Filipinos are some of the most hardworking people in the world. However, the lack of financial literacy, combined with bad money habits, leads many Filipinos to mismanage their finances and struggle with debt.

This is an ugly truth that we must address in ourselves to lead a financially rewarding life. If you want to be smarter with your finances and maximize the value of your hard-earned cash, here are some bad money habits that you need to overcome today:

1. Taking on more debt than you can afford

Both traditional and alternative credit-scoring companies gather your financial data and submit it to the Credit Information Corporation (CIC). This data is then compiled into your credit report, which is used by banks and lenders to assess your profile as a borrower. If your credit report shows that you have more revolving debt than you can afford, you may have a harder time securing a loan or applying for a credit card.

Whether it’s a gadget loan, personal loan, or some other form of debt, don’t take it on without planning for it beforehand. If you have lots of different obligations to pay, a new loan can wait.

2. “One-day millionaire” habit

There’s nothing wrong with treating yourself occasionally with the money you worked hard to earn. However, many Filipinos go overboard with splurging, especially on payday, making them a “one day millionaire” that will eventually lead them to run out of money a few days before the next paycheck comes.

To combat this habit, create a monthly budget that will cover all of your basic needs and savings. Whatever is left can be the splurging money you can use to treat yourself or your family.In this way, you can make sure that you have all of your needs covered and you don’t run out of money before the next payday comes.

3. Splurging on celebrations

Filipinos love to party. Whether it’s a birthday, graduation, or baptism, there is always bound to be a feast at home. However, spending too much on a single celebration is not a healthy habit for your finances. While there’s nothing wrong with celebrating, you don’t need to spend a whole paycheck just to feed the entire barangay.Moreover, if you have to borrow money just to cover the costs of the party, it’s a sign that you definitely cannot afford it.

Instead, stick to simple celebrations. Invite only your closest friends and loved ones to celebrate the day with you. Even if they’re small, simple celebrations can still be memorable.

4. Inflating your lifestyle

Just because you got a raise, promotion, or another stream of income doesn’t mean you need to inflate your lifestyle. A higher income can open up opportunities to new investments (e.g., car, home, business), but ensure that you can genuinely afford it. Moreover, don’t get carried away with luxuries just because you have more money now. If you want to put that additional income to good use, find ways to invest it.

Everyone wants financial independence, but not everyone knows how to achieve it. Hence, if you want to start managing your finances better, these are the typical money habits that you need to get rid of today.