Don’t borrow money. Just cut back.

For many Filipinos, it is easier to borrow money when times get tough. And to return the money when we already have money. 

The problem is, it’s not easy to borrow money. If you have a habit of borrowing money, people will start to avoid you. They don’t want to be around you because you keep on borrowing, and not really paying.

That’s why, people would borrow money from loansharks, who lend money at unscrupulous rates. The term, “5/6” is very common, which means if you borrow 5, you have to pay 6. In short, that’s 20% interest to borrow and pay money within the timeline agreed.

Our messenger is such an example. His wife does not work and they have two young kids to feed. Given her poor health, he has resorted to borrowing money from SSS, and when that wasn’t enough, from the local loan shark. 

The issue was, his wife didn’t understand the financial muck he has put themselves in and has continued to spend beyond their means. She also didn’t want to work, which contributed further to their financial constraints. 

The problem with debt is that it’s so easy to get into but so hard to get out of. 

Once you’re in debt, it’s a struggle to get out of it, and all the money you make is now for the payment of debt and interest. 

Our company does not provide advance, vale or credit notice to our people. In the Philippines, it is quite common to do so especially in blue collared jobs like construction. 

I have asked my father-in-law about it and he had strict rules against loaning money to his staff.

He said that even during the Spanish times, it’s common for a master to lend his people money to help them out. But there is actually a sinister way on why this system is in place — once the person cannot pay anymore, the person becomes indebted to the master, and will have utang na loob.

A person who has utang na loob can often find himself giving more to pay off his debt. In the olden days, the family would be under the master’s employ to pay off their debt. And often times, you will sacrifice yourself and your dignity because you are indebted to your master with a debt you cannot pay.

I want to treat people with respect and dignity so I do not give people money in the form of debt,” he said. “That for me is cruelty and you are not really helping them, but harming them.”

“The best thing we can do as bosses is to pay them fairly and on time,” he said. “But we do them no favor when we help them get mired in debt.” 

That is why it’s our company policy to not allow any borrowing or loaning of money in the workplace. 

We tell them during their first day that we will pay them fairly and timely, but we expect them to be financially responsible and to limit their expenses to their salaries. Violators run the risk of being terminated. 

But it’s hard to stop borrowing money, especially when you have the habit. 

There’s actually a joke — people who borrow money from others are often the ones who get angry when other people say no.

Isn’t it supposed to be the other way around? Why should we get offended when other people do not lend us money? 

Personally, borrowing money for me is embarrassing. I am ashamed when I have to ask people for favors. It shows I cannot do it on my own. That I need people to help me get off my own mess. 

But not everyone is like me. For many people, especially to those who have made it a regular habit, borrowing money is the norm. They don’t feel embarrassed, and they have no qualms asking you for money. 

But debt would always have to be paid. 

Nothing is for free. If it is, it would’ve been called a gift, not a loan. And money once borrowed, well, it’s just so easy to spend.

Have you noticed how easy it is to borrow and spend, but how hard it is to pay something back?

But pay back we have to, and at much significant cost. And it’s not uncommon to have people pay for their debts, only to find out that they are merely paying for their interest and not for the principal. 

So please stop being in debt. 

It is much easier to cut back on expenses than to be in debt.

If you don’t have a lot of money, cut back on expenses. 

My daughter’s favorite foods for example are pasta noodles, rice, and pandesal bread. We joke that she can live a simple life and still be okay. 

I used to live in an apartment that was half the price of my colleague. It was in a more local neighborhood and in a marketplace, but it was also cheaper and the money I saved allowed me to buy other things. 

I wore clothes bought from the thrift market. In Taiwan, everything I wore was from the night market. A skirt was NTD100 each (or php150), back at a time when ukay ukay was still unpopular. 

I ate simply and loved the food court. It’s only now that I am older that I let myself eat more luxurious things, but back when I was budgeting, I would choose cheaper restaurants and didn’t shy away from eating in the side streets. Anything to save money.

Instead of taxi and Uber, I would always take the public transportation. My company had a free bus and I would take it because it saves me money.

If you really want to, it’s easy to cut back — just don’t spend too much money. Have a budget and stick to it, and when you don’t have any money anymore, adjust and live simpler. 

Money can go a long way if you don’t keep up with the Joneses.

Money can be your best friend or your greatest enemy. If you put money in the bank or in bonds where it earns interest, it will make money for you Day in and out.

But at the same time, money as debt can be a cruel master. No matter how hard you work, it’s so hard to get yourself from the mess.

So are you savings positive or debt positive? Do you have debt? What are your experiences with having debt? How do you manage it and do you think it’s possible for you to cut back so you can get yourself out of debt?

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