Sunday, March 7, 2021

Household Saving Habits to Adopt During the Pandemic

Financial fragility is a real thing for me, even more so now during the COVID-19 pandemic. This means an unexpected expense as little as P200 ($4) can cause a month’s financial struggle. Therefore, it is really important that households start adopting solid saving habits, so they can avoid falling into financial burden in the future. With that in mind, here are three habits to get you started:

Be Financially Literate

Bangko Sentral ng Pilipinas (BSP) encourages everyone to be financially literate. According to Investopedia, financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. The lack of these skills is called financial illiteracy.

How I wish I was taught about financial literacy back in school as early as elementary – even just the basics. I know enough that saving is good, but where do I save my money? Is a piggy bank good enough? I didn’t even know that kiddie accounts exist even then. And by the time I got my first job, the very thing I thought I needed (and what I thought was a sign of success) was a credit card. It was so wrong! I should’ve opened a savings account instead. 

So how do we become financially literate? We can enroll to online financial classes, get a financial consultant,  or search in Google about financial literacy and you will get a huge number of tips. 

Live on a Budget

Set a budget and stick to it. The first step, in this case, is to determine how you are spending your money, and find out what areas of your finances — housing costs, utilities, food, living expenses, entertainment, etc. — are ramping up unnecessarily.  Unnecessary expenses most of the time falls under the entertainment category such as cable subscriptions, music subscriptions, etc. Once you’ve reviewed your budget, you’ll have a clear idea as to where you can cut back on your expenses. You can then create your budget, keeping in mind all the expenses you can do without. During the pandemic, we get to deliver food often and I saw on TV that we might want to consume less. It is believed that consuming less is the biggest change people can make if they want to save up and live sustainably. 

Think Ahead

Being in a pandemic makes it hard for people to think about their future. Even me, I find myself wavering and a bit concerned about the things that might happen in the years to come. But since I have a family that includes 2 young kids, I have to inspire myself to think positive and to keep going. I go back to my bucket list and one listed is having our own house. Since we don’t have our own house yet, purchasing our own house inspires me to save and keep going. Sometimes, I would use a mortgage calculator online to help me with the budgeting and it gives me an estimate on how much I should save. 

 So how does thinking ahead help with the saving habits? When you think ahead and set a goal, it inspires you to have a plan, set a budget, and execute that plan. If you don’t have a goal, there’s a tendency you eventually become careless and just overspend your budget because you might think, “Why am I doing this in the first place?” So if you have a goal in mind, it will constantly remind you/inspire you to stick to your plan and budget. 

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