Understanding the Emotions, Social Pressures, and Financial Habits Behind Unnecessary Debt

 

One of the most puzzling realities of personal finance is that people sometimes borrow money to purchase things they already know they cannot afford.

A Filipino employee earning ₱40,000 monthly buys a ₱90,000 smartphone through installments. A middle-class family finances a new vehicle despite struggling with existing household expenses. A young professional uses a credit card to finance vacations, expensive restaurants, and lifestyle purchases.

These people may understand that borrowing involves interest, monthly payments, and financial obligations.

So why do they do it?

Because borrowing decisions are not always driven by financial necessity. Sometimes, they are influenced by emotions, social expectations, convenience, and the desire to enjoy today what one's income cannot comfortably provide.

Here are my four #acgadvice pieces of advice.

1. Understand What You Are Really Buying—and Why You Want It

Sometimes, people do not borrow because they need the product. 

They borrow because they want the feeling that comes with owning it.

Consider a young Filipino professional earning ₱50,000 monthly.

His existing smartphone works perfectly well, but he wants the latest model costing ₱85,000.

A financing company offers an installment arrangement with an attractive monthly payment.

He convinces himself that the new phone will help him become more productive.

But the real motivation may be something different.

Perhaps his colleagues already own expensive phones. Perhaps he associates premium brands with professional success. Or perhaps he simply enjoys the excitement of owning something new.

There is nothing inherently wrong with wanting beautiful or expensive things.

The problem begins when emotional satisfaction is financed through obligations that exceed one's comfortable repayment capacity.

My advice: Before borrowing, ask yourself whether you genuinely need the item or merely want the feeling associated with owning it.

Ask three questions:

• Would I still buy this if nobody else knew I owned it?
• Would I purchase it if I had to pay the full amount in cash today?
• Will this purchase improve my financial situation, or merely improve how I feel temporarily?

Sometimes, what we are trying to purchase is not the product itself, but the image, recognition, or satisfaction we believe it will bring.

2. Stop Confusing the Ability to Pay in Installments with the Ability to Afford Something

Being able to make the monthly payment does not necessarily mean you can afford the purchase.

This is one of the most common financial mistakes among consumers.

A ₱60,000 appliance may seem expensive when purchased outright.

But when offered at ₱2,500 monthly for 24 months, the purchase suddenly appears manageable.

The buyer focuses on the installment rather than the total financial commitment.

Now imagine someone already paying:

• Monthly obligation        Amount
• Motorcycle installment ₱4,500
• Smartphone installment ₱2,000
• Credit-card payment        ₱3,500
• Appliance installment        ₱2,500

Total monthly payments        ₱12,500

If that person earns ₱35,000 monthly, these payments already consume approximately 36% of income—before rent, food, transportation, utilities, savings, and family responsibilities.

Each purchase may have appeared affordable when considered separately.

Together, they create substantial financial pressure.

Furthermore, easy credit, buy-now-pay-later arrangements, and preapproved loans can make borrowing feel like ordinary spending.

But credit approval is not proof of affordability.

My advice: Before accepting another installment, calculate your total existing debt payments, essential living expenses, and the amount left for savings and emergencies.

Evaluate the full repayment amount, including interest, processing charges, and other fees.

If you cannot comfortably afford the financial obligation, making the payment smaller through a longer repayment period does not automatically make the purchase affordable.

3. Never Borrow to Maintain an Image of Success You Cannot Financially Sustain

One of the most expensive financial obligations is trying to maintain a lifestyle that impresses other people.

In the Philippine setting, social expectations can influence spending decisions.

• A family may borrow money to finance an elaborate birthday celebration.
• A young couple may use credit cards to fund a vacation because their friends regularly travel abroad.
• A professional may purchase an expensive vehicle because driving an older car appears inconsistent with their position.
• Parents may finance lifestyle expenses or educational choices beyond their financial capacity because they want their children to experience what more affluent families enjoy.

