The 10 Most Important Lessons to Learn in Personal Finance

May 9, 2017

Last update May 2017

Today's post is the updated version of a series I started in 2014 on The 10 Most Important Lessons to Learn in Personal Finance.

Financial literacy is a big problem in the Philippines. How I wish creating an effective budget, saving money for retirement, investing in stocks and making extra income were taught in school. Maybe, just maybe, we will all commit less money mistakes than what we commonly do today.

I am thankful that my interest in financial planning is something developed at an early age. Reading financial books and blogs is something I enjoy to do on my spare time. In return I was able to turn my financial mess to success.

From a spender to saver. From a happy-go-lucky individual to some who takes charge oTop 10 Most Important Lessons in Personal Financef her finances.

Exposing myself to the most important lessons to learn in personal finance proved to be worth it. And in this post I will reveal each to you.

Lesson #1. Live within your means

When I had my first job and started earning money on my own, I became very blind of my spending.

I juggle between my needs, wants and spend more than what I actually earn.

My lunch costed 150 pesos a day, I will have Starbucks coffee every other day and will go on a shopping spree without a budget.

Aaaaahhhh….the memories. I may have saved a lot of money today if only I learned to live within my means.

Living within your means doesn't mean limiting yourself. To live within your means is to make necessary adjustments in accordance to your real and current financial situation. This includes limiting your expenses based on how much you truly earn and maximizing your savings for the betterment of your financial situation.

  • Know Your Financial Net Worth. This is part of the most important lessons to learn in personal finance to serve as a clear guide on your financial status. Knowing how much you worth will lead you to decide better on where and what you will spend your hard-earned money will be.
  • Have a Spending Plan. Create a weekly, monthly and yearly budget to easily trace where your money goes. Keep track on your expenses and research for a budgeting technique that will work for you.
  • Become a Smart Shopper. I have this post 5 Steps to become a Smart Shopper and Deal With Your Shopaholic Syndrome that you might want to read for you to understand better how to become wise when it comes to shopping.
  • Always Pay in Cash. Debts are like sinkholes and the primary reason why people get in debt is because of credit cards. Allow yourself to pay in cash for small or big purchases so you know exactly how much you money you still have.
  • Don't try hard to impress the people around you. Remember that your life is different from them. Always go by the road of your own.
  • Cut Down on Expenses you Can Control. If you really want to live within your means then you have to sacrifice your wants in order to fulfill your needs.
  • Increase your Income. Either apply for a better paying job or do freelance work in order for you to adjust accordingly to your spending plan.

READ NEXT | 4 Useful Ways to Live Below Within Means from Kyle

Lesson #2. Pay yourself first

One thing you can today that your future self will thank you for big-time is saving. Pay yourself first no matter what.

Right after you receive your pay check, SAVE a portion and leave it in your payroll account or dedicated savings account.

Imagine if you save 500pesos every paycheck it will be 1,000pesos a month or 120,000pesos in 10 years. That's for saving just a tiny portion of your income. How much more if you religiously save 2,000pesos, 3000pesos and even 5,000pesos a month?!

Make it part of your habit to save automatically. This will make you better in managing your finances.

Step 1. Choose an account separate from your payroll to automatically save I explained this technique further in my post The One Thing You Can Do Today To Start Saving Money.  You may choose to open BPI Direct Save Up Plus Insurance or just a common savings account. The deal is that it has to be separate from your payroll account.
Step 2. Determine how much you would like to save each pay day/month and how frequent you will be saving. Try to asses how much your income is and how much you can commit for your savings fund. For me its 1000pesos a month and a goal of top up every year.


Step 3. Do it Automatically. Apply for e-banking to easily save automatically. the saving automatically. Talk to your bank on how you can automatically transfer x amount of pesos to your separate bank account every x number of days. I did this before I closed my BPI Direct Save Up Plus Insurance and it is certainly helpful.


[NOTE. Save a portion of your income automatically! I regret overspending during my first year of working. If only I saved as soon as my first paycheck arrived, I will surely have a better financial status today. So my important advice is to follow the golden formula of Income – Savings = Expenses.]

READ NEXT | 40 Financial Habits For Life You Really Need to Know

Lesson #3. Expand your financial knowledge

We live in a generation wherein everything can be done with the click of our fingers. It is way easier and faster to learn variety of knowledge especially in learning the most important lessons to learn

Vinyl Backdrops No Wrinkle Photography Backdrops (backdrop roll)

Some of my personal finance books.

in personal finance.

The more you learn, the better you become. It is a tough journey attempting to be financially-free one day but its all worth it.

Where can you find financial knowledge for LESS???

