If you’ve lived in the Philippines for some time, you’ve probably noticed that, unlike Western countries, most families tend to stay together for years and years. It’s not uncommon for young adults with jobs, or even with families of their own, to continue living under their parents’ roof.
Strong family ties are a positive thing, but we all need to become truly financially independent at some point. Here are the key factors you should budget for as you take full control of your finances.
While some may think that the Philippines has a lower cost of living compared to more developed nations, that isn’t necessarily true. Especially when it comes to buying property; fact is, affordable housing is difficult to find. Property in the big cities, such as Metro Manila or Cebu, will definitely cost more. A pre-selling house and lot in the Philippines can be affordable if you expand your search to locations outside major cities. The same applies to rental costs. Rent may be cheaper than monthly housing loan payments, but you won’t end up owning the property in the long term, so weigh the pros and cons, and scout your locations extensively.
Being able to feed yourself (and your dependents, if any) is essential to achieving independence; and you should be prepared to set aside nearly half your budget for food. According to a 2018 report by the Philippine Statistics Authority, the average Filipino household allots 41.5% of their total monthly expenditure to food.
Sure, we Filipinos love to eat, but given the size of our food expenses, this is one area where trimming costs will make a significant impact. Try to buy weekly groceries in the early morning at a local wet market, and shift your diet towards vegetables and affordable protein such as bangus or tilapia.
Electricity, gas and water are the most important utilities for many Filipino households. Cooking with a gas cooktop tends to be much cheaper, while electricity is vital for keeping the house cool all year round in the country’s hot and humid climate. Other utilities you’ll probably have to factor into your budget are an internet connection, mobile phone service, and perhaps cable or satellite TV. Stick to what you really need, and use best practices such as staying together in one air-conditioned room during the summer, to keep costs down.
Making the daily trip to and from work, and doing the rounds of running errands and such, will be the biggest factor determining your transportation expenses. The location of your home and office is a key, and should factor into your choice of housing. If you can take out a car loan, the comfort and convenience of being able to get around in a reasonable time should be worth the cost; otherwise, look up the rates of common public transportation options, and work them into your budget.
Being independent also means you shouldn’t turn to others for financial assistance when something goes wrong. Having an emergency fund will let you pay for unplanned expenses. Medical issues not covered by or exceeding your company-provided health care, or unexpected maintenance on your computer, car, or home, should be paid for out of your emergency fund. Set aside a small amount every month and aim to have 3-6 months’ living expenses set aside in the long term.
For many Filipinos, the path towards attaining real financial independence is different compared to other parts of the world. Secure these aspects of your budget, and make sure that you can cover all expenses consistently each month, with a little to spare.