12 Bad Money Habits Filipinos Need To Quit
Ningas kugon, Mañana habit, Filipino time. Are these Pinoy bad habits familiar to you?
These habits are common among us Filipinos. And these “ugaling Pinoy” often holds us back in our school, work, relationships and even financially. Sadly, the bad traits Pinoys have hindered most of us to become financially free. Are you guilty of any of these habits? Now is the best time to be more aware and get rid of them and replace it with better and smarter money habits. Here are twelve bad money habits of Filipinos that we need to eliminate.
At 20 years old: “Magiipon at mag-iinvest ako! Pero, saka na lang pag may trabaho na ako…” (I will save and invest. But I will do it when I already have a job)
At 25 years old: “May trabaho na ako at kumikita na ng sariling pera. Pero, saka na lang ako mag-iinvest…bata pa naman ako, eh” (I already have a job and earning some money. But I will invest later because I am still young)
At 35 years old: “May pamilya na ako at mga anak na pinagaaral…paano pa ako mag-iinvest? Saka na lang siguro ako mag-invest pag nakaluwag-luwag na.” (I already have my own family and supporting my kids to school…how will I invest? I think I will just invest soon when I have some extra money)
At 60 years old: “Matanda na ako at may sakit na. Sana noon pa ako naginvest…” (I am already old and ailing. How I wish I have invested my money when I was young)
Does the story look familiar to you? Sadly, this is a common story among us Filipinos.
Many Filipinos have this common trait of putting off things for tomorrow even if one can do it today. This trait is often referred to as the mañana habit. Mañana is a Spanish term which means “tomorrow”. The term sounds like “mamaya na” which means “later” and this phrase is often used by Filipinos to refer to the habit of procrastination.
Sadly, many Filipinos forego investing or getting an insurance thinking that they can start later when they are more financially stable. When they have finally decided to do it, it’s already late — either the premiums are too high or they are sick and need the money badly. In addition, many Filipinos also put off saving for their retirement with the mindset of spending their money on their children so their children will return the favor. This burden has been passed off from generation to generation until it becomes a vicious cycle.
The sad truth is, this happens because most of the Filipinos lack discipline. To overcome this bad habit, we need to discipline ourselves and work ourselves out of this bad habit. So, instead of putting off the things you can do today for tomorrow, have the discipline to do what you have to do today instead. Starting early is the best step to do in terms of accumulating wealth.
Bahala na si Batman
This phrase is often getting thrown around by people who don’t have any plans at all. Sadly, many Filipinos don’t know how to plan for their future. Instead, they often entrust their future to a fictional character called Batman — thinking that Batman will come to their aid when a need arises. Folks, this only happens in reel life and not in real life.
So when a family member gets sick, they got no emergency fund to use for hospitalization of their loved one. They have no PhilHealth, health insurance or even money to cover the hospital expenses. The worst case scenario is, they will borrow money that yields high interest, which makes it nearly impossible for them to pay it off. Now, who do you call to? Batman?
To eliminate this bad habit, we must learn how to save for the future. Remember, not all days are sunny and rainy days will eventually come, you just don’t know when will the storm hit you. So while the bad days are not yet around, spend your time preparing for it. Be like ants — storing food during the summer.
Children as a retirement fund
The Filipino culture dictates that it is the responsibility of the children to help their parents, especially during their retirement years. Many Filipino parents entrust that their children will help them with their living costs or the children will help to finance the education of their younger siblings. While there is nothing wrong with helping, many parents forgot the fact that their children also have their own living cost to pay and future families to support and take care of. Adding one dependent for children to support will cause a financial strain to them and it will be harder for them to achieve financial freedom.
To avoid this, start preparing for your retirement as early as your 20s so you will become financially free during your retirement years. Retirement should always be a part of your financial planning. Moreover, you should invest in a health care insurance so you will have something to use when the need arises.
Libre and Pakikisama
One of the traits Filipinos are known for is hospitality. It is a part of Filipino culture to always treat our guests warmly and it is very evident during celebrations — birthdays, fiestas, promotions, anniversaries, christenings. While it is not bad to spend on these celebrations from time to time, this can go wrong when you have to spend beyond your means and borrow money to spend on these celebrations. Sadly, some of the Filipinos do this for the sake of showing off or impressing their friends or family. Harsh truth, isn’t it?
Sometimes, you need to assess if your budget can accommodate lavish celebrations or not. If you cannot afford to have extravagant events, then resort to simple celebrations instead. The significance of the moment won’t diminish if you resort to a simple celebration. Also, if you are planning to throw a party, then it would help to set aside a budget beforehand so the celebration won’t put a strain on your budget. The point is, spend only what you can afford. Now, if you cannot really afford to treat your families and friends, then be honest with them and let them know that your financial situation cannot accommodate it. It’s never required to treat our families and friends during special occasions so they should understand your situation.
Spending lavishly on pasalubong
This trait is commonly seen on Overseas Filipino Workers (OFW). Some OFWs tend to spend extravagant amounts of pasalubong for their families whenever they come home. For them, it is their way of making it up to their families for their months or years of absence. However, families and friends of OFWs should realize that it is not their obligation to bring home pasalubong to you or treat the whole town whenever they’re back home. Remember, they sacrificed and took a risk working abroad to earn more so they could provide a comfortable life for their families and not sustain the wants of their families. So instead of splurging on pasalubong, save that money instead for the families’ future. Also, the best pasalubong that you can give to your family is your mere presence and the limited time that you will spend together, that alone is more than enough. Never mind those people who think that you are “madamot” or “kuripot” because your family is your utmost priority.
