Earnest Stories highlights the money and investing experiences of experts, individual investors, and non-investors alike.
You really want that new phone, but you have just enough to pay off bills. You know you should save, but going on vacation with friends sounds so much better with summer around the corner.
This push and pull between needs and wants – or between enjoying life today and saving for the future – is a dilemma people face daily.
Read on as working professionals share how they navigate this challenge.
How do you balance treating yourself now and preparing for the future?
Planning her budget far in advance is how Jenni, a researcher, fulfills both her short-term expenses and long-term goals.
"At the start of the year, I really budget na my entire year. I start with thinking about, 'what’s the amount I want for this goal?' So from there, I set aside [money] already. Kahit wala pa sya sa account ko."
After setting aside money for goals, Jenni allocates a certain amount for her monthly budget.
“Then the rest, I can spend for luxury or whatever it is na hindi necessarily budgeted for, but you know, just making room for those impulsive wants," she added.
Elli, a bank employee, believes she can reward herself while staying responsible. "I make sure na hindi ko nakukuha yun from the funds that I allocate for my savings, investments, and other more important stuff."
For Mark, a service designer, it’s ideal to wait until there’s extra money like a bonus before treating yourself. "Usually, hinihintay ko talaga yung bonus. Kasi ‘pag normal sweldo, for me, basically [it’s] more of for bills and savings."
Meanwhile, Martin, an account manager, practices delayed gratification to stay disciplined with money.
"The pleasures that life has to offer now, it will still be there pa naman in the future. But the needs, when the time comes na kailangan mo syang bayaran, dapat mababayaran mo sya," he noted.
When working on long-term money goals, how do you address the fear of missing out (FOMO)?
Martin also believes financial discipline doesn’t have to mean depriving yourself of life’s joys. "I try as much as possible, to not deprive myself. Because at the end of the day, we have to enjoy life din naman."
After saving and investing money for long-term needs, he makes sure to leave a little bit of money for short-term wants like going out with friends and family.
For Jenni, setting aside money for the future is 1 less thing she needs to worry about. Automated savings remove the barrier of having to choose whether to spend or save.
"When the money comes, I don’t even see it in my main account na – which is what I use for spending – because it’s already set aside automatically without me thinking about it," Jenni shared.
Have you ever splurged and regretted it? How did you handle the experience?
Impulse spending turned buyer’s remorse is an experience many relate to. Mark recalled a time when he regretted buying a new phone unplanned.
After a week, he realized his new phone was very similar to his old device and didn’t offer much improvement in features to justify the splurge.
From this experience, he developed a new technique for dealing with the urge to spend impulsively. “Kailangan mag-isip muna ako ng 7 days, kailangan isipan ko talaga ng matinding use case yung pagbibilhan ko.”
As a fan of video games, Elli is no stranger to the appeal of online deals and sales, especially when she gets tempted to buy through her hobby groups.
"There are times talaga na parang, 'bakit ko chineck out ‘to?' So, naging lesson learned sa akin ‘yun to ask myself, 'Do I really need it? Can I afford it? And will it be worth it?'"
She also now abides by the principle of, “If I can’t afford it in cash and in full, I probably can’t afford it yet.”
How do you draw the line between 'wants' and 'needs'?
The line between wants and needs isn’t always cleanly defined. You need transportation, but does it have to be your dream car? You need food, but is it necessary to eat out at restaurants on most days?
Elli uses a simple question to distinguish between needs and wants. "I ask myself, will this affect my well-being and my responsibilities? So, if yes, then it’s a need. Otherwise, it’s a want."
Before classifying a big purchase as a need, Mark thinks about its possible benefits and whether there are multiple uses that may justify the splurge.
"If it’s something that will help me earn money, I will consider it as a need," he said, citing a car as an example, which helps him and his family get to work faster.
For Martin, doing extensive research is important to know if a major purchase is actually a need.
"I try to balance the price with the performance. Kasi, 1 thing can be so expensive, pero it doesn’t perform [well], or parang, you’re just buying the brand."
"I won’t hesitate shelling out a bit more if the benefits really are worth it," he added.
When there’s a perceived "need" to buy a big-ticket item, Jenni gives herself time to think things through. "I would give it like months talaga if the amount is on the bigger side."
Jenni also noted the need for flexibility in a person’s money management journey.
"If you are 1 of those people still figuring out how to manage your money, where to put your money, whatever, I think the best way is to just try and do it, and then adjust after."
