“You can never make the same mistake twice because the second time you make it, it’s not a mistake, it’s a choice.”― Steven Denn
Each time we start a brand new year, making our new year’s resolution has been a part of it. We list down the things we promise to do and not to do. We vow to eat healthy and avoid junk foods, to exercise daily and avoid sedentary lifestyle, to read books and avoid too much screen time, etc. Some will also commit to saving money but oftentimes, forgetting to avoid the same financial mistakes they did in the past. The result: they end the year in the same financial situation they were in at the start of the year.
Sadly, financial literacy is still not a mandatory subject in school. Thus, many Filipinos grow up not knowing how to properly manage their money. The money habits we now have are often handed down from our elders. Some are good, some are bad. It’s our choice whether to adopt them, improve on them or avoid them. But with more Filipinos struggling with their finances, we can safely say that majority still fail to avoid committing the same money mistakes that have been circling in the family.
Many are still living without a budget. If you went through 2024 without a budget, make sure you have one this year. Not having a budget or having a budget but not sticking to it, is the first step to a financial dilemma. It doesn’t matter how much you earn, what’s important is you’re able to properly allocate for your savings, needs and wants. Closely track your expenses so you know where your money is going and where to cut down, when necessary.
Not having have a budget, can lead people to the mistake of living beyond their means. They just spend and overspend without regard to their capacity to pay. A classic example, if you’re using a credit card and not able to pay off in full each month, that’s already a sign that you’re spending more than what you can really afford. Not because your officemate has the latest Iphone model, means you should too, even if you cannot afford it. Living an expensive lifestyle is aspirational but living it beyond your pay grade can be dangerous.
Scenarios like this push people to taking out loans they have difficulty paying. As most loans are interest bearing, most end up owing more than what they initially borrowed, making repayment more challenging. Latest report from BSP showed that as much as 47% of Filipinos borrow money. Sad to say, the number is projected to even increase. Especially nowadays, when taking out loans are easy and almost instant, people need to be more conscious not to fall into the deep debt trap. Looking at the other side of the coin, we have those, who in the kindness of their heart lent money, but were left unrepaid and suffering in silence. Paying off debts is not only an obligation, it’s decency.
Have you ever wondered why despite receiving a pay increase, you still find yourself financially challenged? It’s usually because people make lifestyle inflation the moment they receive a raise. For instance, you have been enjoying the coffee in your cafeteria. But when you got an increase, you now spend on Starbucks or UCC. From using local brands, you now upgrade to imported brands. Instead of putting into savings/investments the additional money, people tend to spend it to up their living conditions, which sometimes, are not necessary.
And because many fail to save for the rainy days in their life, they “burden” the people around them. Am sure you know of adult children who still consider their parents as their “emergency fund”? As they don’t have savings to dip in during crunch time, they always turn to their parents. Forgetting that their parents need to save for themselves, as well. On the other hand, we also know of parents who regard their children as their “retirement fund”. While it’s nice to be taken care of by our children during our old age, it is not their obligation. Especially, when they already have their own family to provide for. Either, we are responsible to fend for ourselves.
Lastly, for those who have extra money to spare, avoid investing on schemes or businesses that you do not fully understand or are too good to be true. We have heard so many sad stories about people getting scammed, yet, because of the desire for easy money, many are still lured and fall victim to these investment predators. Many forget to do research and background check before investing their hard earned money. As one tagline goes, let’s spot the scam to stop the scam.
As we start our 2025, let’s be mindful of our responsibility to avoid committing again the above money mistakes and start working on our healthy money habits. We have no excuse. We can learn about personal finance, DIY version as there are so many materials online you can make as reference. Or you can partner with a trained and professional financial advisor, who are more than willing and capable to guide you in your journey towards financial freedom.
The bottom line is, for 2025, you are empowered to have control over your finances… and it starts now! It’s your choice!
