In a survey conducted by Social Weather Stations (SWS) in partnership with Sun Life of Canada Philippines, 9 out of 10 Filipinos feel kapos, or financially short, in the last 12 months. Household needs like rent, along with school fees, medical bills, and loan payments, are among the reasons Filipinos blame their financial constraint on, the survey revealed.
Owning a home can easily turn a huge chunk of the money to set aside for rent into a worthwhile investment. Although there are developers who offer cheap, in-house payment schemes that will allow you to buy a home and spread the downpayment out in installments, putting down a downpayment is ideal because:
- you get mortgage options that are favorable to your pocket down the road;
- you pay for smaller amortizations;
- you get to avail of lower interest rates;
- you can build instant home equity.
But when you have a ridiculous spending habit, saving money makes it more difficult, and much more when you are trying to have extra cash to buy your dream home.
On the other hand, here are 7 sly ways overspenders do to save money for a home downpayment:
1. Have you ever heard of Automatic Transfers?
Several banks saw the opportunity to introduce a feature that allows depositors to transfer an X amount of money from their payroll accounts to a separate one for savings. This way, you’d be forced to budget whatever’s left of your take-home pay on expenses and things. Isn’t it cool?
2. Hug more, bust a move, do karaoke, or anything that increases the “love hormone.”
Yes, you read it right. According to another study, oxytocin, or the “love hormone,” helps people delay gratification. Gratification is identified as the main culprit on why people overspend. By doing things that increases your oxytocin levels, our minds naturally helps us put aside money for downpayment.
3. Use public transportation or carpool.
Although traffic is a bit bearable unlike during the holidays last year, taking public transportation or carpooling is much more cheaper than using a private car. These alternatives save you gas and parking money and can be put towards essential expenses like insurance.
4. Maximize the use of public spaces for me/family/friends time.
“Family time” does not mean paying 300 pesos an hour for your kid to enjoy the jungle gym. Nor spending a very expensive latte every time you need to meet with your friends. Metro Manila has lots of attractions that are either free or more affordable than a movie date or a shopping spree.
5. Hide your credit card/atm savings card in the freezer.
In the film adaptation of the book “Confessions of a Shopaholic,” Isla Fisher’s character hard a hard time cracking open the big ice cube inside her freezer that contained her last working credit card. For those who need to curb their credit card spending but have to keep them for emergency purposes, you can reduce the card’s spending limit, hand them temporarily to a loved one who has more spending control, or as delete card information stored online in your favorite ecommerce stores.
6. Hang out with family (or friends) who knows your mission.
If there is one thing you can count on to help you with your savings goal, it would be family, or close friends who sympathize with you. Of course, you’re going to notice how they’d change the subject when the words “shopping mall,” “sale,” or “bargain” would come up. But they’re really great by serving as your conscience when you feel the need to buy a pair of shoes that’s on sale, or your impenetrable deposit box for your savings passbook/ATM/credit cards.
7. Leave your money to the experts
Contrary to public perception, putting your money in the hands of financial experts is a great way to save and make your savings grow. You could put, or invest, as small as P5,000 in a well-managed mutual fund, let it earn interest in a time deposit.
But whatever financial investment you decide to put your money on, it is still important to at least be conscious about these questions:
- How long do I need to invest?;
- How much risk can you afford?, and;
- How much money should you invest?
If you like financial advice about this matter before putting your savings in it, it wouldn’t hurt asking your bank. Since most of the banks now offer investment vehicles, it makes sense to consult with them about financial instruments, even those that they do not offer.
What was the most craziest thing you do to save money? Share your savings habit by leaving a comment below.
