A Low-income Earner’s Guide To Saving and Investing

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Salary figures in the Philippines aren’t the most coveted, and with financial education not very apparent in the country, individuals with low-income are inclined to think that their options are very limited when it comes to growing their wealth.

For example, it has been disclosed that 71% of middle- and upper-class Filipinos are familiar with insurance, but only a measly 16% actually owns any insurance product. Considering these individuals earn a higher income, how much worse could the case be among low-income earners?

Thus, it is important to spread ample awareness about the benefits of insurance and investments in the Philippines, especially to those with low wages, and even to minimum-wage earners. The Undersecretary of the Department of Finance, Gil Beltran, has stated that he wants at least 50 million Filipinos to be covered by insurance by 2022, as part of the Philippine government’s strategy to extend financial inclusion.

Investment Product Options for Low-income Earners

Mutual funds are a good option for investment novices. You’d invest a certain peso amount to a company, who would then allocate them in various income-earning investment products like stocks, bonds, money market funds, and other securities. If you’re intimidated by the idea of having your hard-earned money distributed someplace else, worry not, because in a mutual fund, your money would be professionally handled by a fund manager. All investment decisions shall be made by them, so you only have to wait for your money to earn income in several months up to five years or more.

UTIF or Unit Trust Investment Fund is also suitable for low-income earners. It also works similar to a mutual fund, only a bank handles your money instead of an insurance company. However, your capital gains in UTIF will be subjected to withholding taxes, unlike your capital gains in a mutual fund.

Microinsurance is offered to Filipinos with low incomes and those with limited access to financial markets. Compared to traditional insurance, microinsurance’s premiums are far lower, amounting to only less than a hundred pesos. Minimal documents are needed for applications, and claims can be given within 10 business days. As of 2019, 38.9 million Filipinos are covered by microinsurance.

Term life insurance will also work for low-income earners. Out of the three types of life insurance, (term life insurance, whole life insurance, and endowment), it has the most affordable prices. You’d be covered within a fixed term, usually 20-30 years, and your beneficiaries will be granted a death benefit should you pass away within the effective term. There are also no additional charges for any of its features.

Take note, however, that insurance monthly payments are typically higher for older people, so it’s best to invest in them while you’re still young.

Money-Saving Tips


By practicing the following habits, you’d be able to save tens of thousands in no time and start investing:

  1. Cook your own meals. Dining out every day easily exhausts your money. If that’s not an option, choose cheaper dining establishments.
  2. Cut back utility costs. Switch off lights when no one is in a room, adjust your AC’s thermostats, conserve water, and give up unnecessary subscriptions that cost you more money.
  3. Readjust your budget. Look closely at your current budget plan and assess in which areas you can make adjustments. Can you cut down your grocery budget? What about entertainment, or rent? Look for ways to save more money every month.
  4. Always pay in cash. Paying cash helps you track down your expenses and savings more accurately. It also motivates you to limit your spending.
  5. Settle debts. If you have credit cards, work on paying them off as quickly as possible. You can save more comfortably with the knowledge that you’re debt-free.

Around ₱20,000 is all you need to start investing, so start planning for your future and exercise discipline when it comes to controlling your spending. Your low salary doesn’t make you incapable of being a millionaire in the future, so keep on expanding your knowledge about investing. Financial literacy is the key to managing your finances wisely.

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