Money and Millennials: A Complicated Relationship

We’ve all heard stories of how our parents’ generation was able to settle down and buy a house in their 20s. And while many of us might not consider that as a priority, the financial independence and stability required for that ability remains elusive. 

Despite the multitude of skills and level of ambition young Filipinos have, not to mention the endless ways to make money these days, becoming financially independent is more complicated than ever. But don’t let that keep you down: the key to overcoming these challenges is getting to know what they are, so you can make informed decisions and navigate your way toward a financially successful future.

Here are the top five financial challenges for young Filipinos:

1. The “Sandwich Generation” squeeze

Filipino culture emphasizes strong family ties. This means that many of us find ourselves supporting not just our own lives, but also those of our aging parents and younger siblings. This isn’t inherently a bad thing, because it’s in our nature to care for others, but that also sometimes stretches our income thin. The challenge is to maintain a delicate balance between fulfilling multiple financial obligations with our own wants and needs. 

2. The financial literacy gap

How many times have you asked yourself, “How come they didn’t teach this in school?” Financial education in the Philippines isn’t always a priority in schools, leaving many young Filipinos without the knowledge and tools to manage their finances effectively. This often leads to poor budgeting habits, impulsive spending, and difficulty navigating financial products like investments and insurance. 

This lack of awareness, coupled with the temptation and ease of instant gratification in today’s internet age can leave us vulnerable to scams and even predatory lending practices.

3. The uncertainty of the gig economy

The idea of living as a freelancer versus holding an office job is alluring – you dictate your own schedule, you get to be your own boss, and the limit to what you can earn is only yourself. But that also comes with its drawbacks: income can be inconsistent, you have to get your own health insurance, and there’s no security in the amount of work. This financial uncertainty can make it difficult to plan and build a safety net. 

4. The stress of balancing salary versus cost of living

You’ve probably noticed that the prices of groceries and other necessities have risen quite a bit since the pandemic. While the country’s economy is growing, wages haven’t risen proportionally to the cost of living. Inflation is leaving a noticeable hole in our wallets, making it difficult to spend beyond just what we need. This leaves little room for saving or investing, making the path to financial security more challenging.

5. The debt trap

With all of these financial burdens, informal lending schemes have gained popularity. Getting a small loan has become almost as easy as online shopping. But these schemes sometimes have predatory rates, and this can easily spiral out of control. Without proper financial education, this can lead to a cycle of debt that will hinder your financial progress.
 

This might all sound bleak, but don’t lose hope. Remember, acknowledging the challenges is the first step to overcoming them. The next step is equipping yourself with the right financial tools and expert advice to properly budget, save, plan, and invest.

Want more financial tips and tricks? Visit The Program for more.