10 Ways on How We Can Save and Grow in the Philippines

December 1, 2024 | by HC Mutual

In a country like the Philippines, where financial literacy remains a challenge for many, learning how to save and grow your money is essential to achieving financial security and long-term prosperity. Whether you’re living in a bustling metro like Manila or a rural province, there are practical steps everyone can take to improve their financial situation.

Here are ten ways on how we can save and grow:

1. Create a budget

A solid budget is the foundation of good financial health. Start by tracking your income and expenses. Categorize your spending into needs and wants to identify areas where you can cut back. There are wallet apps that can help you manage your finances more effectively. Many households rely on cash-based transactions, so having a clear budget can prevent overspending.

2. Build an emergency fund

An emergency fund is a financial cushion for unexpected situations such as medical expenses or sudden job loss. Financial experts recommend saving at least three to six months’ worth of living expenses. In the Philippines, where natural disasters such as typhoons and earthquakes are common, having an emergency fund is particularly important to weather through tough times.

3. Start saving early

One of the best ways to grow wealth is by starting early. Even small savings can compound over time. Set aside a portion of your income each month in a savings account or invest it in financial products. The earlier you begin, the more time your money has to grow. With inflation rates often higher than the interest rates offered by banks, it’s also essential to look for higher-yield savings options.

4. Invest in mutual funds or UITFs

For those who have the capacity to invest, mutual funds or Unit Investment Trust Funds (UITFs) are a great way to grow wealth without requiring a large initial investment. These pooled funds are managed by professionals and allow you to invest in a diversified portfolio of stocks, bonds, and other assets. In the Philippines, various banks offer UITFs with relatively low initial investment amounts, making them accessible to the average Filipino.

Save for what matters.

Start saving for as low as PHP 101 per payday.

Flexible savings plan of 3, 5, or 7 years.

3% earnings from your savings per annum.

Be prepared for financial emergencies.

Start saving for as low as PHP 1,212, PHP 2,424, or PHP 3,636 per payday.

Fixed 5-year savings plan.

5% per annum after 5 years upon completion of the plan.

5. Consider the stock market

Investing in the Philippine Stock Exchange (PSE) can be a rewarding long-term strategy for building wealth. While the stock market can be volatile, consistent investing in stable, blue-chip stocks or Exchange Traded Funds (ETFs) can yield significant returns over time. If you’re new to investing, consider taking online courses or consulting a financial advisor to better understand market dynamics.

6. Practice frugality and smart spending

Living within your means is a key principle of saving. In a country like the Philippines, where inflation is often a concern, it’s important to be mindful of how much you spend. Shop smart by buying in bulk, using discounts, and comparing prices before making purchases. Cooking at home instead of dining out, and minimizing unnecessary expenses, can significantly free up resources for saving or investing.

7. Utilize government-backed savings programs

The Philippine government offers several programs to help citizens save and grow their money. One of the most popular is the Pag-IBIG Fund, which provides savings programs and affordable housing loans. The Social Security System (SSS) also offers voluntary contributions that not only provide retirement benefits but also act as a savings plan for the future. Take advantage of these programs to ensure financial security in later years.

8. Diversify your income streams

Relying on a single income source can be risky, especially with the economic uncertainties that many Filipinos face. Consider diversifying your income by starting a small business, working part-time, or exploring online freelance opportunities. E-commerce, online tutoring, or content creation are just some of the ways Filipinos are increasing their income. Multiple income streams allow you to save and invest more.

9. Take advantage of technology

In today’s digital age, technology has made managing finances easier than ever. Mobile banking apps offer convenient ways to save, send money, and even invest in stocks or mutual funds. These apps often provide features like bill payment reminders and budgeting tools, making it easier for you to track your finances and make smarter financial decisions.

10. Keep learning about personal finance

Financial literacy is an ongoing journey. Whether it’s reading books, listening to podcasts, or attending webinars, continuous learning can help you make better decisions with your money. In the Philippines, there are numerous free resources online, as well as local seminars that teach financial literacy. Educating yourself on topics such as budgeting, investing, and tax planning is crucial to achieving financial freedom.

Saving and growing your money requires discipline, patience, and a long-term mindset. In the Philippines, where economic challenges persist, taking small, consistent steps to improve your financial situation can make a significant difference. By budgeting, saving early, investing wisely, and continuously learning, you can set yourself on the path to financial security and wealth-building for the future.