What is Financial Freedom?
Financial freedom can mean different things for everyone, depending on their goal. It could mean the ability to buy without looking at the price tag, the ability to travel anywhere, or being debt-free.
Regardless of what it means, financial freedom is important now more than ever, with the COVID-19 health crisis greatly influencing our views about it. Since the start of the pandemic, many Filipinos realized the need to refocus many aspects of their lives—health, lifestyle, and most importantly, income.
In particular, millennials and Gen Z’s started becoming more conscious about their spending habits, sticking close to their budget to cover only the essentials and learning how to have an investment plan. Here, it’s vital to know the different ways of achieving financial freedom and be prepared to deal with potential setbacks. Yes, not all of your financial decisions will bear fruit right away. But don’t be disheartened. The trick is to omit the luxuries, take small steps, and make meaningful sacrifices to achieve financial freedom.
7 Small Sacrifices You Can Make to Achieve Financial Freedom
1. Avoid impulse buys
Some of your purchases may not be necessities. Perhaps you bought an item because you thought it looks cute or you found its color nice. Online shopping addiction can be detrimental, especially if you want to be financially healthy.
2. Order less food delivery
Food delivery isn't wrong per se. However, it often comes with delivery fees that, when stacked, can total a significant amount of money. You could have saved that amount if you made your food or picked it up in-store.
Suppose there’s a P30 delivery fee per transaction, and you order food around three times a week. That's equivalent to P90 per week, amounting to P360 per month and a staggering P4,320 per year. And, of course, that excludes the actual cost of the food items you order.
3. Let go of unused subscriptions
Are you signed up for a monthly photo editing subscription? How about a monthly magazine subscription or a weekly newspaper subscription? If you don't see yourself using them in the long run, it might be best to unsubscribe to save money.
4. Drop all-day conditioning
The Philippines is very humid, so using air conditioners is widespread. However, consider if it's necessary to have it on all day, every day. Maybe you can opt for stand fans instead, especially during the colder months. Switching the cooling system you use could save you valuable pesos in monthly electric bills.
5. Get rid of excessive phone plans
Nowadays, 85% of Filipino professionals are working from home, thanks to high-speed fiber internet plans that are becoming more affordable.
On the other hand, phone plans may cost more for a limited data allocation and generally slower speeds. If you spend all day at home with Wi-Fi, consider skipping on the phone plan and putting the money into your savings instead.
6. Opt for normal shipping
Online shopping has been around for a while; however, the pandemic encouraged, if not forced, people to buy more things online out of fear of contracting the virus. Because of this trend, people have started opting for faster, even same-day shipping. Unfortunately, speedier shipping means extra fees. Ask yourself if you really need to receive your items ASAP or if you could wait a few more days with regular shipping.
7. Resist buying expensive coffee
How can a cup of coffee be a "luxury?" Think about it. If you go out for a coffee run thrice a week and spend about P200 per cup, that's roughly P600 per week and P2,400 per month. That's about the same amount it takes to pay a monthly investment premium. So, ask yourself if you could make coffee at home instead.
Saving big starts with small steps
You can make these small sacrifices regardless of your stage of life. These sacrifices can amount to significant savings to go into your next long-term investment!
Starting early and small is the best way to ensure consistency in your sacrifices and savings. Then, once you've saved enough, you might want to set yourself up for an investment plan that will grow your money. Slowly but surely, you can achieve the financial freedom you've always dreamed of.
Even amid the pandemic, BPI AIA can help you reach your goal of financial freedom. So reach out to our Bancassurance Sales Executives and get started on your life goals today!