![]() Getting a large amount on their payday, for example, usually serves as a convenient excuse to spend on high-ticket items as a reward, which could have instead gone to one’s savings. When it comes to following a budget, Filipinos tend to declare proactive habits such as saving more, especially during the start of the year, and will eventually regress after some time. When it’s time to move out, they have unrealistic budget breakdowns or have developed bad spending habits making it more difficult for them to stick to a 50-30-20 budget.Īnother cultural aspect that affects how Filipinos save and budget is the common trait of being “ningas cogon”-it’s the attitude of doing well only during the beginning or the lack of sustained perseverance in whatever pursuit. ![]() What this cultural difference does is that, from a young adult age, Filipinos have mixed incomes and are not fully financially independent. However, in the Philippines, where family ties are highly valued, young adults are not expected to leave the nest until much later in life–and that’s assuming they leave at all. In the US, most people are expected to either leave their parents’ home by the age of 18 or start paying their parents rent. The second reason many Filipinos do not see the need for the 50-30-20 rule is cultural differences. So, you would have to reduce expenses on wants and savings, disrupting the 50-30-20 rule. If you were to live independently and have no other sources of income, P9,000 a month spent on rent, food, transportation, utilities, and other expenses is not enough. This means that P9,000 will go to needs, P5,400 will go to wants, and P3,600 will go to savings. Let’s say if you are a fresh graduate, you earn P18,000 monthly after deductions. First, the cost of living in the United States is different than in the Philippines, so the percentages may seem way off if you’re thinking about their needs and ability to save. There are two main reasons Filipinos are quick to dismiss the 50-30-20 rule. It’s a flexible budgeting option, so you can adjust the percentages as needed. The point of this budget plan is that you’re spending based on what you have, not on any other arbitrary measure like other budgeting plans. In this case, the best option is to decrease discretionary expenses, from 30% to maybe 15%. ![]() For example, if someone in the US has student loans or medical debt, their budget for living expenses and minimum bills and debt payment may be insufficient. This rule, of course, is not set in stone. Out of the 20%, ideally, at least 10% should go to savings, and debt payments for credit card and loans. 20% should go to savings and debt payments.30% should go to your discretionary expenses, which are not that essential to your survival, such as gym memberships, entertainment, unnecessary travel, designer clothing, etc.50% of your income should go to essential needs (mandatory/minimum bills payment, groceries, transportation, medicine, etc.).What is the 50-30-20 budget plan?Ĭoined by United States Senator and Harvard bankruptcy expert Elizabeth Warren, the 50-30-20 rule forces you to divide your spending on percentages. The 50-30-20 budget rule is not only applicable to Filipinos’ everyday lives, but also a good budget plan to practice for better savings. This is because the salaries and cost of living in this country vary from that of the United States. Some Filipinos may think that this form of budgeting isn’t feasible for the everyday person. After taxes, your income should be divided into: 50% on essential needs 30% on wants and 20% on paying off your debt or setting aside funds in case of an emergency. For those who don’t know, the 50-30-20 budget plan is an American concept that seeks to save money and budget your money smartly.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |