FFE Magazine

Filipino attitudes on saving and how to get over Them


Senior citizens are counted as one of the poorest groups in the Philippines. According to statistics, only 2% of Filipino seniors are living independently. The other 98% are dependent on family, charity or are forced to work to earn a living.


 Filipino attitudes on saving and how to get over Them 1


This is a sad reality that many of us must think about now if we want to live a healthy and comfortable life in the future. Fortunately for us, we can do something now to reverse this trend, and it all starts with a simple phrase we have to think about every day: save money.


But how do we start saving money right now? First off, we need to look at attitudes we have about saving that we should change:


Filipino attitudes on saving

Filipinos are often confident with how they manage their money. There is also a sense of entitlement that pushes us to buy things. In truth, misinformation or, wrong lifestyles and attitudes reveal that most of us are prone to ‘blind spending’ and have poor financial literacy.  Because of wrong choices, most of us are grossly unprepared to meet financial problems in the future.

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The Bangko Sentral ng Pilipinas said in a 2013 study only one out of four households has savings. Families who have savings also save around 20% of their monthly salary. This may debunk the myth that money for Filipinos flows like water from our hands. But then again, comparing this figure to regional countries, we can see that we are still way below average.


Our neighbours in Asia (China, Singapore, Malaysia, Thailand) are setting aside around 30% of their income. According to financial consultant Randell Tiongson, saving 30% of our income will bring us financial stability and even make us rich!


Why aren’t there more of us who are saving?


Why we don’t save, why we do

Findings suggest that cultural attitudes like the Mañana habit (Mamaya nalang) allows us to make excuses about saving. Another reason is that, because some of us earn just enough to meet the basic necessities or to pay off debts, there’s simply no more money left for savings.


On the other hand, those who do consistently save money say their main purpose is to get out of debt and be financially independent. Others use the opportunity to start a business and generate more income.


In other words the motivation to save also depends if we have a goal in mind in the first place.


How to save

Do not put off ‘til tomorrow what we can do today — this saying also applies to saving. The best thing about saving right now is that the earlier we start, the more money we save, making us live a more comfortable, secure and stable life in the future.

Filipino attitudes on saving and how to get over Them 3

But how do we save? Finance experts have made saving more visual for us, here are some formulas that are helpful for our savings plan:


1. There are those who follow the wrong saving formula that goes: Salary – Expenses = Savings. The correct saving formula should be: Salary – Savings and Investments = Expenses. This is the most basic formula for saving money. This way, money for savings will surely be left untouched.


2. You can try the 10/20/70 formula, or: 10% of income goes to emergency funds; 20% of income to savings and investments; 70% to debts, necessities and other expenses. This way, emergency situations won’t mean having to sacrifice your hard earned savings.


3. Another formula is the 50/20/30 that is broken down to: 50% basic necessities; 30% for ‘lifestyle choices’ (here we put in gadgets, travel plans, wants and other luho); and 20% for debts, investments, contributions and savings. This is geared toward people who want a bigger cut on lifestyle purchases.


4. Follow the recommended 30% savings amount. Thirty percent is already a very big amount and might be difficult to set aside in one go. One tip is to start with an amount that you can manage, say 6% of your income. Then increase this gradually every one to three months until you can consistently set aside 30% per month.


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When we want to use our savings wholly depends on its purpose. This is why we should also try to set a clear goal on why we are saving in the first place. Are we saving for retirement? Are we saving to start a business or to travel?


This is a question that only you can answer. But even before finally setting a specific purpose to your savings, start setting aside an amount of cash right now!





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