Books. Visit the leading bookstore near you and go to business/investment section and find new and fresh ideas on how to manage your money. (Just be sure you only read books that are already open and ok public reading policy). Go to Lazada to find out the latest financial book you can purchase.

Blogs. Financial Bloggers have truly changed the financial literacy nowadays. If its not for other financial blogs I will never have this much information about money matters. Best thing is that those knowledge comes from a personal side so its easier to understand for you can relate.


Search Engines. Go to Google, Yahoo or Bing and find a lot of meaningful resources about finance.You may print, write on a piece of paper or memorize the results of your research.


Around you. Talk to your Mom (or Dad) or observe how she (he) manages your household needs and for sure you’ll learn a lot of tips and tricks. You don’t even have to pay a single centavo plus it will be an added bonding between the family.

READ NEXT | Financial Literacy: The Key To Growing Your Money Unknowingly!

Lesson #4. Every piso counts

You know what I love most about having alkansya? Its the sound of the coins when you shake it. It is just fulfilling to know that slowly your savings are getting bigger and heavier.

It made me realize how every piso counts! I saved almost 2,768 pesos from loose change! That can buy you new clothes, new makeup, a grocery for a week or additional stock investment!!!

Unleash the Power of Alkansiya.

When you have this sense of value to every piso that you earn you become better in spending it. You are aware of how many piso will cost you in buying that branded bag or that studded heels. You know that your piso today can be thousands later so why spend it in not that needed items.

Owning an alkansya is a very good habit for it purposely give you motivations to save. I suggest saving only coins such as loose change through it. Bigger money should be saved in bank so that it earns interest. If you have enough savings already then its time for you to try investing to stock, mutual funds or even your own business.

Sabi nga di ba, lahat naman nagsimula sa piso! Stop the Piso lang Naman mentality and start saying Piso Din Yan! This way you won't let go easily in your impulse buying!

READ NEXT | 6 Top Reasons Why Pinoys Find It Difficult to Save Money from John

Lesson #5. Set Financial Goals

I've been a big fan of creating goals since the beginning. Goals work like motivational tools to keep you inspired having a reason to commit and hold on to something. Gives you a better outlook to your ambition and creates alignment to each and every  aspect of your life.

To answer you financial worries today make sure to set S.M.A.R.T. Financial Goals.

S for Specific, M for Measurable, A for Attainable, R for Relevant and T for Time-bound. 

    • Specific – What are your goals in the next 3, 5 to 10 years? Are they specific and clear enough for you?


    • Measurable – What are the key indicators that you succeed in your goal? How will you track your progress?


    • Attainable – Are your goals doable given the current situation and the resources you have?


    • Relevant – Why do you want to pursue that goal? What is your why?


    • Time-Bound – What's your deadline/time frame in reaching your goal?


READ NEXT | My Personal and Financial Goals for 2017

Lesson #6. Invest Early, Invest Now!

Stumbling upon the blogs of PinasforGOOD, The Wise Living and Frugal Honey, gave me the courage and the knowledge to take action on my finances. Thanks to them I learned one of the most important lessons to learn in personal finance that is to Invest Early.

Your money will never grow unless you put it on investment vehicles. Investing your money activates COMPOUND INTEREST, two words in personal finance that will make you rich! Compound Interest is basically an interest over the initial interest. This means the earlier you invest, the bigger your money will be thanks to compound interest.

For beginners I suggest investing in managed funds first like Mutual Fund, UITF and ETFs. These investment products lets you take advantage with compound interest without much hassle. Once you are confident enough to invest directly in stocks then find an online broker to get started.

READ NEXT | Stock Investing 101 | The Frequently Asked Questions

Lesson #7. Diversify

As much as possible, diversify your investments.

Diversification is a financial technique that reduce the risk factor of investing by allocating your investments on different financial vehicles, industries, institutions or other varied categories.

The aim of diversification is to help an investor maximize the return by investing in different areas that could possibly react differently to the changing movement of the economy. Although it never guarantees that loss will be diminished, diversification will surely minimize this sad effect on your investments on a long run.

You can easily diversify with your investments. If this will be your first time to invest then I highly suggest reading, How to Worry-Free Invest in the Philippines.

Diversify among different financial vehicles, assets such as bonds and stocks and market values. Do not just put your money on a typical savings account. Instead aim high and diversify your investment on different instruments such as mutual funds, stock market and even a real-estate property.

Look at Henry Sy. He opened Shoe Market as the leading mall in the Philippines but he didn't stop there. He established the SM Group with real estate, bank and now even a school, National University. The man surely knows how to diversify.

