Instilling the Habit of Saving Through the 52-Week Challenge

For this week’s class, Career and Life Planning was discussed which included an emphasis on personal finance, as explained through the video of the influential finance guru Ms. Suze Orman. Ms. Orman has been called by the USA Today as “a force in the world of personal finance and a one-woman financial advice powerhouse.”  Indeed, one of the advocacies of Ms. Orman is the “hyperactive preaching of frugality.”

As the video of Ms. Orman entitled “The Laws of Money, The Lessons of Life” was mostly skewed to an American audience, with its content dealing with Western concerns such as protecting your 401k and home mortgages, it got me thinking on how Filipinos view money and if there are efforts among us to save money.

In an article published at The Philippine Star (The Freeman), chartered financial analyst Gavin Lee stated that “Many Filipinos don’t seem to like the idea of saving because they say they are not earning enough and that people have the tendency to spend more than what they earn.” He cited as an example the “pasalubong” mentality of Filipinos where it is expected that one has to buy gifts to give back when he returns home. Mr. Lee explained that this practice only promotes unnecessary expenses. Other bad spending habits that were used as examples are using your income for vices such as smoking and drinking and the seemingly endless travel discounts and offers.

For most of us, spending money provides an immediate psychological gratification, a sense of entitlement that justifies that “since I work hard, I can shop harder.” Indeed, money has been such a major controlling force in our lives which is anathema to what Ms. Orman is preaching that “you should control your money, it should not control you.”

The simple solutions for saving money are often what work best for me, and the “52-week challenge” has proven to be one of the effective methods that I have encountered so far. After having gone viral on several social media sites abroad, it has been adapted locally on such blog sites as Kuripot Pinay. The premise of the challenge is simple, on the first week of the year, you set aside 20 pesos. Then on the succeeding week, you double the amount and save 40 pesos. For the third week, the amount is tripled and hence you put away 60 pesos and so forth. Sounds simple enough but down the line we are talking some serious money here.

I started doing this challenge in 2014 and when my officemates saw that I successfully implemented it, they joined the bandwagon and also did the challenge for this year. Now a word of caution: the 52-week challenge is basically a glorified piggy-bank, it does not earn any interest unlike a traditional bank. What is more important, however, is that it promotes a conscious effort to get into the habit of saving. When we undertook this challenge, I and my officemates were not so eager anymore to go to the 3 day mall sales and drink coffee at Starbucks.

Ayn Rand said that “money is only a tool, it will take you wherever you wish but it will not replace you as the driver.” As Lasallian business leaders, we should all be responsible drivers in our own journey towards financial freedom.