Common Money Mistakes Pinoys Make and How to Fix Them

May 14, 2020

common-money-mistakes-pinoys-makeMoney mistakes are everywhere. I have my own share of shortcomings especially back when I was just beginning my journey to financial freedom.


You all know that I used to be an overspender. I live way above my means and will still need the financial support of my parents for my food and travel expenses to survive until the next paycheck comes.


Because I was in such a financial mess, reading and learning became my last resort. Through the years of hard work and learning the basics of personal finance I was able to fix my financial situation and overcome the said mistakes.


We are all vulnerable to commit money mistakes. What’s important is that we learn from them and declare never to commit the same mistake ever again.


Here in today’s post I enumerated the common money mistakes Pinoys make and how to fix them. If you are currently making any of the mistakes below I wish this post will push you to take action and resolve them.



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Mistake #1. Not creating your own financial plan


Not everyone knows the importance of creating a financial plan. Obviously, this has been one of the top common money mistakes Pinoys make.


Financial planning is the process of evaluating your current financial situation, determining your financial desires for the future and developing a plan to get you closer in achieving each specific goal you have.


This is a comprehensive process, I know. But, trust me a solid financial plan is everything you will need in achieving financial peace. To quote Sir Benjamin Franklin, “if you fail to plan, you are planning to fail.


Your financial plan should include the following:


1. Your net worth

2. Your financial goals

3. Your action plan

4. Your mid-year and yearly review


How To Fix This:

I highly suggest spending one afternoon in creating your own financial plan, especially the first three inclusions.


For your financial goals and action list, I recommend writing everything down instead of using a template. I am a big fan of creating lists and I can personally attest how powerful writing your goals and action plans could be.


I choose the month of August or September to do my Mid-Year Financial Review as this is the very month I create my goals before the current year ends, like an 18 before 2018.


There are selected few who have the money to hire a professional financial planner for this, but I firmly believe that the best financial planner you can have is yourself. Why?


Because you alone know how your finances really are. And you alone know how committed you are to take action.



Mistake #2. Not having a budget


A budget is a powerful tool used to plan how you’ll spend your money. It is important for every Juan to create a budget so you have a clear guide to follow on a monthly, weekly or daily basis. Budgeting your money can be overwhelming at first, but once you make it a habit you will find far more amazing benefits a budget can do to your financial life.


Here are three benefits of an effective budget:

1. Gives you better control over your finances

2. Makes you aware where your money goes

3. Helps you avoid unnecessary expenses

4. Provides an idea whether you are spending more on your needs vs. your wants.


How to Fix This:

No matter how busy you may be, try to still accomplish a budget before making any spending. This is important if your aim is to stop living from paycheck to paycheck.


You can use a simple Excel file for this or download my free 50-20-30 Budget Rule Template available in the Resource Library. Free financial apps are also available to help you record your expenses in an effortless manner. The Wallet App was introduced by a member of the SavingsPinay Community on Facebook and I do recommend the app for you to try as well.


Of course, the classic notebook and pen budgeting is something everyone can try too.



Related Links:

Budget 101 – The why and how of basic budgeting | Billy Joel Ramirez,

Tips for Single Mom – How To Budget and Save Money | The Asian Parent

The 50-20-30 Budget Rule | Izza Glino, SavingsPinay

Budgeting Your Money through the Envelope System | Fitz Villafuerte, Ready To Be Rich

Personal Budget for New Graduates |Mighty Rasing

My Five Hundred Peso Budget | Grace, Pinay Minimum Wager

Daily Money Log | Maria, Pinas for Good


Mistake #3. Not Building an Emergency Fund from the Start


Saving money should be part of your major priorities as soon as you get your first paycheck! Build your emergency fund from the start by automatically transferring 10-20% of your salary on a dedicated savings account. What is an emergency fund?


