This is Why Saving Up is Not Enough

Most Filipinos believe that saving up is enough to become financially free and stable. It's not and here's why.

There are two #financialgoals we want to achieve in life.

Financial freedom: having enough resources to live comfortably without worry.
Financial stability: getting constant income sources to cover your needs and wants.

We thought saving money was enough to achieve these goals, but it’s not. Here’s why:

1. Inflation: Saving up money in a bank account may seem like a good idea, pero bumababa ang halaga ng pera pag nagtagal dahil sa inflation (lalo na ngayon). This means that if you have ₱100,000 today in your savings, it would be worth less than ₱100,000 next year dahil sa pagtaas ng mga presyo.

2. Emergencies and unexpected expenses: Maraming pwedeng mangyari na biglaang kailangang gastusan: emergencies, repairs, or unexpected expenses. If you rely solely on your savings, paano na? You might not have enough funds to cover both your regular and emergency expenses.

3. Limited earning potential: Kapag maliit lang ang income, maliit lang din ang maiipon. It would take you a super, super long time to be able to save enough to achieve financial freedom and stability. There are other ways to make your money work for you, like investing and taking good debt, para palakihin pa lalo ang kita mo.

4. Passive returns: “May interes namang kinikita ang savings ko sa bangko a.” You know, saving up money in a bank account does not provide the opportunity for growth with barely less than 1% in interest rates. Imagine, yung 100,000 mo, pwedeng kumita lang ng 100 sa isang taon

There are safe investments you can take that can offer 2% to even 10% in returns. Of course, these also come with some risks. However, if you do your research and manage them correctly, the gains can be exponential.  

So what are some strategies for achieving financial freedom and stability?

1. Budgeting and cash flow: Stability comes from routine. At magandang routine ang nagpaplano ng budget. You can train yourself on how your funds should be divided and where they should go, so when you finally grow your income, you don’t lose your track towards financial freedom. Maiiwasan mong maging “one-day millionaire”.

2. Managing debt: Debt is an important part of achieving financial freedom and stability. Lahat ng negosyo, may utang dahil kailangan nilang lumago.

But the key here is learning how to manage your debt properly. Avoid late payments, especially on loans with high-interest rates. Make sure you only take loans for things that are important for your growth at hindi aabot na mas malaki na ang utang mo sa kakayahan mong magbayad mo. Kung magkaka-utang ka, make sure it’s for something that can also make you money in the future.

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3. Increasing earning potential: Sabi nga nila, you have to spend more to earn more. Increasing your earning potential through education, training, or starting a side business can help you earn more money and better manage your finances towards your financial goals.

Don’t get us wrong. Saving up is an important aspect of achieving financial freedom and stability.

But it is not enough on its own. It’s a limited approach, especially among Filipinos. Take smart steps to work towards living the life you want while there are opportunities available at your fingertips.

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