Generation Y or millennials, born between 1981 and 1996, represent the largest adult demographic worldwide, totaling about 1.8 billion. In the Philippines, millennials also comprise the biggest generation at 24 million, as compared to just 17 million GenXrs, 13 million zoomers or GenZs, and 9 million boomers.
If you are millennial, you are between 28 to 43 years old today and at that sweet spot in your life—advancing in your career, experiencing salary growth, and moving towards or already enjoying financial stability.
However, while still considered as a young adult, you are at the “more responsibilities” stage: planning to settle down or already married, starting or raising a family, purchasing your first home or investing in additional properties. More responsibilities mean more stress—but not necessarily financial stress, if you save and spend wisely and temper your YOLO (you only live once) tendencies.
Here are seven simple tips to help you manage your money well so your future self will be happy and worry-free financially.
Self-care is about doing things that improve your physical, mental, and emotional health. Think of managing your money as self-care. Be more deliberate with your financial decisions. Today, you have the choice to build good financial habits, allocate funds to savings, and educate yourself on wise investments. Without a doubt, taking these steps, like eating healthy and exercising, will be good for your overall wellbeing.
Want to learn more about being financially savvy? Chinabank offers practical advice to help you manage your finances, borrow wisely, and grow and protect your wealth.
Manage your spending and saving with intention. Having a budget and sticking to it can help with that. Keeping track of your expenses uncovers your spending patterns and helps you take control of where your money goes. You can also create budget categories. Consider each peso as having a specific purpose. How much are you currently assigning to each purpose? You may already have a household budget for essential expenses like housing, food, and utilities. But what about a budget for your life goals: Asian or European vacation, dream wedding, own house or condo unit, comfortable retirement?
Need help with budgeting? Check out this article on how to save money and still have fun.
When making a decision, such as whether to splurge on a sale or invest the money, we tend to favor our immediate desires, often choosing the option that provides the most immediate benefit. Technology can override this bias. Use online or mobile banking to arrange automatic transfers from your payroll account to a separate savings account. Schedule these transfers to occur the day after your paycheck is deposited, ensuring you save a consistent amount regularly, without the temptation to spend the money elsewhere.
Automation also works for investments like UITF (Unit Investment Trust Fund). You can set up your account for regular contributions to the UITF of your choice. This method is convenient and provides you with the benefit of peso-cost averaging, an investment strategy that helps mitigate the effects of market fluctuations on an investment portfolio by distributing investments over a period.
Through Chinabank Online and Chinabank Mobile, setting-up automatic transfers is a breeze. You can also enroll in Systematic Investment Plan to automate your investments in Chinabank’s UITFs.
Credit cards offer convenience and can help in building credit scores. Credit cards also provide a safety net for emergencies, plus rewards and/or cash-backs, making them a good financial tool to have. However, responsible credit card ownership requires financial discipline. Charge only what you need and can afford to pay. Avoid late fees by paying your credit card bill on time. Do not max out your credit card or you will have a difficult time paying your balance and also damage your credit score. To achieve a good credit score, experts generally recommend keeping your credit utilization rate below 30% and maintaining a consistent payment history so you can get approved for goal-achieving credit—home, car, and business loans.
As you are still in the wealth accumulation stage, your goal should not necessarily be to eliminate all debt, but rather to avoid taking on any unwise or unnecessary debt. For guidance, you can read these articles on how to avoid credit mistakes and how to harness the power of credit.
Need some financial leeway? Apply for a Chinabank credit card that matches your lifestyle.
Chinabank also offers consumer loans and business loans at competitive interest rates and flexible payment terms.
From time to time, it’s ok to buy something on impulse to treat yourself after a long week or because a sale was too good to pass up. But don’t make it a habit. One way to keep yourself from unnecessary spending is to know your triggers. For example, don’t start shopping if you’re tired, feeling down, or mad at someone. You can also limit your time on social media and curate your feed, avoiding pages and sites that trigger your buying impulses. Another good way is to force yourself to sleep on it. Let the thoughtful part of your brain decide whether or not you actually need or want the item, or if you’re just feeling a certain way. Remember, retail therapy can result in overspending, which may lead to financial stress, negating the positive effect on your mood.
While not about controlling impulse spending, these articles on building your emergency fund and financial planning can make you think about using your money for something more important than a new gadget or a designer bag.
Received a windfall—bonus, salary bump, inheritance, lottery win? Instead of splurging and blowing it away, think about strategic ways to use the money. Investing in long-term assets, beefing up your emergency fund, or paying off high interest debt are wise options. Of course, you can use a portion of your windfall for immediate enjoyment (travel or buy stuff) but focus on long-term financial stability. Investing in diversified portfolios can provide substantial returns over time.
Want to know more about investing? Read this article on the best investment tips for beginners. Interested in specific investment instruments? Check out these articles on UITFs, bonds, and stocks. And if you are ready to invest, check out Chinabank’s investment offerings.
Online and social marketing platforms present numerous opportunities for fraudsters who use various persuasion techniques to target individuals. If you receive an unsolicited investment pitch for a company or investment, or notice it being praised online, but are unable to find up-to-date financial information from independent sources, pay them no mind. Also be cautious of claims that an investment will yield "incredible gains" or has "huge upside and almost no risk!" even going as far as claiming that extremely high returns are "guaranteed" and that the offer is a “once-in-a-lifetime opportunity”. Scammers create a vision of a wealthy future, complete with testimonials, likely fabricated, to lure you in. Such statements are often indicators of extreme risk or outright fraud. Do not fall for it. Take the necessary time to thoroughly investigate before committing any money. Keep in mind that if it sounds too good to be true, it is.
Trust only highly reputable companies like Chinabank. One of the top four private universal banks in the Philippines with a proven track record of financial stability, high governance standards, and ESG excellence, Chinabank offers a full range of financial products and services to help you achieve your financial goals. Visit a branch today and experience how Chinabank is focused on you.