As discussed in a previous post, savings are crucial because they allow you to build a financial cushion for emergencies, such as job loss or unexpected expenses. In addition, saving can help you achieve your long-term financial goals, such as buying a house, starting a business, or retiring comfortably.
That said, many Filipinos struggle with saving money. Some common reasons for this include a lack of financial literacy, low income, and cultural attitudes toward money.
Hmmm… ano ulit? Himay-himayin natin yang paragraph na yan. Namnamin natin.
Lack of financial literacy
By textbook definition, financial literacy refers to the knowledge and skills needed to make informed decisions about managing money and investments. It includes understanding topics such as budgeting, saving, debt management, investing, and financial planning.
The question is, do most of us have this? Many Filipinos do not have access to formal education about personal finance, which makes it challenging to navigate financial decisions.
So ang kadalasang nangyayari, wala. Walang financial planning ang karamihan.
Low income
Kung kakarampot ang sahod, paano ako mag-iipon or mag-iinvest? May point naman.
Cultural attitudes toward saving and money
In the Philippines, we have several cultural attitudes toward money that can impact our willingness to save.
Pinakacommon is the emphasis on family and community over individual financial success. In this context, some Filipinos may feel obligated to support their family and community financially, which can make it difficult to prioritize their own financial goals. May mga breadwinners kung saan sila magpapaaral sa mga kapatid nila wherein wala silang naiiwan para sa sarili nila.
Another cultural attitude is the tendency to live in the moment and enjoy life in the present. In short: YOLO! Hayun, walang ipon.
We also have this notion wherein we tend to say “kakain lang ng banko yung pera mo.” So instead of putting in the bank, wala na, ipapang-samgyup na lang.
How do we overcome these barriers?
Start small
Saving even small amounts of money regularly can add up over time.
When I started in 2017, I did a variation of the “Ipon Challenge” wherein I save 25 pesos increments for each salary cut-off. So 25 sa Jan 15, then naging 50 sa Jan 30, tapos 75 sa sumunod and so on. That amounted to a total savings of 10350 by the end of the year. The reason why I opted for this at that time was that it makes saving money easy, fun, and challenging at the same time.
However, in the following year, I attempted to double it but failed. Kasi di pa pala kaya ng income ko. Pagdating ng August, mabigat na sa bulsa yung amount na itatabi mo. So it’s important that when you do these types of challenges, make sure that it’s achievable as well.
Set specific goals
Determine what you are saving for, and visualize the benefits of achieving those goals.
At that time, I was already planning to buy stocks already. So every time na may enough amount, ibibili ko ng stocks.
Creating a budget and tracking expenses
This helps you understand where your money is going and where you can cut back.
Admittedly, it was just last year that I have a sheet for my budget and expenses. Dati, pakiramdaman na lang or internal computation lang ang ginagawa ko. And I’m telling you, it’s better to have a notepad or a sheet and itemize your budget.
Educate yourself
The first step to improving financial literacy is to educate yourself. This can involve reading personal finance books, attending workshops or webinars, or taking online courses.
You can also stick around and keep reading my blog. Perhaps my personal finance journey can be an example for you. *Naks nagpromote!
Conclusion
Saving money isn’t easy, but it is a critical step toward achieving financial stability and long-term goals. But once we understand and address these cultural attitudes and financial literacy barriers that can make saving challenging, we can take control of their finances and build a strong financial foundation.
In the next blog post, we’ll soon start on topics about investments/investing but I’ll probably do a 2-3 part introduction first.