Do you have a healthy relationship with money?

How to make 2025 less painful on your wallet

The holiday season has just ended, and you might be experiencing post-holiday financial hangover—those extra expenses from gifts, parties, or even travel. But instead of overworking yourself or picking up more side hustles to catch up, consider a more balanced approach to managing financial stress in the new year.

According to a Bankrate article, around half of adults say money (or even just the thought of it) negatively affects their mental health.

You don’t have to look hard to see why. A recent study by the IBON Foundation found that the current minimum wage in the Philippines is still not enough to meet family needs.

Many of us have been motivated to work harder, constantly seeking any opportunity to earn more. However, it’s worth considering how much being “rich” will cost you. After all, wealth is not just about having “lots of money;” it’s also about your ability to handle financial stress.

Let’s talk about some ways you can manage your financial stress.

Leverage passive income through investments

Passive income allows you to earn money with minimal ongoing effort, giving you a sense of financial security. While there are lots of ways to earn passive income, the safest way to do so is through financial instruments such as:

• Mutual Funds: Pool your money with others to invest in a broad mix of assets that are selected for the fund.
• UITFs: These are ready-made bundles of investments tailored to various risk levels.
• Time Deposits: Play it safe with a time deposit, which earns interest higher than a simple savings account.
• Stocks: Buy shares in a company and watch your investment grow.
  
• Bonds: Earn interest when you lend your money to the government and companies that fund projects.

Before diving in, speak with a financial advisor to ensure your investments align with your goals and risk tolerance.

You can also try automating your investments. A lot of banks now offer auto-debit arrangements for your investment accounts. This way, you ensure you’re consistently working toward building your wealth without thinking about it constantly.

Upskill yourself to gain better work opportunities

Another way to reduce financial stress is to invest in yourself. Upskilling can help you advance your career or open doors to higher-paying opportunities. For working professionals in the Philippines, online learning platforms may offer affordable and flexible ways to enhance your skills.

Consider these strategies:

• Focus on in-demand skills: Industries such as IT, healthcare, digital marketing, and e-commerce are growing. Learning relevant skills like data analysis, project management, or digital marketing can significantly increase your earning potential.
• Pursue certifications: Certifications in your field can make you more competitive.
  
• Network effectively: Attend industry seminars to connect with professionals in your field. Building relationships can lead to mentorship and open more opportunities.

Consider side hustles with boundaries

While side hustles are a popular way to supplement income, it’s essential to approach them wisely. A side hustle can easily lead to burnout if it interferes with your primary job or personal life. To ensure you maintain balance, consider seasonal or project-based hustles that complement your schedule:

• Seasonal opportunities: Use your hobbies or talents to earn extra income. For example, if you bake, consider selling pastries or offering personalized gifts if you’re into arts and crafts.
• Freelancing: Some platforms allow you to take on short-term projects. Focus on gigs that align with your skills and availability. Consider appropriately charging based on your skill set. A lot of freelancers tend to undercharge thinking that it will help them get more clients. However, this is among the fastest ways to burn yourself out.
  
• Online selling: Sell items such as pre-loved clothing, books, or handmade crafts via online platforms.

Live within your means

Managing financial stress is not just about working endlessly or chasing every income opportunity. It is about living within your means and building a sustainable financial plan that balances your needs with your goals.

As you earn more, avoid the temptation to increase your spending. Instead, use your extra cash to grow your emergency fund or dive into investments, ensuring long-term financial health. Remember to find a balance between treating yourself and following your budget.

The key to reducing financial stress this year is building a healthier relationship with your money. By making smart financial decisions such as investing in yourself and budgeting effectively, you can set yourself up for a successful 2025.

We talk about this more in our free Earnest e-book.

Disclaimer: This article is for general information purposes and does not constitute formal financial advice. Always do further research before making financial decisions and seek professional advice from a certified personal finance counselor. For more information, read the Earnest disclaimer here.