Break These 7 Bad Money Habits Before It’s Too Late

Every Filipino dreams of not having to live from paycheck to paycheck. Breaking our backs to pay off credit card debt is demoralizing, and it sucks to call yourself broke – or worse – poor, when you have to stretch all of your money while you crawl into the 15th day of the month. Admittedly, despite being in different financial situations, we all want the same thing – deeper pockets and more money.

Is it really possible? No, but you can switch how your money moves by starting to identify the cash habits that are keeping you broke. It’s better to know what you should change before you get stuck in a financial rut that you can’t get out of.

Procrastinating about your finances

It’s one thing to be lazy; it’s another to procrastinate. Especially so when it comes to your finances. Too many times, you’ll forget about your phone bill or electric bill’s due date because you know “it’s still far away” only to find out that you’re three days overdue. The result is extra dues due to unpaid balances. Or you’re probably paying your child’s tuition fee on an installment basis even if you already have the money to pay it in full. The result? Additional fees that add up when you look at them on a macro level. Guessing or going in blindly with your money situation will cost you money, so you need to quit it soon.

Spending money on things you can’t afford

If you don’t have the cash or the buffer to buy the latest iPhone, then you don’t have any business buying it. If replacing your still-in-perfect-condition Toyota Wigo means monthly payments for the next five-years for a Mini Cooper that does the exact same thing, then it’s probably not the best idea to proceed. It’s so easy to end up in debt when you don’t have the means and still push hard for your “aspirations,” so to speak. And while it’s okay to treat yourself sometimes, you have to be wise and treat yourself – within reason.

Relying on only one income stream

Unlike people many cultures, Filipinos aren’t inherently self-starters. We’re not as enterprising as the Chinese or as resourceful as the Indians. It is perhaps the colonizers’ influence that we developed the thinking that we absolutely have to work for others in order to make a living. Being an employee works perfectly for us today, but what happens when we lose our jobs or when the company we work for fails? The pay would be higher than our current monthly salaries, but it won’t be enough for long. Being reliant on only one source of income can be hard when troubles arise, so it’s best to have something to fall back on, or at least something to run to (other than loans) in such situations. Start a side hustle like freelancing or baking, or invest via a passive income stream like P2P investing.

Falling for get rich quick traps

If you’re already breaking your back working for enough money to cover your needs, then what makes you think that accumulating money or building wealth happens overnight? The problem with Filipinos is that we get impatient, and eventually fall for get-rich-quick schemes, with the promise of big ROI and immediate returns. These actually hurt our pockets more than we realize, and before we know it, the money we worked so hard to grow has already disappeared right before our eyes. Don’t forget to take the long approach when it comes to finances, because any amount of money earned involves education, hard work, and hustle.

Thinking like a consumer

A person who remains broke has a consumer mentality. If you focus on spending money on items like clothes, the latest gadgets, cars, or the latest appliances instead of buying things that appreciate over time like real estate or diversified investments, then you’re thinking like a consumer. You need to stop focusing on things that bring temporary happiness. You need to start thinking for the long term. Break your spending habits and focus on growing your money first so that you won’t have problems buying these things in the future.

Not setting money goals

Another big habit that you need to break is your inability to set realistic money goals. When you get your salary, what do you first do? You probably pay your bills first and then spend some on your needs and other expenses, and then save whatever’s left on a separate bank account. This isn’t exactly the most ideal. You should set goals that will enable you to save up. For instance, you can promise yourself that by Christmas this year, you’ll already have PHP 80,000 in your emergency account. You’ll then be able to build up the money needed to achieve this goal, by say, foregoing your weekly Starbucks or milk tea habit, or reducing your mani-pedi session to once every two months instead of the usual once every three weeks. This will enable you know where you exactly are when it comes to your finances.

Not educating yourself about money

Probably the biggest bad money habit that you can develop is to not develop money habits at all. Not educating yourself about finances is the worst mistake you can make, especially in this day and age when all the information you need is already in front of you, easily digestible in bite-sized chunks on the internet. If you’re going to put up your extra money on a lending scheme, you must understand how investment works and you need to do your homework. If you’re applying for a loan, you need to have a full comprehension of its associated jargon like monthly repayments, interest rates, and loan terms. These are things you’re going to have to deal with as an adult, one way or another, so you have to process them as thoroughly as you can. As a start, you can read books or turn to informative websites that would help you understand basic finance.

Hopefully, breaking these bad habits would be instrumental in pivoting your finances for the better. Let us know if you’re guilty of any of these and tell us what you think in the comments section below.

Blend PH can be your partner in financial inclusion and education, so do check out our other content related to managing your finances.

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