spending habits

Common Sense Money Advice That People Don’t Follow

Common Sense Money Advice That People Don’t Follow

Reading Time: 3 minutes

Money has always been a top source of stress for most people.  If not addressed, too much worrying about money can lead to serious physical and emotional problems. It can even result in a breakdown in relationships. How to solve money problems then?  There are tons of financial advice that people probably already heard or read about.  In fact, most of these advices are simply common sense yet one the greatest mysteries about life is that no one really follows them.  It sounds so easy to do but for most people, it is very difficult to follow. Here are some of the common sense money advice that people don’t follow:

1.  Spend Less Than You Earn

This rule is so simple.  Just live within your means.  Obviously, if you spend more than you earn, that will only spell debt.  Even a grade schooler knows that if you subtract more than you add, you will end up with a negative number.  You need to have financial discipline; otherwise, it will be very hard to create wealth. Avoid keeping up with the Joneses.

There are many ways to reduce your monthly expenses.  It helps to have a budget. The money jar budgeting system is a good money management technique because it not only helps keep your spending in place, it also helps slowly build your wealth. If spending less is really not an option, then you need to look for ways to earn more money.  

2.  Understand How Credit Cards Function

How many people are buried in consumer debt simply because they do not understand how credit cards function?

Credit cards are very useful.  With credit cards, you don’t always need to have cash.  You can purchase anything without having to worry of paying them immediately.  However, if you don’t have a basic understanding of how it works, credit cards can turn into your worst nightmare.  Always remember that you are not using your own money when you purchase items using your credit card but rather you are borrowing the bank’s money.

Credit card companies use the power of compound interest to their advantage. Compound interest is a very powerful mathematical concept that you can use to increase your wealth. Unfortunately, it is a two-edged sword. If used against you, it is a sure way to financial bankruptcy. That is why understanding how credit card functions is a necessity if you have a credit card.

Unless you know how to manage your credit cards, it is better for you to refrain from using your credit card altogether.  Use credit cards only in emergencies.  Buying because it is on sale even though you don’t really need it is not a valid definition of an emergency.  

3.  Automate your Savings

One of the lessons of this pandemic is the importance of having a savings account. Life is unpredictable. Saving money can ensure financial stability in case of emergency.

Pay-yourself-first has always been the initial advice that wealth managers will tell you as the first step towards building your wealth.  Unfortunately, most people would rather spend or pay everyone else first before themselves.  Savings always comes last.  Usually, people save using whatever it is that is left (if there is any).

The best strategy to avoid this scenario is to automate your savings.  By regularly setting aside a fix amount through automatic savings, you will soon be able to build up your emergency fund. One of the wealth rules of the richest man from Babylon is to always save 10% of income.

4.  Seek Help from Qualified Persons

If your financial woes are already big enough for you to handle on your own, then it is time to seek help from other people.  If your problems are about money, ask a professional in financial planning to help you.  If you cannot afford your own financial planner, then ask a friend who is an expert in handling money.Don’t just ask any friend.

 The problem with most people is that they normally seek advice from friends or relatives who are close to them.  However, they fail to consider if these people are also having financial problems of their own too.

Think of it this way, if you are in school and you are having problems with your Math subject, obviously, you will not ask your Filipino or Science teacher to help you.  Instead, you will seek the help of your Math teacher or a fellow student who is good in Math because they are the ones who can help you.

Remember to always ask the correct persons for advice.

So, If you want to have a better financial life, it is best to follow the common sense money advice that people don’t follow.


First published in Pinoy Smart Living on 03.26.2019.

Photo by Monstera from Pexels

Posted by A.L. Jonas in Financial, 0 comments
Money Leaks That Can Sink Your Budget

Money Leaks That Can Sink Your Budget

Reading Time: 3 minutes

There are little money leaks that can sink your monthly budget. Most of them are unnoticeable unless you track your spending. If you’re already budgeting but still end up overspending, then check out for these money leaks in your spending habits.

1. Transaction Fees

Late payment fees and other financial transaction fees can leak money out of your budget without you noticing it. These are small amounts that you don’t think will affect your budget that much. Once they accumulate, that’s when you realize they already ate a huge chunk out of your monthly budget. This applies to credit card fees, insurance fees, loan fees and online money transfer fees. Check your monthly statements so you can plan ahead.

TIP: Make it a habit to always check your transaction receipts for any hidden fees or charges. Also, pay your bills on time to avoid incurring late payment fees and other penalty charges.

2. Impulse Buys

Little purchases that you make several times a month won’t be little once added up. Especially if these items are just trendy for a time or they’re for one use only. That one cup of coffee a day can eat a big chunk of your budget. This is one of the little money leaks that can sink your budget. It can be avoided if you plan and list down what you’re actually going to buy in a supermarket, for example. The best way is to set aside a budget for it so you’re prepared for it. You can set aside money for fun that you can spend however you want.

TIP: Make a wish list of big and small items that you need and want to buy and set aside money for them. Don’t buy it if it’s not on your list and it’s not covered in your budget yet.

3. Discount Buys

Just like impulse buys, discount purchases are also a common cause of overspending. Sale items are often packaged attractively and the festive spirit of the “sale day” event makes it even more enticing. Making transactions online only makes things easier to splurge. Not all discounts are great buys though. If you’re buying an item only because it’s on sale or because you have a coupon, then you might be wasting your money.

TIP: Having a wish list and the budget to buy the item on that list is one way to avoid spending on discounted items that you don’t really need. If you get an item on your wish list at a discounted price, then consider it as savings.

4. Wasting Products

Sometimes we buy in bulk because of the huge discount. Then we find out that we’re not really fond of the product so we end up giving them away or disposing of them in the trash. Or they expire before we can use them so they end up in the trash. This is why a list of what you need to buy is important. It is also important to list down exactly how much you need so you maximize your use of the items. Subscriptions to services that you don’t actually use regularly is also a leak in your budget. So review your subscriptions and see which ones you don’t need or you can downgrade.

TIP: Preparation is key to ensure that you use up perishable goods before they expire. Meal prepping is one way to ensure that you don’t end up throwing away produce. It also allows you to control what you eat so you can choose to eat healthier meals.

Do sometimes feel that you are living beyond your means? These money leaks could be part of the problem. To ensure that you don’t fall victim to these little leaks that can sink your budget; become more aware of your spending habits. Learn how to discipline yourself so you can figure out how to spend your money wisely.


Feature Image: Original Photo by Andrea Piacquadio from Pexels.

Posted by H.J. Rangas in Financial, 0 comments