These decisions are often justified through statements such as:

• "Deserve naman namin ito."
• "Minsan lang naman."
• "Kaya naman hulugan."
• "Ayaw naming mapag-iwanan."

There is nothing wrong with celebrating achievements, providing opportunities for children, or enjoying the rewards of hard work.

However, the desire to appear successful can become financially destructive when it creates recurring debt.

Social media can intensify this pressure by encouraging comparisons with carefully selected images of other people's lifestyles.

What we see is the vacation, new vehicle, beautiful home, or expensive celebration.

What we do not see is the financial arrangement behind it.

My advice: Establish your own definition of financial success based on security, manageable obligations, adequate protection, and freedom from unnecessary financial pressure.

Do not allow the spending habits of other people to determine your financial commitments.

You do not need to borrow money to prove that you are successful. Real financial success is having greater control over your money, not merely appearing to have more of it.

4. Learn to Delay Gratification Before Debt Takes Away Your Financial Choices

The inability to wait for something we want today can create financial obligations that restrict what we can do tomorrow.

Borrowing makes immediate consumption possible.

You can enjoy the new phone today, drive the vehicle today, take the vacation today, or purchase the furniture today.

But the repayment obligation continues long after the excitement of the purchase has disappeared.

This is especially important when borrowing is used to finance nonessential expenses.

A ₱100,000 vacation financed through a loan may provide a week of enjoyment but require many months of repayment.

During those months, unexpected expenses may arise.

A family member may require medical attention. Household income may decline. School expenses may increase.

Unfortunately, the monthly loan payment remains due.

This is how unnecessary borrowing gradually reduces financial flexibility.

Money that could have supported savings, investments, protection, or productive opportunities becomes committed to paying for past consumption.

My advice: Develop a deliberate waiting period before making major nonessential purchases.

For example, wait 30 days before committing to an expensive discretionary purchase. Use that time to evaluate alternatives, calculate the full cost, and determine whether the item deserves priority over other financial goals.

Whenever practical, save for wants rather than automatically financing them.

This does not mean that all borrowing is irresponsible. Loans can be appropriate for education, housing, business expansion, genuine emergencies, or other well-considered purposes when repayment is sustainable.

The important distinction is whether borrowing improves your circumstances or merely satisfies a temporary desire.

The ability to delay a purchase today can preserve your financial freedom tomorrow.

My #acgadvice Principle

"Borrowing allows you to enjoy today what you cannot yet afford. 

But repayment requires you to sacrifice tomorrow what you may actually need."

All the best my friends!!

#acgadvice

When Your Family Stops Believing in Your Career: The Financial Advisor's Struggle Between Professional Ambition and Family Expectations

 

One of the most painful experiences for a financial advisor is not rejection from a prospective client. It is coming home to a family that no longer believes the career you have chosen will succeed.

At the beginning, your family may have been supportive. They celebrated your decision to pursue financial advising, encouraged you during training, and shared your excitement about the opportunities ahead.

• But months pass. 
• Income remains unpredictable. 
• Expenses continue. 
• Promised financial improvements have not materialized.

Eventually, encouragement turns into questions.

• "When will you start earning consistently?"
• "Why don't you find a regular job?"
• "How much longer are we going to wait?"

These questions can be especially painful because they come from the people whose lives you are trying to improve.

How should a financial advisor respond when the people closest to them begin losing faith?

Here are my four pieces of advice.

1. Understand That Your Family's Doubts May Come from Financial Fear, not a Lack of Love

Sometimes, the people who question your career are the same people most affected by its uncertainty.

An advisor may interpret a spouse's criticism as a lack of support or a parent's suggestion to find another job as a lack of confidence.

But consider the family's perspective.

Bills must be paid regardless of how many prospects you have contacted. School tuition cannot wait for the next commission. Grocery expenses do not disappear because a promising client postponed signing an application.

Your family may not understand the sales process, the difficulty of prospecting, or the time required to develop a sustainable client base.

But they understand the consequences of insufficient income.

Their concern may not be about your competence or potential. It may simply be about financial security.

