We’ve had our fair share of depressing news headlines lately, anything from rising prices of consumer goods to outbreak of wars. But waking up to a report that claims almost 1 in every 2 Filipinos feel poor is a new low.

According to a national survey conducted by the Social Weather Stations (SWS), which took place from September 28 to October 1, 48 percent of Filipino families rated themselves as “Mahirap” or Poor, while 27 percent rated themselves as Borderline. The final 25 percent rated themselves as “Hindi Mahirap” or Not Poor.

SWS has been measuring Self-Rated Poverty (SRP) quarterly through face-to-face (F2F) surveys since 1992, except in the first three quarters of 2020 when F2F was not possible due to the lack of public transportation during the pandemic. For the latest survey, SWS polled 1,200 adults, or 300 each in Metro Manila, Luzon (outside Metro Manila), the Visayas, and Mindanao.

Compared to June 2023 results, there was a 3-point rise in the nationwide SRP figure due to increases in almost all areas except in Luzon. Mindanao went from 54 percent to 71 percent, followed by Metro Manila, from 35 percent to 38 percent and the Visayas, from 57 percent to 59 percent. Luzon was the only one that reversed the negative trend, from 39 percent to 35 percent.

What’s interesting about this survey is that the consumers gave themselves the Poor rating. Other surveys will ask the respondents for their income, look at their assets (if any), plus other factors that when put together will somehow arrive at a net worth to determine poverty or prosperity. But in this fairly straightforward poll, they are simply shown a card with two choices: Poor, or Not Poor. Then asked this question: “Where would you place your family in this card?”

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This reminded me of personal finance advice from several money experts who said your income doesn’t really determine if you’re rich or poor. Instead, a person’s money habits make the difference.

You can have a reasonable income and still struggle and feel trapped in a cycle of poverty. There are money habits proven to keep consumers broke, living paycheck to paycheck. Break free from this cycle and start making your money work for you by knowing (and kicking off) these negative money habits.

#1 Not “paying” yourself

The first commandment in personal finance is to pay yourself first, and if you are not doing this, you will not be able to turn around your financial situation. When we get our paychecks, we almost always start by paying off all the bills which may lead to very little left over. Financial experts challenge consumers to start by paying themselves first. Begin with 5 percent, and grow to 10 percent until you can hit the recommended 20 percent. The more you can set aside part of your income as savings, the sooner you can build your personal wealth and transform your financial standing.

#2 Living beyond your net income

Spending more than you earn is always a big NO. Sometimes, people overspend because they don’t have a clear idea of their net income. The simplest math is this: earnings minus expenses = net income. So if your salary is P30,000, less living expenses of P25,000, then your net income is P5,000. Try to save as much of it as you can. I once heard someone add her credit card limit to the net income, explaining that she has P5,000 net income plus a P50,000 credit line so she can spend as much as P55,000. That’s a sure way to fall into a debt trap.

#3 Making minimum payments on credit card debt

Credit card debt is growing. Latest data from the Bangko Sentral ng Pilipinas showed that credit card receivables went up 29 percent as of May 2023, or about P600 billion. While credit card debt is one of the most accessible, it is also one of the most expensive to own. If you use your credit cards, pay the full balance to save yourself the 3 percent monthly add-on rate. The longer you carry a balance on your credit card, the more expensive it becomes, and the harder it will be for you to pay it all off.

#4 Saying yes when people ask you for money

Why is it that even when money is tight for you, it’s hard to say no when a friend comes borrowing? We feel obligated to give, no matter how small, even when we know we will likely not see our money again. What’s worse is these people who borrowed from you are unlikely to fully realize what it cost you to lend to them. Maybe you had to skip a lunch to be able to help them out. Or you had to give up on a family trip. You need to see what it costs you when you lend money that you cannot really afford to, and just say no. Plus, the more you say no, the easier it becomes, and the less debtors come knocking. That’s a win-win right?

#5 Falling for get-rich-quick schemes

Scammers target people who have little financial education and are looking to make a lot of money with the little that they have. They will dazzle you with interest rates you won’t find anywhere else. Or they will offer gifts that are hard to resist – from smartphones to tablets to laptops. They will use family or friends to convince you. My advice is when it sounds too good to be true, it likely is, so just walk away. Or even better, run away. If it’s really that great an investment, they won’t need your little money right? So why are they desperately chasing you?

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