Think before you splurge
Have you ever a t tended a money management seminar?
Have you ever read one of those books churned out by enterprising writers talking about money and what you should do about it?
Have you tried listening to podcasts on how to create your financial goals, to be debt-free and to have financial independence?
All the stuff you have read and heard has convinced you that you need to come up with a budget and stick to it. And so you tell yourself you can do it. You are determined.
You come up with a budget and have the discipline to live within it. But then something happened.
Now you need to honestly answer this sensitive question: Have you ever experienced sabotaging the budget that you yourself created that left you wondering, “What happened? How come my money is gone?”
Did you answer, “Yes”? If you did, then welcome to the world of auto-piloting.
On last Saturday’s episode of Single/Single, Joey ( Matteo Guidicelli) spent the budget originally set to pay the electricity bill and threw a birthday surprise for Joee (Shaina Magdayao) instead. As a result, their power was cut in the middle of the celebration.
Anything you do automatically, without thinking, is really hard to adjust. I call this auto-piloting. You allow your habits, your emotions, your traditions and your careless beliefs to determine your actions without careful thinking.
I used to manage hundreds of employees. There was a pattern of behavior I observed about them that I could not understand. They worked very hard and many of them earned extra income by rendering overtime.
And when summertime came, they took advantage of their leaves, went to their provinces and splurged their earnings “onetime, big- time” in their town fiestas and celebrations, blowing their savings and destroying their budget.
Then when they came back, they worked harder, asked for cash advances and did extra work trying to recover the money they spent lavishly. It did not make any sense to me.
One time I cornered an employee and asked him frankly, “Pedro (not his real name), you are a hard worker, you are honest and a family man but why do you spend all of your hard-earned money and savings on your town fiesta and blow up your budget?”
Pedro gave me a sheepish smile and then replied with a very “scientific” explanation: “Sir, nakakahiya po sa iba kung wala kaming handa (it’s embarrassing if we have nothing prepared).” Now, isn’t that very “scientific?”
Fast- forward to the present: our very hardworking young people from the BPOs earn money, save it and then blow it one-time, big-time on trips abroad and then come back home with empty pockets, then work again, convincing themselves that this time they have to save cash and live within the budget.
But once the travel fair begins, they’re still the first ones buying the budget airfare, planning for the next trip and will eventually bust their budget all over again.
Money is an emotional issue. You work hard and sacrifice to earn it. Sometimes you have to spend extra hours in the office and go through sleepless nights in order to make a little more of it. And all of these involve our emotions.
Saving it and keeping it is like a sacrifice without any rewards. As a result, there is a consistent temptation to “spend just a little” of it because you “feel” you are entitled to “reward” yourself.
Deep within us is the constant motivation to pursue pleasure or to avoid pain. And when it comes to budgeting, as well as many other things in life, this rule of thumb applies.
When you get the pleasure first before going through the pain, that is usually a form of illegitimate pleasure that will have you paying a high price sometime later.
You splurge on whatever you want. You acquire with money you still do not have. You experience the momentary pleasure but once the bills come, the budget is now destroyed. Inevitably, an emergency happens, leaving you without the resources to deal with it. The pain is escalated and unfortunately, you still have to cope with it.
But when you dutifully write down all the items you spend your money on, you track both your income and expenses. You remove your savings immediately from the income and live within the expense. That is a budget you need to stick to; therefore you need to put your emotions on hold, and the experience may not be pleasant.
There will be trips you will have to miss. There will be stuff you cannot buy but when the budget is in order, the savings are there and the resources available as opportunities to grow it arise (and they always do), you actually enhance your pleasure.
Motivational speaker Zig Ziglar says it very well: “You don’t pay the price for success, you enjoy the benefits of success but you actually pay the price for failure.”
This applies to budgets, and I definitely agree with it.
‘Money is an emotional issue. You work hard and sacrifice to earn it.’
Single/Single is a wealth management project of The Philippine STAR in partnership with SunLife, Metrobank, Avida, Samsung, and Ford. It airs on Cinema One every Saturday at 8 p.m., with replays on Wednesdays at 8:30 p.m. and Sundays at 10 p.m.
Stay up-to-date on Single/Single by catching the latest episode synopsis every Sunday in the Entertainment section.