For the graduates of 2019, let’s hope they have landed jobs by this time and are cashing their first or second pay checks. Sadly, not all will be responsible about handling their money and there can be many reasons for this. But let’s lump them into three major groups.
The first group would have parents still willing to support them. They’re very lucky because they will continue to enjoy free rent (still living with family), get free meals (not expected to buy groceries), and do not have to worry about utilities (that covers electricity, internet connection, phone use and many more). For the youth that falls into this group, they have the luxury to spend their salary on themselves.
Members of the second group have circumstances that are nearly the exact opposite of the first. They are now expected to support their parents, and their siblings, and maybe members of extended family too including grandparents, aunts and uncles, even cousins. They will have to contribute towards paying the rent, providing meals plus utilities. Maybe even school expenses for younger family members.
For the third group, it’s a cross between the earlier two. They could have parents that are financially independent, but want them to learn responsibility so will be asked to cover some household expenses. They may even be asked to start saving and investing their money, and get guidance to do so. Or they could have parents that are not financially independent but are doing their best to stretch their modest income to cover expenses. In this case, their help will be welcome but they are not burdened with expectations to give up all their income towards the family pool.
Whether or not you are one of the 2019 graduates, it’s a fairly easy guess which group you would want to belong to. If you are part of the first group, you are welcome to continue reading but let me state here that I wrote this column for the members of the second and third groups who will be saddled with financial obligations for their families.
#1 Wear a Money Life Vest
When you ride an airplane, regardless of how near or how far your destination, the first thing the stewards do is demonstrate the use of an emergency life vest and oxygen masks. If you are traveling with children, they ask that you wear the life vest and the oxygen mask first before attending to your children.
Do you know why? Some parents struggle with understanding this and actually say they will put their children first in case of an emergency. But the practical reason is that you cannot help others if you are incapacitated. It is easier to lend a hand when you are not losing oxygen or drowning.
The same principle holds true with money. Now that you are earning, consider your salary as the life vest and oxygen mask. Finally, you can come up for air and not feel like you are drowning with money problems all the time. But to be of help to others, you need to wear that life vest or oxygen mask first and free yourself.
#2 Pay Yourself First
What does wearing a money life vest mean in practical terms? It means paying yourself first. Set a money goal for yourself – and you can choose to keep this to yourself for now. Let’s say you are earning P15,000 monthly. Compute for your daily expenses including transportation and meals and set that aside because you will need it.
From what’s left over, see if you can keep 10 percent (more is always better) monthly to build up your savings. Then the rest you can decide how to spend. Half for your parents? Or take on the responsibility of sending one of your siblings to school? Cover your grandparent’s medical expenses?
If your family has many needs, you may want to keep your savings goal to yourself for now. No one else needs to know that you are building an emergency fund – remember, it’s your money.
#3 Say No Nicely, But Mean It
Money can solve many problems, but they are usually short-term fixes. Like taking care of last night’s dinner. The electricity bill that is overdue today. A new pair of shoes because the heavy rains ruined your younger brother’s only pair.
Now that you have money, it can be tempting to step in and fix all these but you cannot say yes all the time because then you will have nothing left for your own future.
One way to manage this is to have a list of things you will help with, and things you will say no to. Say no when extended family members borrow money, and you can explain that your salary is too small to even help your own for now. Say no when your brother asks for a new phone (that’s a want) or your sister wants a new shirt (again, a want). Focus on family needs, and even then, you should not say yes to all the time.
It won’t be easy but if you start saying no now, the people around you will realize when they can come to you for help, and when not to.
#4 Say Yes by Helping in Creative Ways
Just because you said no to giving money does not mean you can no longer help. There are other ways to support your family and show that you care. If your parents are struggling to pay a debt, help them find a lower interest loan or connect them to foundations that can help them manage their finances better with aid and training. If your siblings want to go to school or stay in school, look for scholarships to assist them.
Take the time to explain that you are also just starting out and your salary is not enough for all the pressing obligations. But that you love them and will do your share, without opening your wallet each and every time.
#5 Find Money Mentors to Help with Guilt
Saying no means disappointing your family and feeling guilt about your decisions. And sometimes this can also lead to arguments and tension in the family. One way to cope is to find a money mentor.
A colleague confided in me his disappointment over a youth that he was mentoring. When he started working, they agreed that he will not reveal his true salary to his family as they are likely to put their hands on all the funds. To motivate his mentee, my colleague helped him open an account with a bank and also gave him an incentive – a bonus at the end of the year depending on how much he has saved.
And then a family member got ill and they leaned heavily on the mentee. He had no choice but to use up all his savings, which later led to his parents finding out that he had extra money. From then on, they insisted he take on a higher share of the family expenses, and he has not been able to rebuild his savings.
But there are other mentees with happier money endings, and their money mentors have given them a listening ear, a shoulder to cry on, and a cheering squad all rolled into one as they celebrated one saving success after another.
Disclaimer: The views in this blog are those of the blogger and do not necessarily reflect the views of ABS-CBN Corp.