Puwede na yan
Some people have the tendency to live within their comfort zone and say things like “Puwede na yan”, “Eto lang ang kaya ko eh.”, “Okay na yan” when assessing their performance or status. They are hesitant to challenge themselves for the better and tend to settle to the status quo.
The question is, why settle for okay if you can have the best option? Why should you be satisfied with saving your money in the bank when you can actually aim higher by investing it?
One of the reasons why people are poor is because they have a poor mindset. For example, they think that they cannot invest their money because it is just for rich people. The truth is, investment is for everyone that wants to become financially secure someday. So, if you want to accumulate wealth someday, challenge the status quo and shake things up.
#YOLO (You only live once)
One of the reasons why a lot of Filipinos are living paycheck to paycheck or isang kahig, isang tuka is because they are already spending the income that they have yet to receive. They go to a party every weekend, do impulsive shopping, spending lavishly on travel, buy things they do not really need for short-term pleasure — believing that it’s okay because their salary is coming in a few days anyway. This bad habit of Filipinos has blinded many people to enjoy the “now” and not seeing the suffering or the long-term effect in the future. As what Chinkee Tan said, enjoy now, suffer later. Now, if you want to get out of the rat race of living paycheck to paycheck, then you must learn how to budget your money, save and live within your means.
“Uy, may bagong TV si kumare. 55″, UHD, smart TV! Dapat meron din tayo! Mangungutang muna ako sa credit card para makabili din tayo!”
Is the scenario above familiar to you? Sadly, this is how some of our kababayans live — they live full of envy. Many Filipinos are guilty of this financial sin by buying the things their neighbor has or spending things that are on trend or nauuso even if it’s beyond their financial capacity. The tendency is, these people enveloped in their envy will end up deep in debt. Don’t be a social climber.
Turn your backs away from this bad habit by assessing what you really need and learn to live within your means. If you cannot pay it in cash then it means that you cannot afford it. Avoid being buried in debt just because you want to impress your peers. Remember, true friends will not judge you nor take it against you if you are not financially capable as them. They will accept you as who you are and that includes your financial capacity.
Investing in things that depreciate in value
The sad reality is, many Filipinos are prioritizing on buying things that depreciate in value rather than the things that appreciate in value. What are those things that depreciate in value over time? These are cars, mobile phones, laptops, etc. Many people mistakenly identify these things as “investments” or “assets” when in reality, these can turn out to be a liability. Let’s take car as an example. People think that a car is an asset but it is actually a liability because you have to pay for the car’s insurance, maintenance, gasoline, yearly registration, etc. Also, brand new cars lose half of their value as soon as you drive them off the lot. Sure it can be sold but its value depreciates over time.
Unfortunately, most Filipinos tend to keep silent rather than to ask questions because of fear of being ridiculed. As a result, we tend to keep safe and keep things to ourselves. But, in playing safe, we miss out on the opportunity to learn and grow.
We should realize that it is okay to look stupid at first but be smart later on. As what the Chinese proverb says: “He who asks a question is a fool for five minutes; he who does not ask a question remains a fool forever.” It is never wrong to be humble and ask the things you do not know. So if you want to make wise money decisions, the best step to take is to find someone that can give you sound and practical advice.
I’m poor at Math
“Mahina ako sa Math” is a popular sentiment among Filipinos. It is a popular belief that you need to be good in Math to create a good budget and you need to have a deep sense of understanding of Economics in order for you to successfully invest. The truth is, it only takes a simple arithmetic and basic knowledge about money to make a sound financial strategy. Try to exert a little effort to understand your financial situation and start from there.
Investing in get-rich-quick schemes
Filipinos always want the easy way out. Many Filipinos want to shortcut their way into wealth that’s why they resort to lottery, bingo, betting, gambling and worst, investment scams, in order for them to get out of poverty. That’s why it’s not surprising that many Filipinos are being duped into investment scams because of the “instant mentality” of getting rich in a short period of time. Some Filipinos invest their money in suspicious MLM (Multi-level Marketing) that promises guaranteed, risk-free and high-yielding investments even if they don’t have enough knowledge or understanding of them. Plus, the schemes are framed in a simple manner that entices people to join — through referrals or when they invite their friends, family members to join. (READ: What is an Investment Scam and How To Avoid Them (Part 1), What is an Investment Scam and How To Avoid Them (Part 2))
In order for you to avoid being deceived by these investment scams around the country, you must do your research on the company and check with government agencies like SEC (Securities and Exchange Commission) if the company has been reported as illegal or if the company is authorized to solicit investments from the people.
In general, Filipinos still have a lot of positive traits that we can be proud of. Filipinos are hardworking, optimistic, resourceful and resilient. Let’s begin eliminating the bad traits that we have and let’s make use of the positive traits that we have so we can make the best things happened. So if you are guilty of any of the bad traits stated above, start correcting these habits before it’s too late.
What are the bad money habits that are making you broke? Is there anything that you would like to add to the list? Share it with us in the comments section. 🙂