Top 3 Most Common Mistakes In Personal Finance and How to Avoid Them


Managing personal finance can be a challenging task for many individuals, especially those who are new to the world of money management. There are numerous online resources for financial advice, but there is a risk of misunderstanding and making common mistakes that can lead to financial difficulties or even debt.

In this article, we will discuss the top three most common mistakes made by individuals who lack knowledge or experience when managing their finances in the Philippines. CashLoanPH will also provide tips on how to avoid these mistakes to ensure you have a secure financial future.

Spending More Than Your Income

Overspending and mindless spending is one of the most common mistakes that need to be addressed, especially in the Philippines. When you spend without thinking of the consequences, you often buy things that you don’t need or can’t afford. This impulsive behavior can quickly strain your finances, leading to credit card debt.

Moreover, overspending prevents you from saving money for future goals such as retirement or your children’s education. Additionally, it leaves you vulnerable to financial crises when there is no surplus for emergencies, such as illness or unemployment. Therefore, it is crucial to always spend within your means to avoid making this mistake.

To avoid mindless spending, it is essential to create a budget and stick to it. Tracking your spending can help you see where your money is going, and cutting back on non-essential purchases will free up funds that can be used elsewhere. Moreover, using cash more often than credit cards can also help you overcome the temptation of spending more than you can afford.

Too Many Monthly Payments

The second mistake is having too many on-demand monthly payments. Filipinos are used to paying monthly bills, including both consumer and spending bills. Consumer bills such as electricity, water, and internet bills are unavoidable. However, spending bills, including credit cards and installment payments, are variable.

Having too many monthly payments can add significant financial pressure on your wallet. If you miss a payment, you may be subject to extra interest, leading to more financial burden. While utility bills cannot be changed, spending bills can be limited. Try to limit your credit card spending, pay off your debt quickly, and limit your debt or pay in installments over several months.

Consolidating your bills into a single payment can also make it easier to manage your finances. It will reduce the number of bills you need to pay each month, and the interest rate on the consolidated debt may be lower.

No Emergency Fund

One of the most common mistakes individuals make is not setting up an emergency fund. To avoid this, they prioritize using the money to repay their debt, invest, or save for long-term goals. However, not having an emergency fund can be a significant mistake, as unexpected expenses such as medical bills, repair costs, and other unforeseen expenses can appear at any time.

If you do not have an emergency fund, you will have to rely on credit cards or loans to cover these expenses, making you vulnerable to debt. An emergency fund helps you deal with unexpected financial difficulties and can act as insurance for your financial security. Start saving money each month to build up your emergency fund. Aim to save at least six months of your living expenses, so you are prepared for any unexpected expenses.

If you have not yet built an emergency fund and are in need of financial assistance, online loans in the Philippines can be a way to solve urgent financial difficulties. However, it is essential to choose a reliable lender to ensure you receive low-interest and secure loans to prevent falling into a debt trap.

MoneyCat is an online lender in the Philippines that provides low-interest and secure online loans with fast disbursal times within the same day. As a large and long-standing financial institution, with experience operating in Russia, the Philippines and Vietnam, MoneyCat provides the best and most suitable online loan solution for each borrower.


In conclusion, avoiding the top three most common mistakes in personal finance is crucial to secure your financial future. By creating a budget, limiting your monthly payments, and building an emergency fund, you can avoid falling into the debt trap. Moreover, if you need financial assistance, it is essential to choose a reliable lender like MoneyCat to ensure you receive low-interest and secure loans.

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CashLoanPH Changed status to publish 15/04/2023