are used to doing it. If the place is just near, take a walk. Aside from saving money, you can lose some extra calories. Moreover, walking has health benefits.
  2. Buying expensive coffees is tempting, but hold your horses first and delay your gratification. You can have the powdered cappuccino that you can buy from a grocery. They basically taste the same. The catch? You can even have it every day. However, you can still opt for the expensive one, but only as a reward for yourself when you accomplish something.
  3. Eating out for lunch. Continue bringing packed lunches if you are used to doing it. Doing so is not only economical but also better because it is prepared at home. Eat out once in a while but not almost every day. You may eat out during a Saturday or Sunday.

The key here is moderation, given that spending on the things mentioned earlier is not the actual problem. You must observe moderation on spending the things that you want.

The preceding tips may be a great alternative for you, particularly if you have a tight budget.

3. Failure to monitor how much money have been spent

Not accounting the amount of money spent is one of the common problems of Filipinos who have poor money management habits. They always fail to monitor the ins and outs of their finances. Some of them are even in denial on the amount of money left on their bank accounts.

By the end of the spending spree, they ask themselves, “Where did my money go?” This question can be answered with the things that you spend, which are not monitored properly. There are a lot of mobile applications out there that can help you monitor your finances.

You need to do the following to overcome this poor money management habit:

  1. Do it manually. It may sound awkward to jot down those numbers on a piece of paper, but running out of money in your pocket is considerably awkward. If you have a planner or a journal, then use it. You may have those journals released by some coffee shops during the Christmas season. Use them and write those numbers on those journals. If you don’t have a journal or a planner, you can buy a small notebook. Don’t mind if you look like the traditional tax collector or those individuals in the market listing the money that they have received and spent. It is good that they are doing it.
  2. If you don’t like the traditional practice, use your smart phones. Download a mobile application intended for money monitoring. In this way, you can just tap your mobile phones to see how your money is flying.
  3. Don’t deny that you are on a tight budget or saving up for the rainy season. Looking at your bank account and seeing how much money left are ideal rather than disregarding it. You will end up being broke because of poor management.

4. COM (Care of Daddy, Care of Mommy) — Relying much financial support from parents

Filipinos have a family-oriented culture and close family ties.  Your parents have the obligation to take good care of you and to provide you with all your needs. However, that doesn’t mean that they have to shower you everything throughout your life. There will be a time when you need to move and provide for yourself.

There are some who even brag the things they have, such as cellphones, gadgets, expensive bags, lavish lifestyle, and even car, and tell that these things come from their hard work even though they don’t have a job. However, the truth is, these things come from their parents’ blood and sweat. This problem can lead to dependency on parents.

If all else fails, then it will be very hard to work yourself out to be financially independent.

You need to do the following to overcome this poor money management habit:

  1. Go get a job! Doing so won’t make you less of a person even if you come from a wealthy family. Earning money by yourself can make a huge difference. On the contrary, if you know that your parents are not that wealthy and you can see that they need help financially, then get a job. You have no choice. Don’t pretend that you are provided with everything. Don’t rely much on them.
  2. Check reality. Your parents are not getting any younger. They also get tired, and they have been working hard to provide your needs and wants since you were young. Now is the time to give them a break, and let them live a life with no pressure of providing you with your needs and wants.

5. Having Poor Financial Literacy

The majority of Filipinos right now are well educated in the academic system, but not all are financially literate and well educated on handling finances. As quoted by Ernie Baron, “pag walang knowledge, walang power” (no knowledge, no power).

When I was young, I can’t understand it. However, the phrase has started to make sense as I grow old. Ignorance does not excuse anyone.

Do you know the reason why there are many young and wealthy people nowadays? The reason is information.

These young individuals took the advantage of being financially literate.

You need to do the following t overcome this poor money management habit:

  1. Be open minded. The world changes, and the way people think today changes. Change is the only constant thing in the world, so you go ride with it. Being open minded allows you to see the other side of the coin and to see the horizons of opportunities.
  2. Read books about being financially literate. There a lot of books out there, but I won’t mention them here because you need to do your own assignment if you are really serious of overcoming this habit.
  3. Act on it. You must not only read these books and be simply filled with information about being financially literate but also act on it. The more you educate yourself, the bigger the chances to overcome this poor habit become.

Your Turn: Achieve Financial Stability

Despite all the tips that I shared here, the final decision comes from you. Your financial destination is determined by the kind of attitude that you nurture. Achieving financial stability is not a quick scheme or an overnight activity. It is a long process that you need to endure.

The advice may become useless, unless you take an action. You may not have all the poor habits mentioned, but you certainly have one of these. Changing it can create a great effect in your financial life.

My experiences in life and all the challenges that I endured has taught me that life becomes better if I improve my perception about money. By doing the same, a lot should still be improved, but at least you have done something. I still have a lot to share, but for now, I share with you these important mind- and heart-opening tips.

I hope that we can overcome the aforementioned poor habits by starting with ourselves. Share these tips and pay it forward, you may help enlighten someone’s financial life.

Featured Image by Roel Manarang.