READ NEXT | More Proven Ways You Can Diversify Your Income

                             best personal finance tips and must reads all about paluwagan


Lesson #8. Plan

One thing that differentiates a successful person to an unsuccessful one, is having a PLAN.

Financial Planning can be called as one of the most important lessons to learn in personal finance for it promotes strong foundation. It is the act of having a strategy and a solid road map on how you can move forward.

  • Plan first before resigning to your current job. Have a plan b and even plan c before you say goodbye to your job for you may never know how hard it is to get a job this days. Read my post, Reasons I Quit My Job for solid realizations that you might ponder.
  • Plan your day ahead. Time and Money correlates a lot. I realize that when I wake up late, I have a hard time commuting to work thus I am forced to take a cab. My budget is ruined and my productivity level is distracted.
  • Plan the bank where you’ll park your money. Open a savings account in a bank you can trust in a long term.
  • Plan your investments. Never invest in what you don’t know. Investing is too risky more so for first timers so realize the importance of researching the pros and cons of everything. CLICK HERE: How I opened my FAMI-SALEF with Pictures.
  • Plan before you make any big financial decisions in life. What you do today will affect your future. If you choose to spend rather than to save today then be ready to live the consequences once you retire. If you choose to invest without any proper knowledge then you might find it very hard to maintain in long term.

Clear out your goals and reassess your current status so that your financial disposition is for the win.

READ NEXT | Reader Question : How to Avail a St. Peter Life Plan?

Lesson #9. Splurge intelligently

Once in awhile, we are entitled to splurge. This is not to let our finances suffer but rather to motivate us in achieving our financial goals.

  • Splurge on things that appreciates in value. Splurge in real estates and/or jewelries that will have a higher amount of value after. You may also try branded items for they still have competitive market value even after some years.
  • Splurge on moments that could lead to precious memories. Invest not just your money but your time on people you value. Be present at times when you are needed and try to  stay closer to your family, relatives, friends and others that are close to you. Remember the saying, "No one is an Island".
  • Splurge in your health. I remember watching a Youtube video about the behind the scene in YG Family Concert where Sandara Park belongs to (part of 2NE1). On the said video, members Sandara and CL will drink their vitamins and use inhaler first before going to the crowd. CL even shared how much important their health is for them.
  • I feel reminded on how important it is to be healthy. My dad always reminds me to be extra cautious when it comes to our health and say if and then we feel something wrong because once we get older for sure things will manifest more and it might be harder to heal. Remember health is wealth.
  • Splurge on your tools. If you are a blogger you need to find tolls such as laptop, USB, external hard drive and even camera in order to completely do your thing. If you settle for equipment that doesn't add value on what you do then you will surely loose your productivity not to mention how you will find yourself spending more money than what you should have done. 
  • Splurge on your passion. What's that one thing you are passionate about? My theme for 2017 is to hustle. I want to do more of the things that I love and those that makes me happy. Find out what your passion is and splurge you time pursuing it.

READ NEXT | 7 Ways You Can Invest in Yourself

Lesson #10. Learn to Give Back

Learn to Give Back. No matter what your financial status in life is, you have to be able to give back.

Whether you donate, you spend time, you help and/or you verbally announced your appreciation to the person, you need to give back by becoming a blessing to others.

But giving back doesn't mean opening yourself to anyone for anything. There's a certain limitation on how a person must financially give back.

Give back what you can. Give back what you afford. Give back what you verified as your overflow/excess.Click To Tweet


The idea of volunteerism will enable you to experience humility. New experiences is equals to new learning that could later be used for your betterment. You can also create networks through volunteering that can be very beneficial in your life.

Share your talent

Whatever God-given talent you have whether its in dancing, singing, acting or playing an instrument, you may want to give back by sharing it to the people around you. If you let that talent stay hidden, you might regret in a long run how you have wasted an entire life for nothing. You can even earn from your talent just like what I shared in How to Earn Extra Income in the Philippines.


It's written in the Bible that we must reserve 10% of our earnings to the Kingdom of the Lord. But it doesn't matter how much as long as it is from the heart. Remember that you are not saved by your good works but the grace of God. You may be able to feed thousands of orphan, create scholars and build church for your locality but if you are doing these things to show off then there's something wrong. Tithing is our own way of showing our appreciation to God's grace, love and blessings. You tithe through your time, your character, your principle in life and on what you own.

READ NEXT | Here's My Financial Bucket List, What's Yours?

Final Notes from SavingsPinay

This post on The 10 Most Important Lessons To Learn in Personal Finance is very close to my heart. This is a compilation of some of the best lesson I've learned through out the years that I've been blogging on the personal finance niche. Take control of your finances. Learn how you can budget, save, invest and make extra income as early as possible. I hope this post helps you.

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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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