Raise your hand if you’re constantly wondering where your money goes at the end of the month. You’re earning a decent amount of money. But why does it feel like you’re living paycheck to paycheck? Why does it feel like you’re only spending and not building on something for your financial future?
Well, the answer can lie in your financial habits. The way you make day-to-day financial decisions―from the minor to the major ones―can make or break your financial goals. In case you don’t know what these bad financial habits are, here are ones you need to avoid or ditch altogether ASAP.
Not Having a Budget
If you don’t have any kind of spending or budgeting plan, then it’s really no surprise that you’re not meeting your financial goals. Having a budget is the first step in making sure that you pay off everything that needs to be paid and put away the rest for savings or emergencies. In short, it’s your springboard for making good financial decisions and living a healthy financial life.
When you have a budget, you’ll also know where you can cut back. You’ll be able to control and eliminate your mindless, frivolous, or unnecessary spending, such as daily coffees from coffee shops, subscription or streaming apps, or eating out or ordering from food delivery apps.
Once you determine which expenses you can actually do without, you’ll realize that you can actually save a few thousand pesos more each month. Save even more money by doing your own laundry instead of paying for laundry services, washing your own car, or bathing and grooming your dog.
And to help you better track your spending, use online banking like RCBC Digital where you can pay all your bills electronically using your deposit account (auto-debit) or your credit card (auto-charge). Tick off each bill on the list after you pay it off, and easily review it anytime right on the app itself.
With RCBC Digital, you can also transfer funds through InstaPay or Peso Net, and still keep track of your account movement through transaction history.
Having Too Much Credit Card Debt
It’s practical to have a few credit cards to ensure you have available credit when you need them the most. However, it can be very dangerous if you don’t know how to control your spending. Just one swipe and you can easily own that luxury purse or newly-released gadget which cost two times your monthly salary.
If you have too much credit card debt, it will be really hard for you to achieve your financial goals. Not only are you racking up high-interest debt, you also don’t have a lot of wiggle room in your budget because most, if not all, goes to paying off your credit card dues. That means not having anything to put into your savings, emergency, or retirement fund.
The chances of defaulting on your credit card payments are also high. And when you get behind on your payments, it can negatively affect your credit score, too. So as much as possible, manage your credit card usage. If you have an RCBC Bankard, track your spending using the RCBC Digital App. You can also make repayments easier by converting your big-ticket straight purchases to up to 36 months installment also through the RCBC Digital app.
And if you’re starting to feel the financial impact of paying off your credit card debts, reach out to your bank to request a repayment plan that’s easier on your pocket. For RCBC Bankard credit cardholders, you can do so by calling the hotline at +632 8888-1888 or by sending an email to [email protected].
Shopping Even When You Don’t Need To
Online shopping is fast and convenient. You can buy practically anything in just a few clicks or taps. However, this ease and convenience that online shopping provides has also given you the free rein to buy things you don’t even need.
Impulsive shopping and unnecessary purchases not only put a dent on your monthly budget. They’re a bad financial habit that will also make you run out of money fast. Say, for example, you spend a total of ₱10,000 each month on online shopping. That’s a whopping ₱120,000 for a year that could have gone to your savings, investments, or emergency fund.
Not Having Savings
Soon you’ll want to make a major purchase, like your own car, a new piece of furniture, or the latest model of a kitchen appliance. You need to have money saved up to purchase this outright or make a big deposit or down payment. Simply put, having no savings means not being able to afford important and major expenses.
If you have no savings, then your only option is to take out a loan or charge it to your credit card. Which is another way of acquiring more debts. It’s important to have savings to cover your short-term financial goals and prepare for your future.
To address this, open a separate bank account specifically for your savings. This way, you won’t run the risk of spending it when you’re on a tight budget or short on cash. You’ll also be able to monitor just how much you’ve saved.
With RCBC, you can open a savings account online in minutes with just one valid ID. While you’re at it, jumpstart your savings with a ₱500 cash gift from RCBC when you open an account during the promo period, which is until June 30, 2022.
Not Having an Emergency Fund
Much like savings, an emergency fund works as your financial cushion when the unexpected happens. But instead of dipping into your savings, you have a separate emergency fund that can cover expenses that you didn’t plan for.
Without an emergency fund, you can struggle financially for months, even for years. You’ll be in a situation where you have to choose which bills you’ll pay right now and which bills you’ll just pay next month. This isn’t an ideal situation to be in. So while an emergency hasn’t happened yet, do your best to save quickly and significantly.
Like your separate savings account, open a different account for your emergency fund. The goal is to easily put money into it and conveniently access it during an emergency (a legit emergency, that is!). RCBC makes opening different accounts easier for you because you can open one online with just one valid ID. Plus, there’s no maintaining balance, so you can have as many accounts as you want for all your savings goals.
Your Future Is in Your Hands
If you have these bad financial habits, it’s time to do something about it. The sooner you do, the sooner you can stop being financially vulnerable and secure your financial future.
Consider putting your money in RCBC Unit Investment Trust Funds which match your financial capacity, risk preferences, and financial goals. For as low as ₱5,000, you can start a UITF to grow your funds or boost your retirement fund. For example, the RCBC Rizal Peso Money Market Fund is an affordable investment that lets you enjoy higher yield potential. You can also easily access it online and redeem anytime.
Remember that getting rid of your bad financial habits won’t happen overnight, and you’ll need to make some serious sacrifices. You also need to be disciplined enough to achieve your financial goals one by one. But with the right banking partner, it’s possible.