Filipinos are known for being hardworking and capable workers. In fact, many foreign employers like working with Filipinos because of their skills and work ethic. The only problem with some of them is that not everyone can manage their finances.While in many cases, the money problem stems from low wages, the truth is that many of those problems can be avoided.
Common Mistakes of Filipinos When it Comes to Money
So, what are the usual money mistakes that Filipinos keep on making? Here are some of those and how they can be avoided or prevented:
Mistake #1:Not Preparing an Emergency Fund
It is wise to have an emergency fund that can cover several months of your expenses in case something happens. Unfortunately, when you ask around, most people will admit they’re not saving for emergencies. Even if they have money in their savings, it’s nowhere near enough to cover a few months of their expenses. It’s not easy to save enough to equal five months of your expenses, but you need to make some changes. Fortunately, there are nowhelpful money management appsyou can try. Take advantage of these tools.
Mistake #2: Living from Paycheck to Paycheck
This is closely related to the first mistake. Many Filipinos are living off on their paycheck and then hanging on until the next one comes around. This is a major mistake because what would happen if something prevents you from receiving your paycheck? What happens if you lose work or get sick? The best ways to avoid this? Lower your expenses and start saving. Look for more investments or an additional revenue stream.
Mistake #3: Being Too Generous
This is a common problem among Overseas Filipino Workers (OFW). There is a general impression that anyone working overseas has a lot of money, which isn’t true for the most part. While most OFWs may be earning more than what they would be making in the Philippines, they cannot afford to give away money. So, whether you’re working overseas or not, you should be careful about giving loans and handouts to friends and relatives, especially when you know they cannot pay you back.
Mistake #4: Getting Huge Credit Card Debts
Using credit cards is not a problem generally. It only becomes so when users start racking up huge debts and are unable to pay it back. The problem with credit cards is that it’s very easy to overspend when using them. It is quite tempting to use the card all the time. The inability to pay credit card debt can affect one’s credit score because there is already acredit scoring company in the Philippines. The best way to avoid this is not to have a credit card at all. If you decide to use a card, make sure that you pay it in full afterward to avoid the large interests.
Conclusion
Unfortunately, some traditions and customs encourage these ideas. The fact that most Filipinos are fatalistic, for example, is one way to explain why many Filipinos do not have a financial plan or even an emergency fund ready. But it’s time to change all of that.
