How to be Financially Smart in your 20’s.


Nobody taught me why I should save or how I should save. It all came naturally to me, when I got my first paycheck, I just knew not to spend all of it. I went to the nearest bank opened up a savings account and put at least 20% of my salary there. It was not hard at first. Coming straight from college, I am used to just spending money for transportation and food enough to be full for a day. But as time goes by, you start paying  bills, opening a credit card, purchasing things you don’t necessarily need and thus saving becomes hard.

After almost 5 years of working, I am proud to say that I still have my savings and I still manage to buy things I want, travel to places I’d like to go, pay my bills, etc. So how did I do it? I am no expert on money matters, but I can say that I’m doing pretty good at it.

1. Pay off your debt

We all know how convenient it is to own a credit card. But are you really using it in the right way? It is easy to swipe your card when you don’t have cash with you, but it is a good practice to pay the same amount once you have the money. This will avoid the interest from accruing thus saving you from a larger debt.

My friends all warned me before I got my credit card: Pay the exact amount you spent or else it will accrue interest. I know what I have to do, but when I got my card, I max-ed it out 4 months of using it. Then I spent the rest of the months paying it off. I even took a loan just for it to be paid off. I just really have to learn my lesson the hard way.

So to you, do not even get a card or if you really need it, just make sure you pay it when you get your salary.

2. Budgeting and tracking works

Have you ever experienced getting all excited for pay day and then after a day or two, you wonder where all of your money went? It would be wise to keep a journal or a mobile app or even just a expense tracker in your laptop, just so you have an idea where all your hard-earned cash went. This would also help you assess where the big chunk of your money goes. Awareness is the key.

I never budget my money until I transferred to a company who pays once a month. That needs serious budgeting or else I will crawl  going to the office mid-month. I learned how to allot money for transportation, for food (I now buy groceries! Instead of buying from fast food). I also track my expenses so I would know where my money goes at the end of the month. I then realized that a huge chunk of my salary goes to unnecessary expense. And from there, I consciously cut it down.

3.  Open a savings account

Where else will you be putting your savings? It is ideal to have a savings account so in time of emergency, you have a source of money instead of borrowing from people or getting a loan. It is also a good practice to have a separate account so you will not be tempted to withdraw your money for impulsive shopping.

Mine was with BPI, it was a Save-Up account wherein every month it automatically deducts a certain amount of money on a specific day. The catch is in order to withdraw the money from Save-Up, you have to transfer it back to your ATM, which makes it pretty hassle. That means you’ll be lazy enough to transfer it back thus helping you avoid withdrawing your savings. There are a lot of savings programs out there, you just have to find what suits yours.

4. Purchase a life insurance.

Nowadays, smart people no longer just keep their money on the bank. We are more risky now when it comes to money. As one of the Economics concept states, “the higher the risk, the higher the return”. There are a lot of venue where you can invest your money, be it in an insurance program or in the stock market. You might need to consult a financial advisor for guidance on these matters.

This is probably the best decision I’ve made in my 20’s. Gone are the days when life insurance means a benefit for your family when something happens to you. Now, Insurance companies also provide living benefits to the policy holders — that means investment that accrue over time. While my Save Up account is helpful for emergency purposes or when I need cash immediately, this investment on my life insurance is for long term savings. I am planning to save this until my retirement. So one day, when I am done working my ass off, I can just wander off the world.

5. Save for your hobbies.

Hobbies can be expensive. You may be collecting toys or travelling the world. It is a good practice to save a portion of your salary for these things. Say, set aside 1000 – 2000 every month, that would give you 12000 – 24000 at the end of the year, so if you are planning to travel the following year, it wouldn’t hurt your pocket to pay for the airfare or accommodation anymore. You already saved up for it. It wouldn’t mess with your budget at all.

One thing I learned is to set aside money for your interest. Some people have expensive collections or hobbies and it would really hurt your wallet to spend your savings on something unexpected: say a newly-released toy for your collection or a seat sale to a country you’ve been wanting to visit. So my tip is to save for it. I opened up another account and call it my Travel Funds. So whenever I will travel I won’t use up my savings account or my budget for the month. I try to set aside at least Php1000 a month. I would also like to set aside for books, since I noticed a huge portion of my money are spent for books!

6. Shop carefully and resist temptation.

When we have a lot of cash on hand, we easily get tempted to buy things that we don’t really need. It would be best that prior to going to the mall, you already have a list of what you have to buy. This will save you from buying things impulsively. Of course, it is perfectly fine to spend on clothes and shoes for yourself once in a while. But not necessarily overspend your money on unimportant things that can wait, such as new gadgets. It is important to plan your purchase and make sure they are within your budget. This way, you will have enough cash for what you really need.

One thing I am guilty about is impulsive shopping. If possible, I will totally avoid window shopping because it usually ends up, if not always, with impulsive buying. It goes down to how you control your self and your spending habits. But one of the best practice to avoid impulsive buying is to list down what you need to buy. Also, I only keep enough cash to buy what I need or usually I don’t withdraw at all and just swipe my ATM card for payment, because the more money that I have on hand, the more I know I can spend. Because of this, I was told that I shop like a man. When I go to the mall, I know already where I have to go, and my shopping takes less than 30 minutes.  Time-efficient, plus I was able to avoid impulsive shopping.

7. Save even just a little

It may be keeping a piggy bank, where you toss aside your 5-peso or 10-peso coins. You won’t notice at the end of the year you have already saved Php 5000. It can also be that weekly savings challenge that you usually see at the start of the year wherein every week you have to allot 10, then 20, then 30 and it goes on until the 52nd week of the year. Little by little, you save a portion of your money and at the end of the year, you will realize you’ve had a lot already.

I joined the weekly savings challenge this year, and I admit it, it was pretty hard. Since you have to allot bigger and bigger portion per week. I stopped mid-year and the I continue again 3rd quarter of the year. I am saving for my tuition fee for Master Degree next year. I think this kind of challenge works if you have a savings goal in mind that you have to attain at a specific time. Recently, I found an article that is much like the weekly savings challenge, but easier. You can read it here.  I think I will try this in 2016! Try it too! 🙂

That’s all that I can share for now. I know 20’s are the years that you are supposed to enjoy and live life to the fullest, but it’s also a good time to start being responsible. You don’t want to wake up in your 30’s feeling broke.


For more advice on how to save, you can also contact me at


Andrea Javier

Financial Consultant

Dreiality Bites



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