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Last time, I wrote about the things that I intend to not take with me in the new year. One of the things I wrote is this:
6. The mentality that being financially ignorant is coolBut it is a little vague, isn't it? I thought about it yesterday and figured I should remind myself (and you) of the things we should stop doing if we care to have a financially independent lifestyle in the future. Here they are:
I've written personal finance posts for a year, but being the human that I am, I still succumb to temptation and forego saving and spend on unnecessary things. Looking at my account, which should've contained more, I learned that it is uncool.
1. The One-Day Millionaire attitude
WHY: Because I've been like this and it has always led to buyer's remorse. Also, you won't have any money left for an emergency.
SOLUTION: Pay yourself (savings) first and give to the church or the community. Then pay all of your bills next. Invest some amount, and divide the remaining into categories of your budget. With the amount remaining, I doubt you'll still be in the mood to spend.
Source: popsugar.com
2. Disregarding emergency funds
WHY: Because so many people are unprepared for real emergencies, and this is the reason why so many people get buried in debt.
SOLUTION: Build an emergency fund by making an account (preferably without ATM) and depositing a certain amount monthly.
3. Spending so much to maintain an image or make an impression
WHY: Because in the end, the people who matter don't really care about what you have. Conversely, those who care about what you have may not really care about you at all.
SOLUTION: Stop associating yourself with materialistic people. Remember, you are the average of the 5 people you spend most of your time with, so choose wise and frugal friends instead.
4. The mañana (mamaya na or I'll-do-that-later) attitude
WHY: Because this attitude epitomizes laziness.
SOLUTION: Get an accountability partner who will remind you of your goals and check your progress. This person should be authoritative and focused. Yes, bossy will do; it's for your own good anyway.
5. Neglecting to prepare for retirement
WHY: Because when you retire, the amount you can get from SSS and PAGIBIG and the like may be insufficient. Actually, given the inflation rate, it is highly likely to be insufficient.
SOLUTION: Begin a retirement fund while you're young and healthy, not when you are about to retire in 5 years. Advisers don't recommend banks because the interest rates are too low; thus, your growth rate won't be a match to the inflation rate. Instead, check out stocks, mutual funds, and UITFs. Actually, here's a blog post I wrote about passive income.
6. Using the credit card too freely
WHY: Because in the end, you'd be paying an amount much higher than what you had borrowed. Repeat after me: credit card is not free money.
SOLUTION 1: Don't use a credit card. If you have one, keep it and use it for emergencies. If you have several, have your accounts cut off and choose just one credit card to keep.
SOLUTION 2: If you find using a card more convenient and safer, use a prepaid credit card. My own application for a BPI prepaid card (like the one pictured below) is still pending.
UPDATE: I just received an email from BPI saying that my card's ready. Woot woot!
Source: bpicards.com
7. Borrowing from other people to finance a want
WHY: Because aside from getting yourself into debt, you'll just look like a social climber.
SOLUTION: If it's not an absolute need, I believe you can save up for it. Buy the item in spot cash (your own, of course), and you wouldn't have to deal with hiya, interest, and singilan.
8. Shame when it comes to talking about money
WHY: Because everybody uses money and needs money to live, so it should not be a taboo topic. Also, no one else suffers for avoiding talking about money out of shame but you.
SOLUTION: Try to talk about money with your family. If not, try it with your friends. You might be surprised to know their interest to talk about it and you will learn from their insights. If this fails, try to surround yourself with people who talk about money healthily; this can even be done online.
9. Using "rich" as a dating criterion
WHY: Because aside from looking like a gold-digger, marrying a rich person doesn't guarantee that you'll end up rich, too.
SOLUTION: Instead of looking for a rich person, look instead for a practical person who handles his money, no matter how big or small, wisely. You may or may not end up wealthy but there's a big chance you'll end up financially independent.
10. Loving money over God
WHY: Because money won't ever love you back. Also, money won't bless you or protect you or guide you. Money doesn't know you.
SOLUTION: To pray to be financially independent actually means to be wise stewards of God's blessings. Everything we own is from God. Therefore, instead of getting giddy over rising numbers in our accounts or comparing what we have to what others have, let's give thanks and pray the God uses is to bless others.
Also, it really helps to tithe. This is no longer a law that we absolutely need to follow, but it is a good personal practice that teaches me many values. So let's just call it giving. It reminds me that God is much more important than material wealth by honoring Him with the fruits of my labor. So even at times when I feel like my faith is weakening, when I tithe, I am reminded to glorify God. The constant giving also reminds me to help the needy and trust God and his sure provisions. The New Testament doesn't require it, but I can't deny the fact that it helps me strengthen my faith and improve my views on money stewardship.
Source: hiswordinpictures.blogspot.com
What about you? What bad money habit do you want to break this new year? Feel free to add to the list!
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