Breaking Free From Petsa De Peligro
Petsa de peligro translates to day of danger, a phrase not often used in the literal sense but more to describe a period during the month when one’s cash on hand is running low and payday is still a week or so away. It’s a common scenario experienced by most middle class Filipinos because of disproportionate spending right after payday. In turn, funds run out long before the next cut off and they end up scraping every penny that they could pull out from their pockets.
The best place to observe this phenomenon is at shopping malls. It is all too common to see people flocking to the malls during pay days – which is often 15th or 30th of the month for most Filipinos, so much so that you would have a hard time finding parking or will often find yourself having to brave long lines at payment counters or restaurants. However, try going to these places at least five days before the 15th or 30th and you’ll find them mostly serene and devoid of crowds.
Why is this common to Filipinos?
It is almost a cultural flaw since Filipinos are generally known for spending their cash immediately upon payout. Fancy dinners, karaoke or drinks with friends and co-workers, and shopping sprees, are deemed as well-deserved rewards after a month of work-related stress. Nothing wrong in indulging yourself occasionally as long as it won’t do your finances any harm.
However, it should also be noted that overspending is just one of the many reasons why a large number of people experiences petsa de peligro at one point or another. Other causes may include: emergency or unforeseen events such as illnesses or a car breakdown; getting a lower pay than expeced due to various deductions like tardiness and absences; and most importantly, lack of forward planning in your budget.
8 steps to beat Petsa de Peligro
Petsa de Peligro can happen to anyone but if you always find yourself in a financial crisis, you have to do something about it or it will be a cycle that you would not be able to get out off. So how can you avoid this? Here are a few tips:
1. KNOW the state of your finances, particularly the following:
To excel in your budget plan is to basically understand your income — how much you earn and how frequent you get paid — and your spending — how much you spend on a daily, weekly, and monthly basis. Then, balancing both aspects to ensure that you do not spend more than you earn.
2. Create a budget PLAN
After assessing your financial situation, determine what you can afford to cut off or minimize. Smart budget allocation is key as your spending habits should fit the amount of money you are earning. Plot your expenses using a program such as MS Excel or download a budgeting app on your mobile phone for easy monitoring. Here is a sample breakdown:
- Daily Expenses: Food and transportation allowances
- Monthly Expenses: Rent, communication allowance, water, and electricity bills
- Variable Expenses: Leisure and clothing allowances, cable bill, gym membership
3. Include SAVINGS in your budget plan
While you’re still in the process of fixing your finances, the savings should come from the amount of money you’ve saved from trimming down your expenses. Saving a certain percentage of your income should only come into the equation once your finances are already in a healthy state and your income is stable and enough to cover your necessities.
The money you’ve managed to put aside for savings should be sufficient to work as a buffer in emergency situations. The general rule of thumb for emergency fund it to save three months of your salary.
To help you do that, apply for a savings account without a debit card, a time deposit, health insurance, or a piggy bank for loose change. These will come in handy in unforeseen circumstances.
4. Pay goods in CASH
Refrain from swiping your card every time you need to buy something, unless you can get a better deal or discount using your card. There will be instances when paying with your credit card can be beneficial, money saving deals are common with credit cards after all. Rebates and rewards can help in cutting down your spending, and installment plans can also help you manage your cash flow better when you need to make large purchases. The key is to use your credit card strategically and only making purchases you can afford. Then, see to it that you settle your credit card right away.
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5. Only WITHDRAW cash on a weekly basis and stretch it for seven days
Seeing your remaining cash at hand may hinder you from overspending. It takes a lot of discipline to keep your spending within the limits of your cash at hand, but it’s one that you must learn to conquer if you want to be a master of your own finances instead of being its slave.
6. Get the COST-EFFECTIVE option
If UBER, GRAB, or cab is your usual means of transport, consider the cheaper options such as bus, FX, LRT, or jeeps. If you own a car, switch to public transport at least twice a week to cut down on gas expenses. Wake up earlier so you could avoid the peak hour congestion in the morning.
Buy food at a jolly jeep or a cafeteria instead of eating every day in expensive restaurants or fast food chains, or better yet cook and prepare your lunch for the next day. For clothes and other items, opt for surplus shops or wait for seasonal sales. Practice minimalism – you don’t need those extra five or ten stilettos or kicks in your closet. Most often than not, you only use a few of them anyway.
7. THINK before buying anything
Ask yourself if the item is worth it or necessary. Don’t fall for immediate gratification, wait a day or two and if you still want to get that particular item, then go for it. Buyer’s remorse gets even worse when your wallet is empty.
8. FOLLOW the plan
The hardest and most crucial part. All the planning in the world won’t make a difference if you don’t follow through. To avoid losing sight of your goal, start by plotting your plan on your phone (expense planner apps), with a planner, or anything that will remind you constantly of your budget plan. Lessen your trips to the mall or sessions in shopping websites to keep you away from the temptation to spend. That way, it will be less difficult for you to stick to your budget.
Break the habit
Sometimes, it’s really inevitable to run out of funds no matter how much planning we do, especially if you have financial obligations that cost more than your income. Single parents are not unfamiliar to this situation, especially during enrollment season.
If the funds are just too tight, consider borrowing from your family or friends. Alternatively, you can apply for loans from banks. However, make sure you are able to pay them back by factoring the repayment into your budget.
However, just like petsa de peligro, it shouldn’t be something constant that it’s already expected. Consider increasing your income by looking for opportunities you can leverage on on part-time basis, such as being a e-hailing driver.
It is hard to avoid the dreaded petsa de peligro particularly when it has become a habit. However, dealing with it is a crucial skill for any grownup. If you don’t act now, you will find yourself forever repeating this cycle and even if you get promoted or get an increase – your salary will never be enough for you.
So don’t fall into the trap of living from paycheck to paycheck. Stick to your income and expense plan. Monitor your expenses. Regularly check your lifestyle to see if you’re starting to go overboard again. Sooner or later, you will get the hang of it and will be on your way to financial health.
Remember, KNOW how much you have, WHEN you’ll get it, and WHERE you’ll be spending it on. Plus don’t forget to SAVE up for emergencies! Make your money work for you and not the other way around.