“Don't tell me what you value, show me your budget, and I'll tell you what you value.” — Joe Biden
Someone needs to tell you the cold, hard truth. Most Filipinos voluntarily choose to become financially poor. How do I know that? Well, try to observe the people around you most especially on social media. What do you notice? Most of your friends share their latest gadgets, their fancy dinner, their extravagant vacation.
And when you try to talk about money to these kinds of people, they tend to get uncomfortable, most especially if the topic is all about financial wellness.
If it isn't enough of a proof, then here are five things most Filipinos consciously choose that make them financially poor:
We choose entertainment over financial literacy.
When I tried to approach a high school friend of mine to invite him to my free financial wellness seminar, I was bombarded by excuses. On the same day and time of my free financial wellness seminar, this guy shared on Facebook how he is spending his time—chilling with friends while drinking their beers.
This is the sad truth about most Filipinos today. We do our very best to avoid anything related to our financial well-being. We make up excuses so we can justify how irresponsible we are when it comes to increasing our financial literacy.
We work to make ends meet, not to build wealth.
When we work, we only do so for us to pay the bills and have a little fun by spending on things that won't help our financial well-being. On the other hand, those who are winning in the game of money are working hard so they can build their wealth.
We are working not to lose while the financially successful people are working hard to make sure they win in the game of money. See the difference?
We prioritize spending over saving.
One of my responsibilities as a financial adviser is to help Filipinos get started investing. One day, I approached a high school friend about the idea of making part of his income work harder for him. Once again, I found myself in an excuse parade. The next day, this same guy posted on Facebook a photo of himself holding a box of his shiny, brand new PS4.
Ladies and gentlemen, this is how we take care of our future selves and families. We prioritize spending over saving and investing because we can't seem to control the itch of instant gratification.
We save to spend instead of saving to invest.
It is not true that most Filipinos don't save. Of course, we do save. But when we do, it is because we are saving for an expense. We save for our next overseas trip. We save for our next smartphone. We save for our next extravagant expenses.
We never save so we can make our hard-earned surplus grow through investing. And that is how we voluntarily choose to become financially poor.
We only focus on the present and rarely think of the possibilities of tomorrow.
"We'll only live once!" you exclaimed. And I agree—100%! We will only live once and I would rather live a financially secure, prosperous life rather than fool myself that I am enjoying life today by sacrificing what could become a bright future for myself and my loved ones.
By also considering the possibilities of tomorrow, we can shift our focus and choices from carelessly spending to wisely managing our finances. Always remember that you can use the 50/30/20 rule so you can enjoy life to the fullest. Spend 50% of your income for your daily living expenses. Spend 30% of your income for your lifestyle expenses or what you call "wants". And then spend the rest of your income—20% to be exact—for your financial priorities and responsibilities like savings, investments, and debt repayment.
Whether we admit it or not, most of us are choosing to become financially poor. Our financial choices, habits, and decisions are the living proof of that and you are sharing all of them on social media. If you think people do care about your latest extravagant expenses, think again. These same people that you are trying to impress won't help you years from now when you find yourself struggling financially because of your failure to prepare.