How delayed financial planning drains your wealth

For many Filipinos, personal finance often takes a backseat to daily responsibilities. We tell ourselves, "I'll invest when things settle down," or "I'll start saving when I earn more." But while we wait for the perfect moment, time quietly moves on — and with it, the value of opportunities is lost.

Delaying financial decisions doesn't just postpone progress; it creates a hidden cost that becomes painfully visible later in life. The longer we put off financial planning, the more we miss out on our most valuable asset: time.

A tale of two investors

Consider two Filipinos Maria and Juan Maria starts investing P2,000 per month at age 25, consistently until age 60. Over 35 years, she contributed P840,000.

Juan waits until age 35 to start. He invests P3,000 per month until age 60, contributing P900,000 over 25 years.

Assuming an average annual return of 8 percent, Anna ends up with over P7.5 million, while Ben ends up with about P5.5 million.

Why? Because Anna gave her money more time to grow. This is the power of compound interest, where your earnings also start earning.

The key message: you don't need to start big — you just need to start early and be consistent.

The role of banks

Many Filipinos trust savings accounts and time deposits — and for good reason. Banks provide safety, convenience and deposits are insured by the Philippine Deposit Insurance Corp. They're ideal for emergency funds, short-term savings and daily transactions.

But problems arise when people park all their money there, thinking it's enough for long-term goals.

Here's why: typical savings accounts yield less than 1 percent per year, and time deposits offer about 1.5 to 3 percent. Meanwhile, inflation in the Philippines averages 3 to 4 percent annually.

This means your money may grow in pesos but lose value in purchasing power. For example, P100,000 in a savings account today may only have the purchasing power of around P55,000 after 20 years, assuming 3-percent inflation.

Even if your bank balance doesn't decrease, what you can actually buy with that money will shrink significantly over time. It's like your money is standing still while prices keep moving forward.

So while it's wise to keep some cash in the bank for safety and flexibility, it's not ideal to leave everything there — especially money you plan to use five, 10 or 20 years from now.

The emotional cost of doing nothing

Beyond pesos and returns, financial inaction carries emotional costs stress from not knowing where your money goes, regret and frustration when you realize how much time — and potential — you've lost. These emotional burdens often go unnoticed until it's too late.

Three small actions that make a big difference

1. Know where you stand. Understand your current financial picture: list all income sources, track expenses, write down debts and assets, and calculate your net worth (assets minus liabilities). Clarity is the first step to control.

2. Start small, stay consistent. Even P1,000 or P2,000 per month can grow significantly when invested wisely. You don't need a large windfall to begin — what matters is starting now. Set up automatic transfers to mutual funds or digital investment platforms. Consistency beats intensity in wealth-building.

3. Balance your financial strategy. Think in layers short-term (0–one year): bank savings, T-Bills or time deposits for emergencies; medium-term (one to five years): balanced or conservative investment instruments like bonds and FXTNS; long-term (five-plus years): growth-oriented investments like equity funds or real estate.

This ensures your money works with the right mix of accessibility and growth potential.

Don't forget protection

While growing your wealth is important, it's equally vital to protect what you already have — your income, health and family. Life is unpredictable, and emergencies can wipe out years of savings if you're not prepared.

Consider health, life and disability insurance. These safety nets help you and your loved ones stay secure, even when life throws challenges your way.

Think of protection as the foundation that keeps your financial house standing strong so your investment plans don't crumble when unforeseen events occur.

Time is your greatest asset

It's easy to focus on what we can't do right now: "I can't save more," or "I don't know where to invest." But far more dangerous is what we don't realize we're losing by doing nothing: time, peace of mind and future opportunity.

Every year you delay is your future value lost forever. Every small step you take today is a seed planted for a more secure tomorrow. You just need to start.

Source: Manila Times