Money plays a central role in our lives, yet many people enter adulthood without learning the basics of managing it well. This often leads to missed savings, poor investment choices, and unmanageable debt, all stemming from simple financial habits that weren’t developed early on. That’s why picking up key financial lessons early can be beneficial, as it can help one avoid debt traps, make smarter decisions, and build long-term stability.
Hence, the earlier you start building those financial habits, the more time you'll have to grow your money, and build lasting financial security. As the country’s leading digital bank, Maya is deeply committed to helping Filipinos become more financially savvy. Therefore, we’ve put together some essential financial lessons that can help you build healthier money habits and make smarter financial decisions down the road.
1. Live Below Your Means, Not Just Within Them
It’s easy to think you’re doing fine as long as you’re not spending more than you earn. But if you’re used to spending nearly everything you make, you may continue that habit as your income increases, leading to lifestyle inflation, where your expenses rise along with your earnings and prevent meaningful financial progress.
The smarter move is to live below your means, meaning that you spend much less than what you bring in. It might require making simpler choices now, but it gives you more financial freedom in the long run. You’ll experience less stress, fewer debts, and more opportunities to grow your money.
2. Understand the Difference Between Good and Bad Debt
Not all debt is bad. Good debt, such as business loans, housing loans, or educational loans, can help you grow your income or acquire valuable assets. Bad debt, however, is money borrowed for depreciating items or unnecessary purchases, especially if tied to high interest rates. It’s important to know the difference early on to ensure the money you borrow works for you, not against you.
Take credit cards, for instance. When used responsibly, they can be helpful in managing your cash flow, building credit history, and even earning rewards. For those just starting out, choosing the best credit card in the Philippines for starters often means finding one with low fees and manageable terms. Fortunately, there are plenty of no-annual-fee credit cards in the Philippines, which means you won’t have to worry about extra charges piling up on top of your purchases.
However, not everyone may be approved for a credit card, especially without a strong credit history or regular income. This is where alternatives like Maya Easy Credit come in. - With just a few taps in the Maya app and no documents needed, you can gain access to up to PHP 30,000, payable within 30 days, with no interest– only a service fee as low as 3.99% on the amount you borrowed. These funds can be put to good use, whether it’s for launching a small online business or investing in a short course to boost your skills and increase your earning potential. By using borrowed money for productive expenses, you can avoid falling into bad debt and instead set yourself up for financial growth.
3. Build and Maintain an Emergency Fund
Life can be unpredictable, and being unprepared for emergencies can lead to serious financial setbacks. That’s why having an emergency fund is crucial. It’s money set aside specifically for life’s “what ifs.” A good rule of thumb is to save enough to cover at least three to six months’ worth of your basic expenses. Even if you can’t put away a large amount each paycheck, contributing small amounts consistently can still help build your emergency fund over time.
In times of emergencies, it can also be helpful to rely on a flexible credit line that’s easy to access and comes with low service fees. Maya Easy Credit, for example, can serve as a financial cushion when your emergency fund isn’t quite enough. When paired with a solid emergency fund, it offers even more financial security to help you handle life’s surprises.
4. Track Your Expenses and Create a Realistic Budget
If you’re not tracking where your money goes, it’s easy to overspend without even realizing it. While some people see budgeting as restrictive, it actually gives you the freedom to spend on what truly matters while staying aligned with your financial goals. By using budgeting apps, expense trackers, or even just a simple spreadsheet, you can easily stay on top of your finances and make more informed spending decisions.
Additionally, monitoring your expenses provides valuable insights into your spending habits, helping you pinpoint areas where you can cut back. For example, if you notice you’re spending a lot on food takeouts, it could be a sign to cook at home more often and save money in the process.
5. Don’t Rely Solely on One Source of Income
Relying solely on one source of income can be risky, especially these days when layoffs or pay cuts can happen at any time. Having a side hustle or an additional income stream can make your finances more stable and give you more freedom to explore opportunities, whether it’s saving, investing, or pursuing personal goals.
In the meantime, a credit line like Maya Easy Credit can help you bridge day-to-day expenses while you're still working on growing other income streams. This accessible line of credit gives you the flexibility to cover the essentials of daily life, all without throwing your budget off balance.
6. Take Advantage of Compounding Early
Compounding is one of the most powerful tools for building wealth. It’s when your money earns interest, and whatever earned is reinvested, allowing the funds to grow at an accelerating rate over time. The earlier you start investing, the more time your money has to grow. You don’t even need to start with a large amount—just begin early and stay consistent.
Learning how to make your money work for you is a smart financial strategy to adopt early on. By investing and letting compounding do the heavy lifting, your money will grow even when you're not actively working for it. This shift from simply earning money to also growing it helps lay the foundation for long-term financial freedom.
Financial success doesn’t happen overnight. It’s built through small, consistent steps and smart decisions made over time. The earlier you start learning and applying these lessons, the better prepared you’ll be to navigate both life’s challenges and opportunities. Whether you're just starting your financial journey or looking to improve your money habits, what matters most is taking action today to secure a better future.
