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Bright tips for hardworking Filipinos to spend income wisely

A study conducted by Bangko Sentral ng Pilipinas shows that 63% of Filipino households don’t have savings and a majority of them live from paycheck to paycheck. While low income is indeed a factor, but often, this predicament is aggravated by financial mismanagement.

Proper financial planning and mindset can help Filipinos manage their hard-earned money more effectively and even enable them to secure their future. The good news is, there are steps that can be taken to make this happen. Here are some of the ways hardworking Filipinos can follow to spend their income wisely.

1. Set goals

Goals can help you stay on the right path. They must be developed based on the S.M.A.R.T principle—Specific, Measurable, Attainable, Realistic, and Time-bound. This will serve as a guide on targeting goals that are appropriate for each life stage and are centered on priorities and changing needs. By using Sun Life's inflation calculator, you can know how much to save to fund your future goals.

2. Save first, spend last

Make savings a habit even with little income with the 50/30/20 budgeting rule: allocate 50% of income to needs, 30% to wants, and 20% to savings or emergency funds. This will help you maximize your income and ensure that there are funds available for you once you need it.

3. Identify needs versus wants

Although there's an option to spend on wants, it is important to prioritize needs first. Wise spending involves a balanced approach to expenses and getting financially protected at the same time. Always make sure your needs are met first before spending money on something you desire.

4. Monitor expenses

"Where did my money go?" Sounds familiar? This will happen if you don't practice expense tracking. Some people find it time-consuming but Sun Life's Expense Calculator can help you to identify unnecessary spending, eliminate potential financial problems, as well as knowing the amount that can be saved and invested. Remember, don’t spend more than what you earn!

5. Take advantage of investment opportunities

Researching investment products is crucial, so be cautious when selecting reputable companies to ensure that investments are safe and well-managed. To build wealth steadily, it is important to start investing as early as possible. Allocate part of your savings to life insurance and investment products so you can prepare for the future and you can make your money work harder for you.

Additionally, diversifying investments across various products and spreading out your funds can help you prevent major losses. While investments may take time to grow, the rewards are worth the wait.

6. Seek financial advice

Licensed financial advisors are the best people to seek financial advice from, as they are trained to help clients build their financial portfolios and can take this journey with you for the long-term. By having Sun Life as your Partner for Life, we can help you achieve your life goals, build your wealth, manage expenses, and eliminate debts. Connect with a financial advisor today to customize a plan for your needs and goals.


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