While Filipinos are known for their rich traditions and vibrant cultural beliefs, some financial superstitions can stand in the way of achieving true financial freedom. This Independence Day, it’s time to break free from outdated practices and embrace practical money management techniques. Instead of relying on lucky charms or avoiding harmless chores at night, Filipinos can take charge of their finances and build a secure future through responsible financial planning and smart money management strategies.
From Superstition to Smart Budgeting
Many Filipinos hold onto financial superstitions, such as keeping money trees in their homes or avoiding sweeping floors at night for fear of sweeping away good luck. While these traditions are passed down through generations and hold cultural significance, financial responsibility requires a more grounded approach. Building wealth is a long-term game, and relying on chance or folklore is simply not sustainable. Instead, Filipinos can achieve financial security by focusing on practical strategies like creating a budget, tracking their expenses, and saving consistently towards their goals.
Zero-in on Your Finances
The cornerstone of financial freedom is managing your current income. Popular methods include the 50/30/20 budget, a well-known strategy that allocates your income into three categories: essential expenses, wants, and savings. Here’s how it works: 50% of your income goes towards essential expenses such as rent, utilities, groceries, and transportation. This category covers the basic necessities you need to live comfortably. Thirty percent is allocated for wants, which include discretionary spending on entertainment, dining out, hobbies, or personal care. This portion of the budget allows you to enjoy life’s little pleasures. The remaining 20% is the most crucial part — your savings. This is the money you set aside for financial goals such as building an emergency fund, saving for a down payment on a house, or investing for your retirement.
For stricter control over your finances, consider the zero-based budget. This method requires you to account for every single peso you earn. List down all your expected income sources, then plan your expenses for each category, ensuring that your total expenses match your total income. By assigning every peso a purpose, you eliminate wasteful spending and become more mindful of your financial choices.
Track Your Every Peso
Having real-time visibility into your finances is crucial for informed budgeting and responsible spending. Banking apps like RCBC Pulz offer a user-friendly platform to monitor your account balance and track your transactions categorized by expense type. This allows you to identify areas where you might be overspending and make adjustments to your budget accordingly. Regularly checking your app keeps you informed about your financial health and helps you stay on top of your financial goals. Additionally, many banking apps provide features like bill reminders and automatic payments, streamlining the financial management process and reducing the risk of missed payments and late fees.
Cash vs. Credit: Find Your Balance
Cash is king for everyday purchases. It allows you to stick to your budget by limiting your spending to the amount of physical cash you have on hand. Using cash makes you more mindful of every peso you spend, as you can see the money leaving your wallet. This can be a powerful tool for curbing impulsive purchases.
Credit cards, on the other hand, offer a variety of benefits when used responsibly. They can be a convenient and secure way to pay for bills and larger purchases. In addition, many credit cards reward you for using them, offering cash back, points, or miles that you can redeem for travel, merchandise, or statement credits. Some credit cards also offer extended warranties or purchase protection on your purchases, adding an extra layer of security.
To leverage the advantages of both cash and credit cards, consider using a combination of both in your daily financial routine. Use cash for everyday purchases like groceries or transportation, where the temptation to overspend is higher. For larger purchases or recurring bills, credit cards can be a good option, especially if you can take advantage of rewards programs and pay your balance in full each month to avoid incurring interest charges.
Embrace “Loud Budgeting”
A trending TikTok tactic gaining traction is “loud budgeting.” Be upfront about your financial limitations. Instead of succumbing to peer pressure, say, “I can’t afford it tonight,” or “I can only spend PHP1,000.” This technique promotes honesty and financial responsibility.
RCBC Pulz: Your Financial Freedom Partner
Achieving financial freedom requires a reliable partner. RCBC Pulz empowers you with convenient features and tools to manage your finances efficiently. Open an account through the RCBC Pulz app and take control of your financial future. Visit https://www.rcbc.com/online-banking for more information.