Can we adapt a frugal lifestyle—saving is close to the core of Filipino values, after all. Personal financial guru and book author Dave Ramsey wrote: “We buy things we don’t need with money we don’t have to impress people we don’t like.” In his top-selling book, The Total Money Makeover: A Proven Plan For Financial Fitness, Ramsey debunked many money myths that plague people everywhere. One of these myths that’s ingrained in modern-day lifestyle is the need to “keep up with the Joneses”. We’re spending way above our means to keep up with our well-off relative or neighbor.
Smart spending, sadly, is not exception. Many of us, from our grandparents to our younger siblings have embraced the wrong interpretation of “making the most of our lives”. For instance, take a quick assessment of your finances. Are you a “15-30” employee who’s working to survive until the next pay day? Saving money is important to your happiness and safety. Identifying misconceptions about frugal living is imperative if you want to make changes in the way you manage your personal finances.
Shake off the first paycheck tradition of treating everyone lunch
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Every Filipino worker knows of the unwritten law that takes effect the moment the first paycheck comes in—treating everyone to a feast. This practice has a lot to do with the concept of “giving back” to the people who’ve helped us or supported us before we’re financially able to support ourselves. While this may be a heartwarming gesture, spending your entire paycheck or footing the bill every payday will put you in bankruptcy in no time.
The expensive concept of “keeping face”
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The concept of keeping face is part of the Asian culture. This can easily be summarized as maintaining one’s reputation or dignity. Keeping up with appearance can be lost in various ways, from serious cases such as being humiliated by a malicious publication to the trivial like in dealing with coworkers. Interestingly, the more trivial an act is, the more common it is. Spending time with coworkers during lunch breaks can ruin your budget. Do you really need to dine out every time? Will it hurt to skip an overpriced cup of coffee? If you’re spending a lot and putting your finances at peril to keep a certain reputation, it’s about time to rethink your priorities.
No, you don’t need a gala for your birthday
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A frugal living lifestyle can be a bitter pill to swallow for some people. Take for example, 50-year-old businesswoman Luz. Luz’s income fluctuates based on circumstances affecting her retail store business. In good days, she can earn enough to live comfortably for a year without income, but in bad days, she can lose everything she’s earned over the past year. Such is the life of an entrepreneur. However, this uncertain flow of income doesn’t discourage Luz from splurging on unimportant things. Instead of cooking at home, she’d dine out most days or have pizza delivered over. She throws lavish parties especially on her birthdays to “thank the heavens for the blessings,” she says. True enough, she’d live like a pauper for a couple of weeks after her ridiculously expensive celebration.
Eating out often is bad for your health and your bank account
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If you’re dining out more than once a week, you’d need to re-evaluate your lifestyle. “When you combine weight gain and the poor eating habits that can come with dining out, it could be a recipe for disaster for your heart health,” according to nurse practitioner Jody Gilchrist of the University of Alabama. There’s nothing wrong with a trip to a fast-food once in a while, but this should be moderated. Create a meal plan for a week. This will ensure that you spend within your budget while treating yourself to affordable and healthy options.
Know DIY beauty tricks
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Unless you’re a professional image model, you don’t need weekly trips to the salon. Do you know that you can start investing in mutual funds with the money you spend on hair treatment? You should also take caution on exposing your hair and skin to chemicals. Go organic if you can. There’s a wealth of information online about non-toxic beauty products. You can even make your own hair conditioner or skin moisturizing products for minimal cost.
Owning more stuff will only make you want more
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Jem is 23-year-old call center agent who supports no one but himself. He earns way above an average Filipino employee, thanks to his American-run employer that offers one of the best compensation packages in the industry. It’s a shame, however, that Jem is a 15-30 worker who’s survives at the mercy of his paycheck. Every payday, he buys either new clothes or a gadget. He’s a collector, he justifies. Nothing can stop him from accumulating stuff he doesn’t need unless an emergency strikes and he’d have no other choice but to sell some of his collections.
Save money by living in a condo
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A frugal lifestyle doesn’t mean that you’d need to live in a cardboard box—which is exactly what we’re avoiding in planning our finances well. It’s all about making sound money decisions. What is more cost-efficient in the long-term? Is buying instead of renting a better deal? Condo living is a growing trend among millennials and returning overseas workers. It can save you a lot of money. No need for costly security systems as 24/7 security services are provided to all condo tenants. No need for gym memberships because most condos now include free access to fitness centers, spas and swimming pools. You can even host simple parties in the condo function areas and spend time with the people who truly matter to you.
Ditch the “more the merrier” mentality
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As humans, we are sociable creatures. We love being with people, sometimes even with people we’re not really fond of. This is a form of confirmation we believe we need to live a fulfilled life. Wrong. You are a complete individual in your own right. The validation from other people is nothing but a whim of your ego. You don’t need to spend time and money with a lot of people to have fun. As a matter of fact, finding simple joys during your precious me-time is a key to genuine happiness.
The cost of working hard and partying harder
Someone said that “youth is wasted on the young”. Conversely, a lot of money is wasted on believing that youth is all about having fun. Unfortunately, very few people in their 20s think about retirement planning. When is the best time to save for retirement? Now.
Avoid the vicious cycle of credit card debt at all costs
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Just because everybody’s doing it, you should too. Did you notice that it’s fairly easy to get approval for credit card applications during the “ber” months approaching Christmas? The simple reason is that companies want you to spend even beyond your 13th month pay. Discounts are everywhere and shopping malls extend operating hours until midnight just so people can maximize their bonuses and credit card limits. After the yuletide spirit dies down, what are you left with? Bills, bills and bills.
Frugal living is not depriving yourself
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The greatest misconception of living within our means is that notion of depriving ourselves of the good things in life. A purposeful life doesn’t revolve around what we can own, spend and show other people. As the saying goes, the best things in life are free—a peaceful home, a quiet time to indulge in a good book, and light moments with family and friends.
Living within your means is the first step to financial freedom. The way we handle our finances has a lot to do with our family values, environment and exposure to the world. If you’re barely surviving in your monthly income, you’d need to unlearn your money habits.