Entering adulthood brings newfound responsibilities, and one of the most important aspects of this is learning how to manage your finances. In the Philippines, where many young adults support their families or contribute to household expenses, effective financial management is crucial. By applying biblical principles alongside practical strategies, you can establish a strong financial foundation that honors God and secures your future.
1. Creating a Budget: Stewardship of Your Resources
Budgeting is one of the most important tools for managing your finances. From a biblical perspective, we are called to be good stewards of what God provides. Luke 14:28 reminds us, “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?” Similarly, creating a budget allows you to take control of your finances and plan how to use your resources wisely.
- Track Your Income and Expenses: Young adults often juggle multiple income sources—such as salaries, freelance gigs, and remittances from family members abroad. Start by listing all your sources of income, then track your expenses. Consider fixed costs like rent, utilities, transportation, and discretionary spending on things like food and entertainment. Knowing exactly where your money goes helps you avoid overspending.
- The 50/30/20 Rule: A popular budgeting strategy is the 50/30/20 rule—allocate 50% of your income to necessities, 30% to wants, and 20% to savings or debt repayment.
2. Saving for the Future: Preparing for What’s to Come
Proverbs 21:20 says, “The wise store up choice food and olive oil, but fools gulp theirs down.” Saving for the future is an essential principle of financial wisdom. Whether you’re planning to buy a house, start a family, or prepare for retirement, having savings gives you a sense of security and allows you to respond to unexpected events.
- Start an Emergency Fund: Life can be unpredictable—natural disasters, family emergencies, and job instability can create financial challenges. An emergency fund should cover 3-6 months of living expenses to help you weather these storms without going into debt. Begin by setting aside a small amount each month, gradually increasing it as your income grows.
- Build Up Your Savings: There are plenty of options for saving money. These include bank accounts, including those offered by digital banks, savings programs from state firms Social Security System (SSS) and Pag-IBIG, and fixed-income instruments, such as Retail Treasury Bills guaranteed by the government.
3. Avoiding Debt: Living Within Your Means
Proverbs 22:7 states, “The rich rule over the poor, and the borrower is slave to the lender.” Debt can quickly become a financial burden, especially for young adults. Credit cards and personal loans may seem like easy ways to access money, but accumulating too much debt can weigh you down and limit your financial freedom.
- Be Cautious with Credit: In the Philippines, it’s becoming easier for young adults to access credit cards and online lending apps. While credit can be useful in emergencies, it’s important to use it wisely. Only borrow what you can afford to pay off in full each month to avoid high interest charges. If you do need to take out a loan, make sure to compare interest rates and repayment terms carefully.
- Prioritize Paying Off Debts: If you already have debts, prioritize paying them off as quickly as possible. Create a repayment plan and stick to it. Paying off high-interest debts, such as credit cards, should be your top priority, as this will save you money in the long run. Living within your means and avoiding unnecessary debt helps you maintain financial stability and reduces stress.
4. Giving Back: Honoring God with Your Finances
As Christians, we are called not only to manage our finances well but also to give generously. 2 Corinthians 9:7 says, “Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.” Giving back to God through tithes, offerings, and helping those in need reflects our gratitude for His provision and blesses others.
- Bring Your Tithes to God: Tithing shows that you trust God to meet your needs. Setting aside that 10% demonstrates faith in God’s provision even when finances are tight. Malachi 3:10 tells us, “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.” God challenges us to trust Him with our resources, and He promises to bless our faithfulness.
- Practice Generosity as a Lifestyle: Generosity isn’t just about tithing; it’s a way of life. Whether it’s sharing food with a neighbor or helping a friend with transportation, small acts of generosity reflect God’s love. Living with an open heart and a willingness to give—regardless of the amount—creates a cycle of blessing in your life.
5. Investing for Growth: Multiply What God Has Given You
In the parable of the talents (Matthew 25:14-30), Jesus emphasizes the importance of wisely using what we’ve been given. Investing is a way to multiply your resources and build wealth over time. As a young adult, the earlier you start investing, the more time your money has to grow.
- Learn About Different Investment Options: Various investment opportunities are available to young adults, from mutual funds and stocks to real estate investments. If you’re just starting, consider opening a UITF (Unit Investment Trust Fund) or a mutual fund account, which allows you to pool your money with other investors and benefit from professional fund management.
- Invest in Your Education and Skills: Another important way to invest is by improving yourself. Whether through formal education or learning new skills, investing in your personal development can increase your earning potential and open up new career opportunities. This is especially important in the competitive job market in the Philippines, where skills and experience can make a significant difference in your career trajectory.
Managing your finances as a young adult in the Philippines requires discipline, intentionality, and a heart that seeks to honor God. By creating a budget, saving for the future, avoiding debt, giving generously, and investing wisely, you can build a solid financial foundation that not only supports your personal goals but also aligns with biblical principles. Remember, financial success is not just about accumulating wealth but about being a faithful steward of the resources God has entrusted to you.
Discussion Questions:
- How can you start practicing better financial stewardship today?
- What are some ways you can balance supporting your family and saving for your own future?
- How can you incorporate generosity into your financial planning as a young adult?
