In December of 2017, despite having received my salary, quarterly incentive and 13th month pay, I still found myself broke and worried about next month’s expenses. I was working since 2005 but had no savings. I mean I tried but somehow always ended up with nothing. After more than 10 years, I was earning more than I expected. Yet, I still found myself struggling to make ends meet. Every month, I would barely make it until the next payday. I’d always worry about running out of food and transportation allowance. At times, I had to borrow money just to be able to get to work.
After 12 years, I had no savings. No retirement funds. No emergency funds. As my salary increased, so did my expenses. I grew up in a single income family. My mother was earning PHP75 per day for 6 days a week, less than PHP2000 a month. Fortunately, we were able to live rent free and I was able to go to school with assistance from the school and generous people who expected nothing in return. Most times, I couldn’t even afford to eat in school and my friends would cover for me. December used to give me anxieties. I used to escape by spending Christmas or New Year’s Eve at my friend’s house. One Christmas, my family had absolutely nothing on the table but our neighbor was kind enough to share. You think because of these experiences I’d learn how to save, especially since I’m the breadwinner now? Nope. I was eager to spend because I finally had my own money. Also because I was so used to being poor, I had a poverty mentality– the belief that because I was born poor, I would remain poor and there’s nothing I could do to change it.
Back in 2012, my salary had a 45% increase when I started a new job. I was finally earning my dream salary. I could have fixed my finances by then since my expenses remained the same but nothing changed. In fact, it became worse. I was always late on my bill payments. I would spend mindlessly on food and things I didn’t really need. I remember going to an expensive nail salon simply because I was bored. I once bought all these dresses that I never wore just because I was sad.
In 2017, I was earning 35% more at another company. You’d think by now things would have changed already. Nope. I was still living paycheck to paycheck. In all of these, I experienced self-pity, anger and desperation. I realized that, I had to acknowledge the problem: ME. In acknowledging this, I finally felt in control. That meant I could finally change the situation. So, in December of 2017, I “gifted” myself with a book with the title of Where Should You Invest by Marvin Germo, CEO of Stock Smarts. I had read Bo Sanchez’s books as well, attended a few seminars, followed financial experts like Fitz Villafuerte and Dave Ramsey, watch YouTube and read anything and everything that was about personal finance.
I started to look into my habits and the mindset that goes with it, about how I spent mindlessly until I ran out of money. It didn’t matter if I spent on little things because they’d eventually add up. And did I mention that I spent money when I was sad or bored? I remember spending money because of other people, buying items simply because someone else did. There were also times that I’d treat my friends when I should have saved whatever extra money I had. There were times that I’d say YES when I should have said NO. I’d buy clothes because they looked trendy on others. I would buy items and food I could hardly afford simply because I thought I deserved them. There were also times I’d buy things just because someone I know was selling them and I couldn’t even pay upfront. Still, I remember feeling so deprived and envious about other people’s lifestyle.
Confronting the problem, reading and researching about personal finance made me realize that I had the capacity to save and invest and change my financial situation regardless of how much I earn. In January of 2018, I started to make small changes. I thought really hard about my priorities. I needed to stop trying and wanting to be like other people. I started to list down all my expenses. While my fixed monthly dues were non-negotiable, I could make changes in other areas. First, I started to set aside a portion of my salary, about 15% of my income and put it in a separate bank account. I did this consistently. There were small bumps along the way but I persevered. I stopped buying clothes, bags and shoes for a while. I stopped going to the mall unless really necessary to avoid impulsive buying. I stopped buying things whenever I was sad or bored. I stopped eating out and going to the movies as often. I brought my own lunch to work. I started saying NO to invitations as well as lending money. Guilt was also another thing that I needed to work on. Remember, before you try to help everybody else, help yourself first. Don’t feel guilty about it. It’s never selfish to put your well-being first. After all, we can’t pour from an empty cup. So, I started to let go of my old mindset, bad spending habits and even a few friendships. Some, temporarily. Just so I could focus on myself and my family without any outside pressures.
What I’ve learned in the process is that when you track your expenses you become aware where every small amount goes and you’ll feel accountable. You will see your unnecessary expenses and you can now find ways to manage your spending habits. That, alone, gave me a sense of satisfaction and made me realize the power I had to change my situation. However, I also noticed that when you focus on yourself it can become a bit lonely, at first. So, in order to avoid getting sidetracked I continued to watch personal finance videos. I continued to read and watch anything about budgeting, saving and investing. Soon enough the feeling of missing out wore off.
After a year, part of the amount I was able to save I used to pay off a 4-year-old credit card debt. I have a new credit card now but I make sure to pay it off before the due date. I also started a retirement fund. It’s not like I’m suddenly a millionaire BUT I have learned to set aside money for unexpected expenses while working on my emergency fund and other goals. I don’t have to panic anymore over running out of food or transportation money. I am able to pay my insurance and other bills on time. I try to live within my means so I won’t have to borrow money. I’ve realized that I can’t keep up with the Joneses and that’s okay. I no longer try to follow the crowd. It doesn’t matter if my life seems boring to others or that I am a “killjoy” (as someone once said). I don’t have millions (yet) but I am willing to improve my life. I can’t do that If I keep making decisions based on other people’s lives or opinions.
Had I not taken these baby steps, nothing would have changed. You see, in order to change your situation, you need to change your mindset and habits. It doesn’t matter how slow but progress is still progress. Through this journey, I have come to make peace with my life and celebrate my victories no matter how small they are. Most of all, my self-esteem is healthier because I no longer feel the desire to have the kind of lifestyle that others have.
It’s Christmas time once again and you might feel the need to reward yourself for working so hard through this very challenging time. You might feel the pressure to give more than you can afford because you’re feeling generous but you don’t have to go broke doing this. Be true to yourself. Give and spend only what you can. You can still enjoy the moment without ruining your finances. You can still enjoy the present without compromising your future. Prioritize and allocate accordingly. Your future self will thank you for it.