Many Filipinos find it challenging to save their money and grow their wealth. Factors such as impulsive spending habits, high levels of debt, and the absence of clear savings goals can prevent them from reaching their true financial potential. To overcome these obstacles, they need to develop financial discipline. This way, they can build healthy habits that can help them manage their financial resources effectively and accumulate wealth in the long run. To that end, here are some tips that can help you achieve financial discipline.
Create a Realistic Budget
Creating and maintaining a realistic budget offers several benefits, with providing you with a clear overview of your financial situation being the most notable. This strategy allows you to see where your money is going, giving you opportunities to adopt measures that can help you avoid overspending and accumulating debt.
Start by listing all your sources of income, including your salary, side businesses, and any other sources of revenue. Next, detail all your monthly expenses, such as rent or mortgage, utility payments, grocery expenses, transportation expenses, and other recurring costs. It's crucial to be honest and thorough when listing your expenses, as overlooking small, regular expenditures can skew your budget.
Afterward, categorize your spending into needs and wants. Needs are essential expenses like housing, food, and utilities. Wants, on the other hand, are non-essential items like dining out and entertainment. This distinction can help you identify areas where you can cut back if necessary. With a well-structured budget, you can prioritize your spending, ensuring that your essential needs are met before you indulge in discretionary expenses.
Take Advantage of High-Interest Banking Products
Maximizing the returns on your savings is a smart financial move, and one effective way to do this is by taking advantage of high-interest banking products. With inflation constantly eroding the value of money, earning a higher interest rate helps to counteract this effect and preserve the purchasing power of your savings. However, relying on traditional savings accounts can limit the growth of your savings since they typically offer minimal interest rates. That being said, consider exploring other savings alternatives, like those offered by forward-thinking online digital banks
As the best digital bank in the Philippines, Maya offers several products that can greatly boost your savings. Maya Savings, for instance, boasts a base interest rate of 3.5% p.a., which is higher than what most traditional banks offer. There is also the Personal Goals savings solution, which earns you a guaranteed 4% interest p.a. monthly. Finally, Time Deposit Plus starts with a base interest rate of 3.5% p.a., which can be boosted up to 5.75% p.a. when you hit your target amount. Each one of these products is regulated by Bangko Sentral ng Pilipinas, making Maya a digital bank that can ensure not only the growth but also the security of your savings.
Pay Yourself First
Adopting the habit of paying yourself first is a simple yet transformative step that can lead to greater financial stability and success. This concept involves prioritizing your savings before paying any other bills or expenses, ensuring that you’re consistently setting aside money for your future, regardless of your other financial commitments. To implement this strategy, set aside a fixed percentage of your income as soon as you receive it. Whether it's 10%, 15%, or even 20% of your income, the key is to make saving a non-negotiable part of your budget.
If you leverage Maya Savings, you’ll be able to exponentially grow your savings each month. As previously mentioned, this product has a base rate of 3.5% p.a. However, you can boost it up to 15% p.a. by using your Maya Wallet or Maya Easy Credit to pay for airtime load, bills, and other purchases. Saving using Maya Savings is also convenient and affordable. You can access this digital bank product via the Maya app and deposit from your Maya Wallet for free. Depositing from other banks and e-wallets via PESONet is also free, while a small fee might be imposed if you use InstaPay. With Maya Savings, you can rest assured that you can consistently set aside money for your savings without hassle.
Start an Emergency Fund
Establishing an emergency fund is a crucial aspect of protecting your savings. It serves as a financial safety net that can cover unexpected expenses. Personal finance experts typically recommend to set aside three to six months’ worth of living expenses, as this amount is usually sufficient to cover essential costs such as rent or mortgage, utilities, groceries, and transportation in case of an emergency. Start by setting small, achievable savings goals, and gradually increase the amount as your financial situation improves. You can also use Maya Personal Goals to further increase the amount of your emergency fund.
Personal Goals allows you to manage up to five goals at a time. As such, you can create five separate goals, each one targeting a specific emergency, such as car repairs, sudden loss of income, and home repairs. This product can be accessed via the Maya app for your convenience. What’s more, depositing to your Personal Goals accounts is easy. You can deposit directly from your Maya Wallet or Maya Savings for free, while depositing from other banks and e-wallets via PESONet or InstaPay will incur minimal fees.
Furthermore, you can cancel your personal goals at any time, ensuring that you’ll have money ready to cover your emergency expenses when you already need it. The full balance from your Personal Goals account will be credited to your Maya Savings account.
Be Strategic When Paying Off Your Debts
Debt can be a significant burden. Having numerous loans, credit cards, and other debt obligations can create financial strain. However, if you’re strategic about paying them off, you can regain control of your finances and maintain your financial health.
There are several strategies you can use to address your debts. One effective method begins by categorizing your debts into different types, such as credit card debt, personal loans, car loans, and student loans. Once you have a complete list, prioritize them based on their interest rates. High-interest debts, such as credit card balances, should be addressed first, as they accumulate interest more quickly and can become a financial drain. By focusing on these high-interest debts, you can reduce the overall cost of your debt and free up more money for savings and investments.
Prioritizing financial discipline today ensures that you’re better prepared for tomorrow. With the right strategies and taking advantage of Maya’s online banking products, you can safeguard your savings and enhance your overall financial well-being.
