1. Lack of sufficient income

A huge number of Filipinos are below poverty level which means they can barely provide for their basic needs and there is simply no money to save. Many reason out that there’s only enough money to cover for the family’s regular expenses, so what’s there to save?

Instead of resigning yourself to a lifetime of low income that’s hardly sufficient, use it as a challenge. If the problem is lack of income then find ways to increase your earnings. Do something to rise above your predicament. Adversity, they say, is the mother of creativity. The burning desire to overcome their less than desirable condition has led self-made billionaires like John Gokongwei and Manny Villar to rise to the top.

2. Poor spending habits

Way too many people have very poor spending habits; wasting their money on a lot of things that they don’t really need. Most of them seem to make it a point to spend all the money that gets into their hands even if they don’t have to. Worse, some people “spend” their money even before they have earned it (your credit card allows you to do that).

Regardless of your income you should be able to save, even a little, if you break out of this habit of irresponsible & reckless spending. Always strive to live within your means. Spend less than what you earn and spend your money wisely;

3. Lack of patience

When it comes to growing money, patience is a virtue a lot of Filipinos don’t have. They want to get rich as quickly as possible; that is why many fall victim to investment scams. They are easily attracted to get-rich-quick schemes that promise unbelievably high “guaranteed” profits without having to work for it. Many can't wait for their money to grow to the level that they desire so they give up on saving and instead choose to try their luck on gambling.

Building wealth is a slow process that requires systematic & consistent saving over many years. It’s not some kind of magic bean that can grow to great heights overnight. Be patient and be persistent in saving; do not focus on how slow your money is growing. Instead look at how near you’re getting to your financial goals with every peso you save.

4. Procrastination

The “mamaya na” habit of Filipinos are so prevalent in our society that is shows up in almost everything we do; even with saving. Many put off saving for another day… and then another… and then another, only to find out later that they’ve run out of time. When a person lands his first job, instead of saving he indulges in everything his money can buy as a reward for the sacrifices he endured in college, saying “bata pa ako, enjoy muna, tsaka na lang yung savings.”

Then he ties the knot and settles down and puts off saving again for an indefinite time in the future because “mag-eenjoy muna kami ni misis at marami pang bibilhin!” The kids come along and saving becomes more difficult because of the added expenses especially when they get to college. Late in their careers, they still don’t have any savings and both parents are continue to work their butts off to provide for the family. Finally, they spend the rest of their lives thinking about what happened and what could’ve been done to make their retirement much more comfortable.

Don’t allow yourself to go down this path. Start saving early and don’t wait for the “right time” to start, because the right time is NOW!

5. Close sense of community

Filipinos put a lot of value on culture and tradition even if it’s undesirable. Growing up in a poor society seems to prevent them from taking steps to improve their financial condition. Most people living in poor communities are not likely to desire for a better life. If they do have the desire, it is not strong enough to drive them into action. “Isinilang kaming mahirap, mamamatay kaming mahirap” is a common statement of resignation to their fate.

Don’t allow the mistaken belief about “the poor getting poorer and the rich getting richer in our society” hold you back from striving to rise above adversity. As long as there are people who have successfully risen above poverty through their own perseverance, there is always hope that you can, too.

6. Parental & peer pressure

Poor parents usually fail to encourage their kids to seek financial freedom, much less teach them about saving. There are also parents who pressure their children for regular financial support which affects their capacity to save.

Responsible parents should encourage their children to strive for a better life regardless of their present financial condition and teach them the right saving habits and proper money management even if it means they have to learn it first themselves.

Filipinos are known to be “mabarkada.” Unfortunately some barkada will try to influence their friends to abandon desires for a better life because they’re having too much fun spending all their money or it’s “suntok sa buwan.” People who are easily swayed by their barkada may choose to give up saving and working hard rather than risk getting kicked out of the group.

Do not let anyone dictate your future. Avoid people with “crab mentality,” who will pull you down every time you take a step going up. Surround yourself with people who will support and motivate you to reach for your dreams. Look up to highly successful people; read and learn more about them. Make them your personal role models and let them inspire you in your own journey towards success.

7. Lack of understanding about personal finance

There are people who are capable of saving but still fail to do so because they do not know how and nobody bothered to teach them. In short, they are financially illiterate. People who are lacking in financial intelligence will not be able apply strategies for saving effectively or identify investment opportunities which can greatly boost their savings. Those who do not have adequate understanding about personal finance can also easily fall victim to dubious investment schemes as well as to expensive & predatory loans that can wreck havoc on their finances or wipe out their lifetime savings.

At every opportunity, educate yourself about personal finance; PinoySmartSavers allows you do to that for free. Read books and attend seminars to learn more about saving, money management & investment strategies. Many people frown on spending a few hundred pesos for a book or a couple of thousand pesos for a seminar. They would rather spend their money on beer and endless partying, a nice pair of jeans or shoes, a new cellphone or other things that don’t add any value to their savings. What they don’t realize is that the knowledge they acquire from these books and seminars could help them build hundreds of thousands or millions in savings and could very well be their ticket to becoming rich. You do not get rich by spending!

You don’t have to become a guru on personal finance to become wealthy. You only need to know the basics, enough to allow you to manage your money properly and make smart investment moves. In fact, too much information can lead to confusion and can do more harm than good.

Last update: February 14, 2008
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