Are you guilty of being a ‘one day millionaire’? Do you have money to start the year right and manage your finances responsibly?
According to Bangko Sentral ng Pilipinas, Filipinos receive large amount each year from OFW padala. But why do most Filipinos still feel as if money is scarce?
It’s about time to change old habits and end the cycle of mismanaged finances. We’ve listed down five helpful tips to be more financially responsible this year:
As OFWs send money hassle-free anytime and anywhere in the world with MoneyGram’s global network of approximately 350,000 locations in 200 countries and territories worldwide, relatives back home must learn to allocate the padala accordingly.
Know where your money is going. The classic formula of Income – Savings = Expenses would come in handy. Decide how much you’d like to save before listing down all your expenses. It’s best to write it down on a spreadsheet or use the envelope method to ensure you don’t dip your hands into money allotted for other categories.
- Credit Cards: On Interests and Debts
Credit cards should be used for convenience, not to make ends meet. They are actually handy as they eliminate cash transactions and offer great rewards, however, just be sure that you can pay the bill in full, otherwise, it will incur interests and cause you to get into debt. If you can’t pay for it in full, it means you are living beyond your means.
- Necessity or Luxury
When purchasing something, always ask yourself — is it a necessity or a luxury? For example, you might need a place to live, but you don’t need a mansion unless you can pay for it in cash. Or purchasing a phone in a financially responsible manner means being able to pay for it in cash. Consider purchasing a refurbished phone for a cheaper upgrade. If you’re having difficulty paying for these financial guidelines, but would still like to buy the more expensive one, ask yourself “why?”. If the reason is because everyone has it, do keep in mind that your neighbors are not the one paying for your bills, so they should not dictate your choices nor your standard of living.
- Pay Yourself First
Spending every centavo of your paycheck is not being financially responsible. A good principle is to pay yourself 10% in savings before you pay your bills. You can also opt to invest in stock market to get higher returns. This will involve risks so make a calculated one at that and have a plan. Banks generally offer a wide range of products for you to choose from. Try asking if your employer has a sponsored savings plan available. Most plans match your contribution up to a certain percentage, so by contributing at least enough to get the match, you’ll earn a guaranteed return on investment (ROI).
- Emergency Fund
Being financially responsible means being prepared for the unexpected. Most experts agree that you need to be able to support yourself at least 6 months without an income. If you are living with dual incomes, make sure you can pay for bills and utilities on one income or even neither income! If a missed paycheck will ruin you financially, it is high time to create a plan to prevent this.
Ultimately, being financially responsible is living within your means and doing what you have to do to take care of your needs and the needs of your family. So evaluate your earning and spending habits and make the necessary adjustments to put yourself on a responsible footing.