Top 5 Money Tips for Breadwinners
Being a breadwinner of the family is like being a superhero. Its responsibility is akin to Uncle Ben’s final words to our favorite web-slinging hero, “With great power comes great responsibility”. The problem is we aren’t superheroes and our power is confined by human limitations. As a real-life superhero, you are the epitome of bravery, courage, fearlessness and determination. A role that is definitely fulfilling but can be overwhelming at times, it’s as if you’re carrying the weight of the world on your shoulders.
One of the unique traits and values instilled to us Filipinos is having close-knit family ties and looking after the welfare of our loved ones. We place high regard in prioritizing our family and even go to great lengths for them. It’s sort of ingrained in our system to repay our debt-of-gratitude and reciprocate what we owe to our family for raising us.
As Filipino breadwinners, we hold the duty of providing financial needs for our dependents. We are tasked to pay the bills, cover household expenses, bring food to the table, support educational needs, provide allowances, and earn a decent income that should suffice other basic necessities.
Financial freedom can be a dream, or should I say fantasy, for a breadwinner. But dreams or fantasies can become a reality with enough planning and effort.
Here are Top 5 Money Tips to help you work on your journey towards financial independence.
Tip #1 Track Your Expenses
Being a breadwinner does not end with disbursing money, it also means being responsible for your financial transactions. Keeping track of your expenses has quite a number of benefits when it comes to managing your overall finances.
When you track your expenses, it reveals your spending behavior and where your money exactly goes. This helps you stay within your budget and eliminate worthless purchases. Gradually, you will find yourself wiser and more careful with your spending. You gain complete control over your finances that will impact your decisions for your financial goals.
There are various ways you can easily track your expenses depending on your preference. You can write it down in a notebook, create a spreadsheet or make use of available expenses tracker apps that are free to download. Categorize your expenses, include dates, frequency and make a habit of logging your expenses, income, and savings.
Tip #2 Pay Yourself First
There’s nothing nobler than to live selflessly by putting the needs of others ahead of your own. This could also mean neglecting not only your own well-being but also those who depend on you daily. Being a breadwinner requires you to stay healthy and mentally stable at all costs and this is only achievable if you start putting yourself first.
By paying yourself first, it contributes to your progress towards your financial goals. Prioritizing your own necessary expenses (needs, savings, investments, insurance, retirement plan) rather than focusing on the immediate needs can only guarantee you a better financial future. Pay yourself first by:
Making Good Investment Early
Studies have shown that the earlier you invest, the richer you get. Investing in the early stage of your life allows you to develop a habit of saving more and put a generous amount of money in your future pocket as money grows in time. Making good investments at an early age can reap huge benefits later which puts you ahead of everyone who prefers to invest at the latter stage in life.
Read more: 5 Investments You Need to Have By Your 30s
Don’t Live Like a Monk (Spend on your needs and wants but keep it within the budget)
Preparing for your future by saving and investing is non-negotiable but that shouldn’t hinder you from living in the present. Categorize your expenses according to your needs, wants, and savings. Dividing your income and allocating a specific budget for each category can work wonders in balancing and fulfilling your financial responsibilities.
Let’s tackle this more as we move on to Tip #3.
Tip #3 Be Realistic with your Finances
We tend to be unrealistic when spending for the lifestyle we desire versus what we can actually afford. It’s part of the human instinct to constantly compare ourselves with others and this is especially accessible today, thanks to social media. This can significantly affect our ability to set realistic financial goals for ourselves.
We have to recognize that people choose the part of their lives they only want to share. That is why it is important to make a conscious effort to stay realistic about your own situation and not get caught with the seemingly fascinating life of others.
To tell you truthfully, everyone lives on a budget. It’s only a matter of what your priorities are and what you are aiming for. For breadwinners like you, putting a strict budget in place ensures that all important things are taken care of and leaves more money for your wants as well.
The 50/30/20 rule is a simple and easy method to budget your money more efficiently. The basic rule of thumb is to divide your income into three categories: 50% for needs, 30% for wants, and 20% for savings. This way, you can put your money to work, avoid overspending and build up your savings over time.
