THERE was a time when I thought that if I had enough money to buy something, then I could afford it. After all, what is the purpose of working hard and earning money if we cannot enjoy the things that we want? I remember looking at a gadget in a mall that I really wanted to buy. It was quite expensive, but I had enough money to pay for it outright. The salesman was very accommodating, explaining its features and even offering a discount if I purchased it that day.
I was tempted, of course. Who would not be, especially when you have the money? But then I remembered that I already had a similar gadget at home, which was still working perfectly well. The new one had better features, yes, but did I really need them? Not really.
So after spending some time looking at it, I decided to walk away. It was not easy, especially since I had already imagined myself using it. But after a few days, I practically forgot about the whole thing. And the money remained safely in my account.
That experience made me realize something: having the money to buy something is different from being able to afford it.
As a registered financial planner, I have always emphasized the importance of budgeting, saving and investing. But knowing these principles is one thing. Applying them to your own life, especially when you have a family to support, is another.
When I was single, my financial responsibilities were relatively simple. I could spend on things that I wanted without having to think too much about how they would affect other people.
But marriage and fatherhood changed that. Suddenly, money was no longer just about my personal wants.
There were household expenses, insurance premiums, emergency savings, and, of course, the future education of our children.
And these things cost money. Lots of it. So, while I may have enough cash to purchase something expensive, I also have to consider what that money could otherwise do for my family.
Suppose I wanted to buy something worth P20,000. I could pay for it without borrowing. But that same amount could cover several months of utilities, become part of our emergency fund, or contribute to our children’s education.
In financial planning, this is what we call opportunity cost. Every time we spend money on one thing, we give up the opportunity to use it for something else.
And this is where things become difficult. We are constantly surrounded by opportunities to spend. There are mall sales, credit card promotions, new gadgets and advertisements that tell us we deserve something better.
Sometimes, the temptation becomes stronger when our income increases. A salary increase may mean a better car. A bonus may mean a new television. An unexpected windfall may become an excuse for a vacation.
Nothing wrong with these, of course.
We all deserve to enjoy the fruits of our labor. But if our expenses increase every time our income increases, how do we expect to accumulate savings? Consider someone who receives a P5,000 monthly salary increase. That is an additional P60,000 in one year. If he spends everything on dining, shopping and entertainment, his financial position may not improve despite the higher income.
But if he saves even half of that increase, he would accumulate P30,000 in one year, excluding interest or investment earnings.
Imagine what that amount could become over several years. I have therefore learned to be more deliberate about purchases. Whenever I see something expensive that I want, I try not to buy it immediately.
Instead, I give myself a few days to think about it. If I still want it afterward, I check whether it fits our budget and whether buying it would affect our other financial priorities.
More often than not, the excitement disappears. Of course, this does not mean that I have stopped buying things for myself. I still enjoy good food, occasional purchases and experiences with my family.
The difference is that I now try to spend with greater purpose. My wife and I have financial goals that we want to achieve, and every peso saved brings us closer to them. Some goals may take years to accomplish, but I would rather make small sacrifices today than find ourselves financially unprepared tomorrow.
Because sometimes, the best financial decision is not about what we can afford to buy, but what we are willing to give up for something more important.
Rienzie Biolena is a registered financial planner of RFP Philippines. To learn more about personal financial planning, attend the 119th RFP program thisJanuary 2027. Email info@ rfp.ph or visit rfp.ph to learn more about the program.