My advice: Instead of immediately defending your career, listen carefully to what your family is worried about.

Ask what specifically concerns them. Is it the inconsistent income, growing debt, lack of savings, or uncertainty about the future?

Acknowledge legitimate concerns without abandoning your professional aspirations.

Your family may not have stopped believing in you. They may simply be afraid of what will happen if your career does not work out.

2. Do Not Ask Your Family to Keep Sacrificing Without Showing a Financial Plan

Believing in your career does not automatically justify exposing your family to continuing financial uncertainty.

Many financial advisors enter the profession because they want to provide a better life for their families.

They dream of earning more, enjoying flexible working hours, and eventually achieving financial independence.

These aspirations are legitimate.

However, the promise of future success cannot indefinitely substitute for present financial responsibility.

Imagine a Filipino financial advisor who has been in the business for two years.

There have been occasional good months, but commissions remain inconsistent. Meanwhile, the family has exhausted its savings and begun using credit cards to cover ordinary household expenses.

The advisor continues reassuring the family that a breakthrough is coming.

But hope, without a practical financial plan, can eventually become another financial burden.

My advice: Establish a realistic household financial arrangement while building your advisory career.

Determine the minimum income your family requires, maintain a reasonable emergency fund where possible, control unnecessary expenses, and consider supplementary income when necessary.

Be transparent about your financial situation and avoid making promises based on sales that have not materialized.

Your dream deserves a chance to succeed. But your family deserves financial stability while you pursue it.

3. Replace Promises of Future Success with Evidence of Real Progress

When people have heard enough promises, they begin looking for results.

Financial advising is a profession that places considerable emphasis on motivation, positive thinking, and perseverance.

Advisors are encouraged to believe in themselves, visualize success, and persist despite rejection.

These attitudes are valuable, but they are not substitutes for effective business activity.

A struggling advisor may spend considerable time attending meetings, participating in training, posting motivational messages, and discussing ambitious production goals.

Yet the activities that actually generate business may remain insufficient.

Your family may hear you repeatedly say, "Next month will be better."

Eventually, those words lose their meaning.

What restores credibility is not another inspirational promise but measurable progress.

My advice: Develop a disciplined business activity plan and evaluate it honestly.

Track meaningful prospecting conversations, client appointments, follow-ups, referrals, suitable applications, and actual commissions earned.

Identify which activities produce results and which merely create the appearance of being busy.

Share your progress with your family when appropriate—not to impress them, but to demonstrate that your career is being managed like a serious business.

And if the results reveal weaknesses in your approach, make the necessary changes.

Your family does not need to hear how successful you intend to become. They need to see that you are taking the necessary steps to make success possible.

4. Know the Difference Between Perseverance and Refusing to Accept Reality

There is courage in continuing despite difficulties. There is also courage in recognizing when something must change.

Financial advisors often hear stories about successful industry leaders who struggled for years before achieving extraordinary results.

These stories can inspire perseverance.

But they can also create an unrealistic belief that anyone who refuses to quit will eventually become successful.

The reality is more complicated.

Some advisors need better training, stronger mentoring, improved prospecting skills, or a different target market.

Others may need to change agencies, adopt a part-time arrangement, or supplement their income while developing their practice.

And some may eventually conclude that financial advising is not the most appropriate full-time career for their circumstances.

That conclusion does not necessarily represent personal failure.

What matters is making a responsible decision based on actual results rather than pride, fear, or the unwillingness to abandon a dream.

My advice: Establish a reasonable period for evaluating your progress, with clear performance and financial milestones.

Discuss these expectations with your family.

If meaningful improvements do not materialize, be prepared to modify your business model, seek additional income, or reconsider your career direction.

Do not confuse changing your strategy with giving up on yourself.

Persistence is valuable when it moves you toward progress. When it repeatedly produces the same disappointing results, wisdom may require a different direction.

My #acgadvice Principle

"When your family stops believing in your career, do not demand their faith. 

Earn back their confidence through responsibility, discipline, and measurable progress."

All the best my friends!!

#acgadvice