"Ma, naa nako'y 1 million!", I'd jokingly tell Ma that I already have over a million in assets during a random conversation at home. Little did she know that I wasn't joking.
When I dreamed of saving a million all by myself before I turn 30, without a doubt I knew that this day would come but I never thought it'd come sooner than planned. I hate to say this but I am turning 29 this August. This article was due last year but I had to gather all the confidence there is to write this, much so let the word get out in the world.
In the Philippines, personal finance is rarely talked about in the open. People don't usually talk about their salaries and how they manage their finances month in, month out. But I am that one person who wants to talk about personal finance so much that in random conversations with workmates and friends, I always find myself giving unsolicited financial advice. I just can't help it. 😂 I dream of a world where talking about personal finance doesn't intimidate people and doesn't inflict fear but rather sparks change and moves individuals to act. A step towards that dream is writing more about personal finance.
I've shared some tips in my Financial Fridays series in 2021 but I'm scraping it altogether. This time I don't want to be limited to posting on Fridays only; it's also my first time using the LeoFinance front end. I've been using PeakD for almost two years now.
There is no one fool-proof answer to the question "What does it take to be a millionaire?". Surely, there are various routes to get to this goal. But today, I'll share with you the first step I took to have what I have now. Guess what? It doesn't require any outside force; as they say "It's all in your head!". What most don't realize is that successful personal finance isn't about money per se but how we think about money. It's our mindset towards money that will ultimately determine our success rate in managing our finances. That's exactly what we should focus on and fix first.
Here are some of the limiting money mindsets or beliefs that are prevalent in Philippine society that I had to grittily overcome to get to where I am now. The good news? You can, too!
I am a breadwinner, there's nothing left to save!
Let's start with the most famous line you'll hear from a young professional in the Philippines: I am a breadwinner, there's nothing left to save!
One of my life goals was to retire my parents. My parents are very old. Ma will turn 70 this year and Pa just turned 79 years old last month. Non-Filipinos might not get it but in the Philippines, our close family ties make it almost impossible to abandon our parents. When I started working, I started giving a portion of my salary to my parents and eventually, I was able to fully retire them.
I would be lying if I say I don't envy people whose parents have saved up for their own retirement but knowing where my family came from, and recalling every single hardship my parent went through to raise me and my 3 other siblings, it was natural for me to support them now. It's not like I was coerced to support every single need in the family. I know my parents did the best they could to raise us, educate us, and gave us a better future. Both of my parents didn't graduate from high school; Ma made it to 3rd grade and Pa to 6th grade. Long before the term gig economy became a thing, they were already submerged in multiple gigs mostly selling stuff just to feed the four of us. To date, I give 1/3 of my monthly salary to fund all expenses in our house. And by all, I mean all: utilities, groceries, medicine, etc.
But despite my love and respect for what my parents did for us, I had to acknowledge that I have my own life and that I'll soon have a family life of my own. In the Philippine setting, it's inevitable to help our families but the key is to set healthy boundaries. I always point out that it's okay to give, but it's not okay to give everything. It's okay to provide but not to the point there's nothing left for you and for your future.
In my case, I set boundaries by defining the exact amount I give to them every month. I am on a strict conscious monthly spending plan and I had to sit down with Ma to discuss the budget in the house. I give her the entire budget for a month once and she's in charge of making sure we don't overspend beyond that budget.
Perhaps, if I allowed this mindset to get the better of me, I'll never be able to save up that much money. But I knew I could do better than stick to this excuse. We can't go on with life as if we're walking ATMs for our families and even extended families. I know that each family is unique, but if your situation permits, always set aside something for yourself. You deserve it!
You have to earn big to start saving
Another hilarious limiting belief that I've heard from countless people I've encountered includes "I'll save when I get a salary increase!" & "I'll save when I get promoted." Simply put, saving is only possible when you earn bigger.
My money mindset was different. Fresh from college, I believed that despite my mortifyingly low salary, if I want to save, I could. And I did. My salary now is more than threefold my initial salary when I joined the workforce, but the increment in my salary wasn't the sole factor that paved the way for this feat. There was discipline, to begin with. Right off the bat, I knew that if I couldn't manage my money when it was still small, I'd end up struggling to manage it when it blows up one day.
It doesn't matter if you save less than 20% of your salary as prescribed, what matters is you cultivate the discipline of saving for the rainy days. Don't wait for your salary to increase before you practice saving. Start now!
You need to live poorly to save
To some extent, yes I did live poorly to save but later on, I was able to shift my mindset. In fact, if you've been checking out my posts on the chain, I've been all over the Philippines, gifting myself the much-deserved luxury of traveling at least twice every year outside of Cebu and going around Cebu every now and then in between the long, scheduled backpacking. I indulge myself in good food with friends and loved ones, too. I invest in my hobbies such as buying reliable shoes for running, buying art materials for my painting hobby and buying equipment for my cooking and baking hobby.
Saving up and building up your empire doesn't always mean letting go of all the good stuff in life. Our idea of rich life may vary. But one thing's necessary, you have to define what your rich life is and what you have to sacrifice to get there. My rich life is to be able to travel for days without asking a dime from anyone else and without crashing my entire financial empire.
Once you know what your rich life is, it's just a matter of redirecting where your money needs to go and understanding the importance of sticking to these redirections once set. In my case, I had to sacrifice some unnecessary purchases such as having more than 2-3 handbags at a time, more than 2-3 pairs of office shoes at a time, etc. I was fine buying a single pair of heels that'd last the next 12-24 months. I was fine eating lunch and dinner in carinderias most of the time. I was fine buying 80% of my clothes in thrift stores because my goal was clear: I want to be a millionaire and live richly.
Unless you can afford all the great things in life while stacking up your savings, you have to understand that life's about balance; you gain some, and you lose some. It's a matter of identifying what you're willing to lose to gain what you want and need.
You will only be a millionaire if you go out of the country
A handful of my friends are either working or living abroad. In my hometown, there's an undying belief that the only way out of poverty is to work outside of the country. I do believe this is the fast way out of poverty but it's not the only way out of poverty.
Even with huge salaries abroad, when OFWs come home to the Philippines, some end up where they started. Others may have bought a few pieces of real estate and sent their kids to school, but some still end up struggling financially. It is proof that money isn't everything; you can earn thousands of dollars but if you couldn't fix your money mindset, you'll always find yourself back in square one.
There's nothing wrong with wanting to work abroad to earn more but make sure you know how to manage your finances when you get there.
If you're poor, you'll eventually just die poor
We are poor and I'm not ashamed of this fact. But my parents were determined to get us out of poverty; they were determined that we wouldn't experience the same hardship as they did in their lifetime. I got my strong willpower from my parents.
To date, we still live humbly in our ancestral house. It's not really an ancestral house but our wooden house is too old that one more supertyphoon, it will reduce to nothing. Life hasn't been fancy but it's definitely better than the days gone by.
I think that with the right mindset, discipline, and grit, anything is possible. You can equip yourself with the right tools to make your life better.
I couldn't stress enough how important money mindset is in my road to being a millionaire. You are only as strong as your weakest link. Identify where you need to improve and in time, light will shine on that path towards success, whatever success means for you.
I am excited to share more about this journey but I'm afraid, we'll have to stop here. Hope this helps in any way! See you next time!
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