Emergency Fund works simply as a contingency money used primarily in emergency cases such as, but not limited to the following:

1. Sickness or sudden death in the family back home

2. Job loss

3. Your living facility is hit with natural disaster (Fire, hurricane, etc.)

4. Other common emergency situation


If something from any of the above happens, you have a buffer cash from your emergency fund to use. Hindi mo na kailangan mangutang. A good 3-6 months’ worth of your monthly expenses or your monthly salary should cover this fund!


How to Fix This:

You can resolve this one common money mistake of not having an emergency fund through automation. Select an amount you can spare in a month for your buffer account and the day in the month you can automatically save it. Make sure that you secure your savings first before any other expenses you will do.


A great post I want you to ponder about is Paula Pant of Afford Anythings’ Anti-Budget Rule. She suggests an alternative for those who find it hard to save money every month. The Anti-Budget Rule works this way – every payday removes 20% of your salary as your savings (This can be adjusted based on how much you can commit to save). Then you are free to do whatever you want for the rest.


In her own words:

  • Decide how much you want to save.
  • Pull this off the top.
  • Relax about the rest.


Because you already secured that 10% or 20% as savings you are pretty much okay to spend the rest. This money could work as your emergency fund!


Once you hit your target 3-6 months’ worth of your monthly expenses or your monthly salary, you can now use the automatic savings as investment! Open your own direct stock account or invest in a mutual fund!


You can also read my post on 11 Ways To Build an Emergency Fund from Scratch.



Mistake #4. Excessive Spending


Unnecessary purchases may harm your finances in the long run. Many Pinoys forget to prioritize their financial goals and frivolously spend on items that will only depreciate in value.


Madali din tayong madala sa kantiyaw and kwento ng iba that we end up helping too much when it comes to our friends and family member’s financial needs. Hindi masamang tumulong pero sana unahin mo muna magtabi para sa sarili mo.


Buying stuff you don’t need with money you don’t have a grave sin! You are putting your finances in danger with this common money mistake.


Last month, I shared the idea of a spending habits review to my email list. The response I got was mind-blowing. A lot find happiness spending for their family and friends on gifts, on treats and on special bonding moments just like me.


There are also a few who regret following the trend and wasting money on the newest gadget as soon as it is released, wishing they invested the money instead. Taking a good look on how you spend your money could make a huge difference!


Learning to control your spending is one of the best ways you can stop living from paycheck to paycheck.


How to Fix This:

The best tip I can give is learn to say no.


Say no to expensive items, say no to peer pressure. Learn to say no to yourself – when you find new shoes, new gadgets, new makeup, etc.


Learn to say no to people around you – when you really don’t have the money and the confidence that that person will pay you in time!


Instead of spending your income on stuff, I suggest prioritizing paying down your debt first (if you have any) and then slowly build your emergency fund right after. Once you have the suggested amount on your cash cushion ready you can now start investing in stocks or even pursuing your own side business idea!


When it comes to control, I find writing down a wishlist a good way for me to evaluate how much I want a certain product. If I really want to buy something I write it down first in my wishlist and wait for a month. If after a month and I still have the urge to buy that item – I buy it.


Here's my beauty wishlist for example.


Mistake #5. Forgetting Your Health

Don’t forget your health.


Minsan sa sobrang kagustuhan natin umunlad ay nakakagaligtaan na natin ang ating kalusugan.


We end up working 2-3 jobs a day and even extend our working hours. Not to mention the unhealthy eating habits we do just to cope with stress and pressure at work.


But forgetting the importance of being healthy is dangerous both for your finances and your life! Why?

  • Health facilities including medicines are too expensive!
  • There’s too much emotion and not to mention stress when someone in the family get sick.
  • No appearance at work can mean no pay if you don’t have any available leave anymore.


The real connection between health and wealth is this – both should go together.


If you are maintaining a healthy lifestyle to live longer, you should also maintain a healthy financial life to sustain that goal. And the only way you can earn enough money to spend, to save and to invest is if you remain well and healthy.


How to Fix This:

Health is truly wealth especially for those who are working. It is best to ensure that you eat healthier meals every single day. Try to include a short exercise in the morning or after work to help build your immune system. It is also best to go for a checkup as soon as you feel something wrong in your body.