50% Goes to Needs
These are basically all the essentials you can’t live without and the bills you can’t avoid paying such as rent, groceries, and utilities (water, electricity, etc.). If you have a big family and your necessary expenses take up half of your income, you might need to spend less for your wants and savings.
30% Goes to Wants
These are the things you desire and are not actually needed for you to survive. These include all nonessential spendings like a vacation, a new bag, dining out, shopping, and a new gadget. All the extras and upgrades you spend your money with to treat yourself.
20% Goes to Savings
This is the money intended for your future financial goals including emergency fund, retirement savings, liquid savings and investments. If you’re single but supporting your parents, consider increasing your savings budget for when you have your own family.
Tip #4 Save! Save! Save!
I know I know, this isn’t new to you, but have you actually been saving up? I’m guessing you haven’t considered it yet. Well, sometimes the hardest thing about saving money is to just get started.
Budgeting and saving at the same time may seem stressful but let’s try looking at it in a different light, shall we? Start by visualizing your exciting life in the future. Is it buying a new car? Moving into your own house? Traveling to Greece? Or just splurging on something you’ve always wanted for yourself? Find whatever it is that will motivate you to start saving.
By following the first three tips above, you can easily save money in no time. It doesn’t matter how big or small the amount is, saving up is an accomplishment in itself, and seeing your money progress can be a source of motivation to continue with what you have started.
Open a Savings Account
You can start by creating a designated savings account for your savings. By doing so, you minimize the temptation to spend your savings to cover your expenses and encourage you to stick to your planned budget.
Security Bank offers a wide range of products. If you’re planning to open an account for your savings with reasonable opening and maintaining a balance that comes with higher interest rates than the traditional savings account, then Build Up Savings is the right account for you.
Learn more: Build Up Savings Account
Automate Your Savings
Another simple move to improve on saving money is automating your savings. Putting your savings on autopilot can prevent you from spending the money for something else and prioritize your saving contribution that will help you in meeting your saving goals. Another great thing about automating your savings, especially if you’re the forgetful type, is that the responsibility will no longer be on you. You can simply enroll your account for an auto-debit arrangement, enabling the automatic collection of funds and transfer it directly to its designated account (emergency fund account, investment, insurance) on the scheduled date.
Though it is important to have an emergency fund equivalent to your salary for three to six months, making a big portion of your money work for you can step up your game in your financial stability and security. Basically, idle money is wasted money. Having money in a bank account–no matter how high the interest rates are, is kind of wasted.
Some of the investments you should invest in are:
- Unit Investment Trust Funds (UITF)
- Blue Chip Investments (top of PSE), can be achieved through mutual funds
- Real Estate
- Side Gigs/Businesses/Franchises
Tip #5 Look for Additional Income
With technology today, it is with no doubt that earning an extra income can be done at the comfort of our homes. These days, it is very common to see everyone having freelance jobs. Aside from budgeting and saving up, it won’t hurt to increase your income too.
Don’t just depend on one source of income, develop multiple streams of income to create the life you are dreaming of. Having an extra income will help you increase your budget, boost your savings and investments, and leave extra money for fun as well.
Make use of those skills you have long been hiding or just start exploring on things that spike your interest. You will not only learn new things, you get to earn money too.
Here’s a list of some of the many freelance jobs in the Philippines that you can start with:
- Teach English online
- Sell homemade food online
- Sell pre-owned items online
- Start an online reselling business
- Sell your services online (e.g. designing/editing, instrument lessons, tutoring)
- Become a Virtual Assistant
- Create and monetize your blog
- Create online course/webinars
- Do typing jobs
The list can go on but it is vital to find what works best for you. All you need is resourcefulness, dedication and time to succeed.
Now that you’ve learned how to manage your finances wisely, keep working hard and smart, this will bring you closer to your dreams and goals. Being a breadwinner is tough and can be draining physically, mentally and financially but seeing your loved ones individually healthy, and living well is worth it. We all dream of living abundantly without worries but building your wealth requires discipline, commitment and hard work.
Embrace the grind, enjoy the process, behind every sweet success is sweat. Keep pushing further and keep going, life will reward you for what you deserve.