Many Filipinos are practical spenders, but their saving habits could still use some improvement. According to the Bangko Sentral ng Pilipinas (BSP), over 51.2 million Filipinos are still unbanked as of 2019. On the bright side, account ownership jumped to 28.6% in the same year from 22.6% in 2017. Considering that, it’s safe to assume that more Filipinos will learn the importance of a savings account in the years to come.
However, we can’t just ignore the reason many Filipinos remain unbanked. According to the BSP survey, “not having enough money” was the top reason unbanked Filipinos cited. Some of these respondents were people receiving government benefits via cash or check. But 60% of them were working adults without a bank account wherein they could receive their salary.
Hence, if you just received your first paycheck, it’s imperative to learn how to save at once. Some companies assist their employees in opening a bank account, so if that’s your case, then you’re all set to begin. But if you receive your salary or wages in cash, there’s more work to do, but you’re well-equipped to save all the same. With that said, here’s a guide to saving money for first-time income earners:
1. The Amount of Money You Should Save Depends on Your Situation.
Many articles recommend saving PHP 50 or PHP 100 a day. You don’t have to follow those. The amount of money you should save depends on your situation. That said, holding less than PHP 50 a day doesn’t automatically mean you have bad habits. Alternatively, saving more than PHP 100 a day doesn’t necessarily make you a better saver.
What makes you a good saver is being able to afford your needs without going short on cash. That means you can pay your bills on time while feeding your family or sustaining your lifestyle. So don’t be pressured to save a specific amount of money every month or week. This is your life, so it’s only you who knows how much it costs to maintain it.
2. Open a Savings Account
If you don’t have a savings account yet, go to your area’s nearest bank and ask about the requirements. A typical savings account requires a minimum balance of PHP 5,000; PHP 10,000 if you’d use a passbook.
A savings account is a form of investment. And speaking of investment, it is different from saving. Once your money is in your savings account, it starts to earn interest. If you need to spend it, you have to withdraw it, reducing the interest it can achieve.
But what makes savings accounts good for first-time income earners is convenience. It’s not like a time deposit or treasury bond that stays “locked” until its maturity. You can withdraw your money anytime through an ATM. If you instead want to pay for purchases electronically, you can apply for a savings debit card. It will automatically deduct the money from your account when you make a purchase.
3. Learn to Differentiate Between Wants and Needs
Many first-time income earners spend their first paycheck on something they want. While that’s not inherently wrong, it can warp your perspective on wants versus needs. For example, the new iPhone 13 might seem like a need right now because you haven’t upgraded your phone for a while. But if you still have a working phone, then what makes the iPhone 13 a need?
This isn’t to say that you shouldn’t buy the iPhone. Instead, it urges you to sort your priorities. Once you start prioritizing your wants, you will need to set aside your needs, affecting your budget and savings. On the contrary, if you spend for your needs first, that’s called being fiscally responsible.
4. Use Credit Cards Wisely
Earning a specific amount of income can make you eligible for a credit card. This means you can already make purchases on credit and pay for them at a later time. For beginners, a credit card can be tempting to use for expensive purchases, like electronics or flight tickets. To be fair, using a credit card has its advantages, but you’ll want to use it in moderation. Acquiring too much credit card debt can hurt your savings or revoke your eligibility.
5. Save for the Future
Many first-time income earners save for short-term needs or want like clothes, electronics, or home appliances. But the true goal of saving is a secure future. Your money should grow over time so that you can retire comfortably.
Savings is where investments in the form of insurance policies come into play. These securities aren’t pointless expenses; they’re essential. So once your income stabilizes, save for investments too because they’ll ensure that your retirement, plus your children and their children, will be covered by your hard-earned savings.
Spending for the things you want can become tempting, especially for first-time earners. However, keep in mind that what you save now will help you (and your children’s children) in the future. As long as you know your priorities and spend in moderation, you’re one step closer to this ultimate goal.
Ayesha completed her Doctor of Philosophy in Biochemistry and started her career as a College Lecturer in 2013. Today, she’s a happy mom of 2 Kids in the field of digital marketing. She loves reading books, spending time with her family, and making delicious food for her husband.