The Filipinos’ love for family is incomparable and unbreakable. For most of us, success and happiness are real only when shared with family. Thus, it’s not uncommon to forego our own dreams and goals if it means making our family comfortable, safe, and happy.
This is the story of almost every Filipino breadwinner of the family who works hard to provide, even to the point of putting their dreams on the back burner. For Pinoy breadwinners, financial freedom seems like a far-fetched idea because of the many financial responsibilities. Like paying the bills, sending the kids to school, and just making ends meet.
But as difficult as it may sound, being the breadwinner of the family also teaches one to be resilient, responsible, patient, independent, and wise. Having these traits are key to achieving financial independence as well.
For OFWs, solo parents, children assuming the parent role, or anyone running a single-income household, here are some smart money management tips to help with your breadwinner budget and get your finances in shape.
Budgeting Guide: 10 Tips for the Breadwinner of the Family
1. Track Your Money
Do you know where your money is going? It pays to track where exactly it goes.
Tracking your money is different from recordkeeping, though. Recordkeeping involves listing down your expenses, collecting receipts, and recording your receivables and payables, while tracking involves a little bit of analysis.
When you track your money, you begin to compare your expenses and understand why you’ve been spending so much on a particular item. For instance, comparing your electric bill for the last 6 months can help you understand your household’s electricity consumption habits and find ways to reduce it.
If you’re tracking your money, you can also get rid of habits that make you spend more. Being the breadwinner of the family doesn’t end at disbursing the funds. You also have the responsibility to lead the household on using resources wisely and managing the household budget responsibly. As Sir Benjamin Franklin once said, “Beware of little expenses; a small leak will sink a great ship.” Indeed, little unnecessary expenses can ruin your entire budget.
Tracking also means assessing your financial situation to know where you stand right now. Personally and regularly track your net worth, spending, and reasons for spending.
- Net worth: What you have (assets) minus what you owe (liabilities)
- Spending: What you’re spending on, including expenses, savings, investments, debt or loan payments, etc.
- Reasons for spending: Why your money is where it is and why you’re spending on things you are
There are different tools you can use to keep your finances in check, like Excel, personal finance apps, or the traditional pen-and-paper method.
2. Have a Serious Talk About Finances with Your Family
After tracking, analyzing, and identifying the factors that affect the breadwinner budget, it’s time to talk about it with your family. There can be a struggle or an unwillingness to cooperate, especially if there are bad money habits and behaviors. Sometimes, these discussions hurt a family member’s pride, especially when the negative impact of their bad money habits on the family’s finances are pointed out.
But just because everyone depends on your income doesn’t mean you have to bear the burden alone. You may be the unsung hero, but playing the hero all the time can take a toll on your physical, emotional, and mental health.
Sit down with your family to make them understand your real financial situation, the problems you’re going through, and how each one can help. Together, make a plan on how your family can help supplement your income and reduce spending, such as taking on part-time or work-from-home jobs, starting a small business with low capital, and avoiding unnecessary expenses.
Straightforward communication with your family sparks or strengthens their sense of accountability and responsibility, which can definitely help you manage your finances better.
3. Know When and How to Say No
Even if you’re earning a six-digit salary, you have every right to refuse entitled family members who constantly borrow money, request gifts or dole-outs, and rely on you all the time. You aren’t being a bad parent, child, or sibling when you don’t accommodate your family’s requests. You do have your limits, so you have to set your boundaries.
If you’re a parent and your kids always demand new toys, gadgets, or any expensive stuff, gently and calmly explain to them that times are hard and you need the money for more important things, like buying food and paying for your rent.
If you’re a breadwinner of your parents and siblings, let them know that your financial support has its limits, as you have your own dreams to pursue someday, like traveling the world or starting your own family.
Learn to say no to yourself, too. While it’s good to reward yourself once in a while, make sure you’re not spending on impulse and giving in to peer pressure.
According to a study, around 78% of young adults determine their money habits based on the habits of their friends. This can be more destructive than helpful because you and your friends have different responsibilities and priorities. Living a lifestyle you can’t afford will only hurt your finances.
4. Teach Kids the Value of Money and Hard Work
Robert T. Kiyosaki, author of the best-selling book Rich Dad Poor Dad, has this piece of advice about money: “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”
Thus, being a good breadwinner of the family doesn’t mean just earning a huge salary. It’s also about having the right money habits and training your children to follow your example.
Take every possible opportunity to impart to your loved ones how important money and hard work are, how to live frugally, and how to be responsible with money. Consider opening savings accounts for children and training the older ones on saving money or starting a business.
