Being financially savvy means spending, saving, and investing wisely on things that will matter even in the future. But a lot of Filipinos show a lack of commitment when it comes to financial literacy and competence.
According to a survey by rating agency Standard & Poor’s, only one out of four Filipino adults is considered financially literate.
Having the financial security and the financial freedom to make choices contributes to overall financial wellbeing.
Handling finances right is a vital factor in achieving a healthy financial status. Philippine Savings Bank shares these five tips to help individuals, especially young ones, get a grasp of their finances.
Use your credit card wisely. Using your credit card, without considering your personal balance sheet is a bad habit, especially if you don’t pay your credit card bills in full each month. If you cannot control your spending behavior, you’ll end up with an unmanageable debt that might lead to more debts.
Do not let your wants overcome your needs. Buying a fancy dress or eating out in a posh restaurant can be done as a little “pat on the back” for your hard work. But doing it every payday may impede your money-saving strategy and put a dent in your bank account. Prioritize needs versus wants. Live beyond your means; don’t exchange financial security for little indulgences.
Find an additional source of income. For millennials starting off in the workforce, a day job may not be enough to make ends meet. Mounting bills, pitching in at home, starting your savings, and other “adulting” concerns might be hard to handle on a rookie yuppie’s salary. Look for other opportunities such as tutoring high school students, going on part-time sales, or investing in the stock market.
Prepare for a rainy day. Always expect the unexpected: emergency health and housing problems, layoffs, and other setbacks. Make sure to have a cushion of six months’ worth of your living expenses to survive any kind of challenge.
Seek advice. Even smart people admit that they need help at some point, and it’s no different when it comes to financial literacy. Whether you’re having trouble keeping control or looking to add more to your nest egg, it pays to get an expert opinion.
“Financial literacy—whether you are a minimum wage earner, a student, or a veteran executive—is something that we all need to take seriously,” said PSBank senior vice president for marketing group Noel Tuazon. “Our advisors will assist you on budgeting, investing, and setting goals to ensure you are able to make informed decisions and grow your hard-earned money or investments.”