Payday is usually a time of relief and excitement. Unfortunately, for many Filipinos, it often comes with financial stress and some wry humor. Indeed, salary day jokes are a small but noticeable, almost permanent part of Philippine work culture, pointing to wider issues related to the typical employee’s financial health.
Below, we’ve laid out some of the more common recurring themes plaguing Filipino workers on payday. Whatever the specific source of the stress, payday problems can make financial stability feel out of reach. If you relate to these problems and want to break free from this cycle, read on to learn practical solutions to avoid them.
1. Neglecting Bill Payments
It can be tempting to prioritize your wants rather than your needs and obligations on the days that you have the most cash to spend. Unfortunately, not paying your bills on time will result in late fees or unwanted compound interest. Set up a phone reminder to pay bills online through platforms like Maya and set up your bank or digital wallet app to save your regular billers so that there are fewer barriers to on-time payments.
2. Salary Disappears Instantly
If your salary is gone as soon as it arrives because of debts and unpaid bills, then you have a real financial problem. It can be difficult to get out of this situation unless you get an increase in income. However, if that isn’t possible in the short term, you’ll have to reallocate your budget to give yourself some breathing room. If necessary, cut back on non-essentials and entertainment to make more room for savings and other important expenses.
3. Living Paycheck to Paycheck
Living paycheck to paycheck may be less problematic than losing all your income to debt, but it can leave you vulnerable to one-off unexpected events like illnesses and emergencies. Again, the answer lies in cutting unnecessary expenses and better budgeting. Once you’ve allocated the amount necessary to cover your bills, commit yourself to developing financial discipline and living within your means. This is a necessary step towards breaking this cycle and enables you to save cash for rainy days.
4. Overspending on Payday Splurges
The “one-day millionaire” phenomenon is a common issue among Filipino employees. To be clear, treating yourself occasionally is fine. However, the treat should be within your budget. Make room for your indulgences with a separate “fun fund” and avoid dipping into your other allocations—like your bills payment funds or emergency funds—for these purchases.
5. Relying on Workplace Salary Loans
Some Philippine employers offer perks like salary loans and advances. However, while these loans don’t usually come with high interest (or any interest at all) taking them out can disrupt your budget cycle, making it hard to get into a stable rhythm of earning and saving. Avoid taking out any payday loan unless you’re sure you can make up for it in full on your next pay cycle. It’s much better to create a carefully planned budget centered on your fixed expenses like utility bills rather than counting on the availability of loans when you need a crutch.
6. Not Setting Aside an Emergency Fund
A significant number of Filipinos fail to set aside savings for future needs and emergencies. To avoid serious risks, adopt the “pay yourself first” method. Make it a habit to transfer a portion of your salary to a savings account each payday. If you have cash left over after fulfilling your financial obligations, consider adding more cash to investments to grow your money.
7. No Retirement Planning
Many employees focus only on short-term financial goals while neglecting retirement savings. Tragically, late-life financial struggles are quite common in the Philippines and it’s not always the fault of the employee.
Regardless, the best way to avoid this is by investing in a retirement fund as early as possible. Look out for government and private retirement programs or set aside cash to invest in appreciating assets like real estate or businesses. At the end of the day, you want to gain a source of passive income that’s big enough for a decent quality of life.
8. Most of the Salary Goes to Credit Card Debt
More and more Filipino employees are getting credit cards to facilitate travel and online purchases. In the right circumstances, they can be a smart way to get more from your budget. However, miscalculating the overall costs of credit card debt may cause you to go into a debt spiral. Knowing your card’s terms and being more mindful of your card may help you avoid unhealthy spending habits and make you more strategic with your payments.
9. Falling for Investment Scams
Many Filipino employees fall victim to fraudulent investment schemes, many of which may even be run by coworkers or family members. Unfortunately, a widespread lack of financial literacy has made upwardly mobile employees easy targets for these scams.
The best way to avoid these is by educating yourself and taking a more realistic view of investments. If you have some cash to spare, consult with financial advisors so you have clarity on your best investment options.
Now is The Time to Build Good Payday Habits
If you have a job, it’s not too late to build a healthy attitude to money. Practicing smart money management in small ways each day will build the foundations you need to effortlessly avoid these payday pitfalls. Start by building your savings and focusing on fulfilling your obligations first—pay your bills on time and buy your necessities before your wants—before you think about indulgences. As tough as building good financial habits might be, it will all be worthwhile as you can make each payday work in your favor.