5. Pay Yourself First
Paying yourself first is an investor mentality that means automatically routing a specified savings contribution from each paycheck at the time it is received. When you pay yourself first, you immediately put aside a portion of your earnings to savings and investment.
As the breadwinner of the family, you don’t have to spend your full salary on your family’s needs every month. Think about your future, too. You can choose to save and invest in different and diverse investment vehicles.
Every payday, set aside an amount for your emergency fund, investments, insurance, and other financial must-haves using the envelope method or through separate bank accounts.
But there are breadwinners of the family who pay themselves first by rewarding themselves. Like buying new clothes for a confidence boost at work. Paying yourself first through small rewards can sometimes do more good than harm, especially if it makes you feel and look better and excel at what you do.
6. Invest Early
Investing, let alone saving, is extremely hard for someone who solely provides for the family. But being the breadwinner of the family isn’t an excuse not to invest.
Rather than just save money in the bank, put a percentage of it in investment instruments such as mutual funds and stocks where growth is higher. Investing is an effective way to beat the impact of inflation on your savings.
Learn about investing as soon as possible so that your money will have more time to grow, and you can achieve your long-term financial goals more easily.
To get started, read up on the basics of investing online and attend financial seminars. The Philippine Stock Exchange (PSE) and COL Financial conduct free public seminars separately. They’re great places to start learning the ropes of investing in the stock market. If you’re too busy, you can visit the PSE Academy website and learn from its reading materials and free webinars.
7. Get Insured
Like investments, insurance may be among the least of your priorities as the breadwinner of the family. But don’t treat it as just an added expense. Insurance protects your family from financial burden in case the unexpected happens to you.
For breadwinners, one of the insurance products to consider is variable unit-linked life or VUL insurance. It’s a life insurance and investment in one financial product.
Whatever insurance type you choose, make sure to list all your qualified dependents as beneficiaries. If you have dependents who are under 18 years old, appoint a trustee or guardian in the meantime (minors can’t receive insurance benefits until they hit the legal age).
Also, decide if you’ll declare them as revocable or irrevocable beneficiaries. If you choose revocable, taxes will be deducted from the benefit pay-out. But the advantage of having revocable beneficiaries is that you can make changes to your insurance policy any time without asking their consent.
On the other hand, irrevocable beneficiaries will receive the benefits tax-free. But you’ll have to get their consent each time you make any change to your policy.
8. Save for Retirement
Building a retirement fund is another thing most breadwinners forego because they have to prioritize their family’s needs. But come to think of it, all the years you’ve spent working to support your family financially will be put to waste if you aren’t able to save for your future self.
If you’re thinking the SSS pension you’ll receive when you retire will be enough to cover your living expenses, you’re mistaken. Find other ways to boost your retirement income.
Good thing, there are several affordable choices for Filipino breadwinners who want to start saving for their retirement such as the SSS PESO Fund and PERA investment.
9. Live Within Your Means
Who doesn’t want the finer things in life. Most people dream of having a large flat-screen TV, beautiful furniture, and a reliable family car. Seeing your loved ones happy and comfortable makes you happy, too. But trying to live the life you can't afford can ruin your finances. It can get you into debt that can make things more financially difficult.
Living within your means is spending less than what you earn. If your salary is just enough to cover the monthly utility bills, then it might help to stop paying for food deliveries. Prepare home-cooked meals instead. You can also downgrade your internet subscription if you don’t really need a super-fast connection meant for online gamers and streamers.
10. Avoid Bad Debts
Sticking to the breadwinner budget is not easy. Many times, you’re tempted to use your credit cards for unplanned purchases or apply for a payday loan to fund a family celebration.
Getting into debt is so easy, but getting out of debt can take a lifetime. Before applying for a loan, assess your reasons for borrowing. If you’re planning to use your credit card to pay for tuition fees or medical bills, then check if the issuer offers 0% installment privileges. If you’re applying for a loan to cover your home renovation in preparation for the rainy days, make sure to compare personal loans and their interest rates.
Sooner or later, a breadwinner of the family will need to borrow money. But borrow with a reasonable purpose and a doable payment plan.
Good money management is crucial to providing sufficiently for your loved ones and preparing for your own financial future. Being the breadwinner of the family is tough, but you can definitely stay on top of your finances. Resourcefulness, discipline, and flexibility are important in implementing a budget plan that works. Communicating your goals to your loved ones will also ease the financial burden and prevent you from making hasty and bad financial decisions.
-  How to Keep Peer Pressure From Destroying Your Finances (Wisebread, 2016)
-  Elevate Your Financial Well-Being (Rich Dad, 2021)
-  Pay Yourself First (Investopedia, 2021)
-  PSE Academy