I have been working for over ten years now. By this time, I should already be maintaining a healthy savings account. At least, that was my expectations when I started planning on what to do with my life after college. But realities start to sink in when five years after landing my first job, I still had no savings. And worse, I was in debt!
Sadly, that was the only time that I started to practice saving money. However, I failed in all my attempts that until now, I still do not own that healthy bank account that I was expecting to have.
As I am teaching myself to save money now, I came to realize and understand the many factors that contributed to my poor financial habits. Most of these are rooted from the kind of financial upbringing that I was raised to, plus my unwillingness to take responsibility and take adulting a lot more seriously.
And while I’m on this journey of educating myself on how to be financially free, I am having all these light bulb moments, and I can’t help but look around and realize that I am not alone! According to the Bangko Sentral ng Pilipinas (BSP)’s latest Consumer Finance Survey released in January 2017, almost half of the entire country’s deposit accounts have a balance of P5,000 or less:
This data shows that a lot of Filipinos are actually paying for service charges since most banks have a minimum maintaining balance of P3,000! Consider yourself lucky if your bank account has an average daily balance of more then P5,001.
And can you believe that only 14% of Filipino households have deposit accounts?!
So why is it so hard for an average Filipino to save money? I guess we cannot simply attribute this to poverty. A lot of it has something to do with our spending and budgeting behaviors.
Here are some of the reasons why we find it so difficult to save money. In all honesty, I was able to come up with this list because I was once guilty of all these “crimes”!
Loan Mentality
As a kid, I would hear my mom say“wala na aka sinasahod, nai-utang na lahat”. I was probably too young to understand these words back then, but it instilled in me the thought that being in debt is normal. My sister, who was also still in grade school at that time, would joke about things like “wala pa man yung sweldo ay nagastos na”.
In short, we were exposed to this loan mentality that we also ended up being in debt when it was our turn to make money. We know it was a problem, but we see it as a normal and common problem because everyone we know has this same problem. So we thought it’s fine.
Nope, it’s not fine.
It’s very hard to let go of the loan mentality that I could only wish I was raised with a “saving” mentality instead. All my adult life, I considered taking a loan as the only way to afford things that I wanted or needed. Before I knew it, I was already in huge debt and living from paycheck to paycheck.
How can you adapt a saving mentality?
I say, start small. For the past ten years, my attempts at saving were never successful because I always wanted to start big. I would follow the different money rules and the ideal ratio of spending versus saving. But because I was not wired to save, it never worked for me. Starting with a big amount then forcing myself to be frugal and stick within a budget until the next payday, is too much for someone who didn’t grow up doing it.
Treat it like you are getting rid of an addiction, start small and slow. You will need to condition your mind about saving first until it becomes a habit. It took me years to practice this. So start with an amount that you can forget and not end up withdrawing from your bank account later on. It doesn’t matter if you are only savings P100 at first, keep on doing it until it becomes normal. When that happens, you can then start adding more. Again, do not attempt an abrupt change by jumping from say P100 to P1000. Doing so might trigger your brain to remind you of your old bad habits. You do not want to go back there anymore.
Consumer Mentality
One time, when I was a kid, my father gave me some new five peso coins. He asked me to keep them, they are new, he said. I didn’t understand what he meant by “keeping” them. I went to our neighbor’s sari-sari store and spent those 5 peso coins. I saw his disappointment when a few days later, I told him that I already spent them all.
See? I didn’t know that he actually wanted me to save the coins. Because along with the loan mentality, I was also raised with a consumer mentality.
Malls are huge in the Philippines because people flock to them. It has become an extension of our living and dining rooms. Sunday is a family day, which translates to hearing mass then spend the rest of the weekend in a mall. Malls are where we spend our hard earned money. Why? Simple – for most of us, we work and earn money so we have something to spend. Consumer mentality.
It’s alright to spend. Because, why not? But along with spending, make sure that you are also saving. Another saving challenge: go ahead and buy that shoes. But remember to save the same amount that you spent on that shoes. Because if you can withdraw P4,000 for a pair of shoes, why not save P4,000 for your future?
We Love to Celebrate
Fiesta culture. We love festivities, we love to celebrate. And when we celebrate, we spend! There’s nothing wrong about celebrating. But when you have to borrow money just to spend for a celebration, maybe it’s time to reconsider?
We Splurge on Payday
Just today, my co-worker sent an email invite to everyone for a lunch out on the next payday. It’s a familiar scenario of how employees “enjoy” the fruits of their labor. We go to Starbucks, or we set aside at least a P500 budget for lunch or dinner with co-workers, and not to mention the drinking sessions over the weekend.
And we would intend to shop because it’s payday sale!
All these to make pancit-canton and 3-in-1 coffee our diet for a week before the next payout.
Again, no one is forbidden to spend, for as long as you pay yourself first – by saving first!
Facebook Culture
We love to share. We do not only love to share our “blessings”, but we share a lot about our lives too. We make sure that our neighbors will know of the new appliance that we just bought, new gadgets, new clothes. When social media took over our lives, we fill our timelines with beautiful life events for the whole world to see.
Sometimes, we feel obliged to post photos of all of our happy moments, because why not? But a lot of us are taking it too far – buying things they do not need just to keep their Facebook timeline looking impressive and expensive.
We Take Pride on our Resilience
We proudly declare to the world that Filipinos are very resilient. That we can survive every challenge that come our way. And that because we are used to dealing with life’s difficulties, we are expected to make it through the toughest of situations.
Unfortunately, this has affected the way we look at our future. We would postpone saving money because we believe that we can always find ways to handle things in times of financial crisis. Worse, we do not see the importance of saving at all because, well, we are resilient.
We Believe in Luck
I myself always thought that winning the lottery is my only way out of poverty. I would buy a lottery ticket and pray that I will win!
We believe in luck. We believe that someday, the Almighty will send us blessings in the form of miracles, like manna and moolah falling from the skies.
Oprah Winfrey has a very good definition of luck – “luck is preparation meeting opportunity”. I think this is very true. If you want to be blessed, you have to prepare yourself for that blessing. You have to be able to handle it, otherwise, you will end up failing. If you want a high-paying job, you have to prepare for that job by earning the necessary expertise and skills, so that when the opportunity comes, you are ready. That is true luck!
Despite all these, I think a new generation of Pinoy “savers” is starting to emerge. This is evident in the huge following that financial and business Facebook pages are getting. The Peso Sense Facebook page for example already has almost three million followers (as of this writing). You know these are not fake likers because of the very active page engagement – lots of discussions about money, paying off debts, and followers who are actually sharing their own experiences and tips on how to save.
Other finance and business-focused pages like MoneyMax.ph and Entrepreneur Philippines have large social media following too. All these are good signs of what to come, and again makes me feel that I am not alone! I am so glad that many of us have found financial enlightenment, let’s keep sharing and spreading the good news.