Mistake #6. Investing Your Money Too Late


It is a common money mistake for Pinoys to prolong their investment plans thinking it could actually wait.


But if there’s one smart move you can do today that your future self will surely thank you for is to invest – now!


What’s the difference between saving and investing?


When you save, you are putting your money at rest. Whatever money you saved will not make you rich but it will be readily available in case you need it.


When you invest, you are putting your money at work. Whatever money you invested could give you a higher return compared to saving.


As early as now, let your money work for you and not against you by investing on the right vehicle!


Time is crucial when it comes to growing your money. You are never too young or too old to invest your money in stocks, mutual funds, ETF, bonds, etc.


Someone who invests P 25,000 by age 25, with a 10% rate of return, will have more than P 20 million during his retirement. This is constant even if he or she stops investing after age 35. Those who waited until age 35 will have three times less money than the return of investment of the one who started early!


Now if you are reading this and you think you’re too old to invest then please stop that nonsense. Just like the famous Chinese proverb, the best time to plant a tree is 20 years ago, the next best time is today.


It is still better to invest your money at 30 instead of 40, right? It is also better to start at 45 than at 60. It is never too late to start.


How to Fix This:

I know how intimidating the thought of investing your money could be. I’ve been in that situation before. I opened my mutual fund account at 19 years old without prior knowledge on how mutual funds work. But now looking back, I consider it as one of the best financial decisions I ever made. Today my mutual investment just keeps on growing and growing.


Mistake #7. Living on One Source of Income


Here’s what I firmly believe:


Everyone needs a hobby, a side hustle or a passion for profit project to do to be able to stay balanced.


Depending on just one source of income, like a typical 9-5 job, will make you insane. You will get bored, uninterested and stressed easily. Soon that one source of income, even though pays the bill, will make you unhappy.


No matter how comfortable your current job can be, I highly recommend pursuing your passion on the side.


Having additional income just opens better opportunities on your finances. Your extra income can:

  • Boost your savings
  • Increase your investments
  • Enough capital for a possible business venture or passion project
  • Pay off debt
  • Provide extra money for shopping, paying bills or vacation


How to Fix This:

1. Write down what you are passionate about. Is it taking photos? Writing online? Doing yours and others hair and makeup?

2. Find resources from the web to actual people who have pursued the same passion and learn how they did it.

3. Just do it. You don’t need technical skills to start a blog. You don’t need to think a lot on what side business idea to start. Here’s a list you start with. Just do it. Start doing what you really enjoy.


Mistake #8. Not Having a Retirement Plan


Another from the list of common money mistakes Pinoys make is not having a definite plan for retirement. There are Pinoys who retire from years of working without any savings at all. Their hard-earned money was used to pay-off more debt, more bills and more unnecessary spending.


Life is full of uncertainty so it's important to plan ahead and prepare your finances after your contract expires! If you dream to live your retirement age for good one day, then you should start saving money today! You need to find the best investment vehicle where you can park your money and earn better interest!


How to Fix This:


Consider dedicating time to set smart goals for you and your family. What is it you want to achieve before 2017 ends or in the next three to 5 years perhaps? Once you have identified your goals insert your next actions. Make sure that how you deal with your everyday finances is aligned to the goals you have set!


It is never too early to start planning on your retirement!


There are a few who criticized me when I decided to purchase my own life plan at St. Peter but I just shrugged them off. For me a life plan is an investment and having it now that I am still young and able to afford it is the best decision ever.


Final Notes from SavingsPinay


If you really want to see and notice changes in your finances then LET GO of the common money mistakes mentioned above! As always, if you want to be rich, change. Take a different course from your usual routine and make necessary adjustments every single day that will point you to prosperity.


Do you commit any of the money mistakes above too?


Clariza Glino

Izza of SavingsPinay helps Filipinos bridge the financial literacy gap one content at a time by providing insights and tips on budgeting, saving, investing, side hustle and growing your net worth. Aside from this blog she also writes at, a beauty and lifestyle blog for frugal Pinays and manages,, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at

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