Reaching true financial freedom has its challenges, and with many people struggling with budgeting and spending their money wisely, building a financially stable life may seem like an impossible dream. However, developing healthy financial habits can place you on the path to achieving financial security. Let’s take a look at some habits that financially responsible Filipinos live by so that you can also integrate them into your own life.
1. Lives Within Their Means
Financially responsible people understand the importance of distinguishing between necessities and luxuries, and as such, they’re able to live within their means. This principle is all about ensuring that your expenses don’t exceed your income, thereby avoiding the trap of debt accumulation and the financial stress it brings. Adhering to this habit can help you maintain a balanced financial life without relying on credit to sustain your lifestyle. It also encourages you to allocate your funds toward essential living costs, savings, and investments rather than wasting them on momentary pleasures.
Adopting this disciplined approach can be challenging because it requires you to unlearn the poor spending habits that you might have been practicing for years. Fortunately, there are several things you can do to make the unlearning process a little easier. One thing you can do is to start tracking all of your expenses to understand where your money is going. This way, you’ll get a bigger picture of your spending habits and start setting limits on your discretionary spending. Another is creating a budget and sticking to it whenever you shop for groceries and other necessities. This can help you develop a frugal mindset, which can significantly contribute to living within your means.
2. Leverages the Right Digital Banking Platforms and Solutions
In today’s digital age, leveraging digital banking solutions can help enhance your financial management capabilities. These solutions offer convenience, accessibility, and real-time insights into your financial health, allowing you to make more informed financial decisions and maintain better control over your money. When looking for a financial institution in the Philippines, it’s essential to select a digital bank whose products and services are not only easy to use but also possess the tools and features that can help you become a more financially responsible individual.
For instance, Maya, the number 1 digital bank in the Philippines, has several products that can help you grow your wealth. Time Deposit Plus, for example, is perfect for those looking for a time deposit option that can be easily tailored to their needs.
If you’re already familiar with time deposit products, you may have put off taking advantage of them because of the relatively low interest rates of other options in the market. Time Deposit Plus by Maya, however, boasts a 3.5% p.a. base interest rate, which is higher than what most traditional banking institutions and e-wallets offer. This interest rate can even be boosted by up to 6% p.a. when you reach your target amount and date.
If you’re new to time deposit products, you should also know that Time Deposit Plus is “buildable,” which means that it lets you deposit any amount anytime until you hit your target amount and date. Thanks to this, you can save and grow your wealth at your own pace, unlike with other time deposit options that require you to deposit the full amount from day one. Time Deposit Plus also lets you decide how long to save money. You can keep your time deposit account for 3 months, 6 months, or 12 months, allowing you to choose a term that feels the most comfortable. With Time Deposit Plus, flexibility is the name of the game.
Finally, depositing to your Time Deposit Plus account is easy, as you can directly deposit from your Maya Wallet for free. With the high interest rates and ease of use of Time Deposit Plus, it’s no surprise that many long-time banking customers find this banking solution appealing, making it one of their most important tools for growing their money.
3. Prioritizes Their Savings and Investments Over Non-Essential Purchases
Prioritizing savings over non-essential purchases is key to becoming a financially responsible individual. It involves allocating a portion of your income towards your savings before considering discretionary
spending. By making savings a priority, you’re encouraged to practice mindful spending, where you weigh the value of purchases against your long-term financial goals. You also get to build a financial cushion for yourself and gain peace of mind knowing that you have some money saved for future expenses
To ensure that you’re effectively and consistently setting aside a portion of your income to your savings, consider automating your contributions or committing to regularly depositing to your savings. With Maya, depositing to your savings accounts is easy. You can do everything in the app with just a few taps and the money is deposited to your savings instantly. You can transfer from your Maya Wallet to your savings accounts for free or deposit from other banks and e-wallets via PESONet and InstaPay (fee depends on the source bank. All PESONet transactions are subject to a cutoff period). Thanks to this convenience, you can avoid the temptation of spending your savings, as well as take forgetfulness out of the equation.
Aside from saving money in your Maya Savings and Time Deposit Plus accounts, you can also consider other high-interest-rate banking and investment products. For example, you can consider investment vehicles like stocks, bonds, and funds like mutual funds and unit investment trust funds. In this regard, Maya also offers the easiest ways to get started on your investment journey. Maya Stocks, for example, allows you to cash in to your stock broker account in real time to trade top stocks in the Philippine Stock Exchange. Choose between 2TradeAisa or Philstocks and start trading straight from the Maya app.
Maya Funds, on the other hand, lets you become an instant investor for as low as PHP 50. You get to choose from 13 local and global funds, that are managed by ATRAM and BPI Investments, Inc. so you’re sure that your investments are maximized.
4. Plans Ahead for the Unexpected
Planning ahead for the unexpected can financially prepare you for unforeseen events, such as job loss, medical emergencies, or major home repairs due to flooding. It ensures that you have the means to cover their costs without having to rely on credit cards or loans. Developing this habit also enables you to navigate financial setbacks with resilience, giving you the confidence to maintain progress toward your long-term financial goals.
With this in mind, prioritize building an emergency fund that’s equivalent to three to six months’ worth of your living expenses. While the size of the emergency fund may vary based on individual circumstances, many financial experts recommend this amount. You can start by making small contributions each month. However, as your comfort grows, it’s ideal to gradually increase the amount to grow your emergency fund further. If you want to set up several funds to cover multiple emergencies, consider using online banking tools like Maya Personal Goals. This product allows you to create and manage up to 5 goal accounts in your Savings dashboard at a time, and each one earns 4% interest p.a. monthly. Goals can be set up to 180 days, but you can continue for another 180 days should you choose.
5. Focuses on Eliminating and Avoiding Debt
Debt, particularly high-interest consumer debt like credit card balances, can significantly hinder your financial progress and strain your budget with interest payments. That’s why it’s essential to prioritize paying off your existing debts systematically to minimize interest costs over time. You can use strategies, such as the debt snowball method, which involves paying off the smallest of all your loans as quickly as possible, or the debt avalanche method, which is the process of paying your most expensive loans to reduce your debt. If you follow these strategies consistently, you’ll eventually eliminate your debt, allowing you to allocate a larger portion of your income to your savings, investments, and financial goals. Successfully eliminating your debts can also encourage you to avoid accumulating new debts, which will greatly improve your financial health.
Cultivating habits of financial responsibility is not just about managing money; it's also about securing a stable and fulfilling future. By committing to the habits financially responsible individuals follow, you can strengthen your financial well-being and achieve true financial freedom.
