Managing your finances during the holidays

ABS-CBN News

Posted at Dec 20 2014 11:48 PM | Updated as of Dec 21 2014 09:43 AM

MANILA -- A registered financial planner gave tips on how to manage one's finances during the holidays.

In an interview on radio dzMM, Randell Tiongson, a personal finance coach, explained that most people tend to look at their credit card as a source of power.

"Majority sa atin, 'yan ang problema. Kapag gumamit ka ng credit card sa grocery, 10 to 20% more ang ilalabas mo," Tiongson added.

He also warned that credit card users should be responsible as their credit record can still affect them in the future.

"Kapag nasira ka na dahil sa credit card, kapag dumating 'yung time na mag-auto loan ka na, or housing loan ka na, say 8 years after o 10 years after, ‘yung iba dun, hindi na nakakakuha ng loan. Masisira ka talaga," Tiongson said.

Tiongson explained this is because credit ratings in the Philippines are not purged, unlike in the US.

"Sa Pilipinas, hindi nagpu-purge ng bad debts, sa US nagpu-purge sila after 7 years, back to zero. Dito, permanent record yan," he added.

In order to prevent accumulating debt, Tiongson shared the "golden rule" in credit card use: avoid buying something on credit if you cannot pay for it when the payment is due.

"In other words, gagamitin mo lang ang credit card kung may pambayad ka, at gagamitin mo lang siya for convenience," Tiongson warned.