No to #YOLO: How young adults can curb spending

Rose Carmelle Lacuata, ABS-CBN News

Posted at Jun 22 2016 08:17 AM

MANILA - One of the perks of being a young adult is having the capacity to earn your own money, and the purchasing power that comes with it.

However, this power comes with the responsibility of being accountable for your own future, and to ensure that the money you earn do not go to waste.

Yes, you only live once #YOLO, but how do you secure your future if you're spending mindlessly?

Speaking on ANC's "On the Money," Ryan de Vera, a registered financial planner, explained some common misconceptions that young adults have when it comes to spending money.

For De Vera, young adults tend to spend their money mindlessly because they want to feel accomplished.

"But then what's happening now is when they start earning money, they have a certain feeling of accomplishment, feeling of they are able to prove themselves so they want to spend so much already," he said, adding that this can lead to debt and not having enough savings. Spending money to be "kind" to oneself is also a misconception.

"Many people say, "I'm just being kind to myself." But what I'm saying is that, it's also a misconception. Being kind to yourself now may not do you so much good in the future," De Vera said.

According to De Vera, one should treat their money as they would play basketball, wherein they should also learn how to "defend" their money.

"You make money, you protect your money, and you grow that money," he said.

Young adults are mostly working for money, and for De Vera, it is important that create a certain limit for their spending.

"When you defend your money, you have to make sure that you create your certain budget. You have to create your certain limit," he said.

"When you protect your money, you have to make sure that the money that you earn is not more than the money that you spend," he added.

Using the jar system, or putting your money in different jars allocated for different purposes.

"The reason why people are making unnecessary expenses is because they want to reward themselves, and they want to feel a sense of gratification," De Vera said.

How to curb the urge to spend? Allocate a portion of your income and put it in your "rewards jar."

"I would recommend that you set aside as much as 10 percent only for your rewards jar, then spend that rewards jar within the next 30 to 90 days. That way, you will feel a sense of gratification," De Vera said.