The Philippines celebrates its Independence Day on June 12 to commemorate the country’s declaration of independence from Spain in 1898. Now, independence may mean many things to many people. But for many Filipinos, the one kind of freedom they are constantly fighting for is financial freedom.

While the definition of what is financial freedom may differ from person to person, it can generally be described as the ability to afford what one needs and wants. It is the financial capacity to live the life you want, knowing where you can get the funds when you encounter a personal or medical emergency, for instance. And this kind of freedom entails more than just having a high-paying job. Financial independence requires discipline—especially for the hardworking Filipino who has a life full of desires and responsibilities.

Here is a simple four-step process toward financial independence for every Filipino.

1. Pay your debts. The first step towards financial stability and independence is paying your debts. Not all debt is bad—especially if you can afford to settle them and you are not using credit to live beyond your means. It will be hard to save and invest your money if your expenses and purchases constantly exceed your income. If you cannot pay all your loans at the same time, focus on the high-interest debt first before settling on the lower-interest ones. This way, the fees you have to pay won’t pile up. If you have a high-interest credit card debt you are still paying off, avoid getting another card. Avoid borrowing money unless it is absolutely needed; definitely do not acquire debt to finance your leisurely activities or for new gadgets.
2. Save, save, save—and stick to a budget. Once all debts have been settled, focus on saving money. Save a fixed percentage of your monthly earnings—not what’s left of your salary after you’re done spending. You also have to consider any additional money coming in outside your monthly salary. If, for instance, you receive a monetary bonus from work, consider putting most of it into your savings account. The key here is to make sure you constantly save and you don’t touch your savings fund. Likewise, it helps to create a budget for your expenses to know how much money you can spend after you pay your monthly bills and after setting aside funds for your monthly savings. A more detailed budget, the better—create a weekly budget instead of a monthly one as this would give you a clearer idea of your financial capacity per your pay period. You can set up a time deposit or a separate bank account for your savings to help ward off the temptation of spending it when the “budol” pangs or the payday sales arrive.
3. Maximize your earning capacity. Create more ways to increase your income. This does not mean investing your money in stocks or the stock market—not yet, anyway. You can start simple, like doing side hustles that don’t require so much upfront costs like freelancing as a photographer or vlogger. When you are just starting out towards your path to financial independence, do not invest money that you cannot stand to lose.
4. Create an emergency fund. Once you have a clear grasp of your regular finances, create a fund that you will use specifically for emergencies. The benefit of this is twofold: you maintain your savings, and you have funds when you encounter any problems that require monetary solutions. Traditional wisdom indicates three to six months’ worth of salary is a good amount of money for when issues arise.

The best way towards financial independence is to have the right financial partner to guide and support you, like RCBC.

RCBC’s One Account is an all-in-one account that offers the features of savings, checking, and time deposit in a single account. It provides you with the flexibility and convenience you need to become financially independent. It offers a savings account with a debit card, transaction journal, and checkbook, with zero maintaining balance.

The journey towards financial independence may not be an easy one. However, it takes strong commitment and determination to get there.

For more information, visit https://www.rcbc.com/rcbc-one-account.