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With minimum wage going up, here's how to make sure you actually feel richer

Article (news)

Aneth Ng-Lim

If you&#x27;re among the minimum wage earners in Metro Manila, you&#x27;ll soon be taking home a little bit more money.Starting July 25, the first tranche of the historic P85 daily minimum wage increase takes effect, bringing the daily minimum wage from P645 to P695, or P50 more. The next tranche of P35 increase may be implemented sometime in 2027. Approved by the Regional Tripartite Wages and Productivity Board, this pay hike is expected to benefit more than a million workers.P85 isn’t enough?As expected, reactions have been mixed. Some say it&#x27;s long overdue. Others argue it&#x27;s still not enough, especially with the rising cost of food, transportation, rent, and just about everything else.They&#x27;re not wrong but there&#x27;s another way to look at it.Instead of asking whether P85 can change your life, ask yourself this: “Can I change what I do with an extra P85 every day?&quot;  I can assure you the answer is yes.Every salary increase, whether it&#x27;s P85 a day or P850 a week or P85,000 a month, is always good news. Not because the amount magically solves your financial problems, but because it gives you a rare opportunity to improve your money habits before your lifestyle catches up.<div>Avoid lifestyle inflation</div>There&#x27;s a reason many people receive raises year after year yet still feel like they&#x27;re living paycheck to paycheck. The raise disappears almost as quickly as it arrives. Financial planners call this lifestyle inflation. I call it &quot;getting used to having more money.&quot;The first month after a raise usually goes something like this. You upgrade your daily coffee. You book Grab instead of taking the MRT because &quot;I deserve it.&quot; You order dessert with lunch. You subscribe to one more streaming service.Each purchase may be small but together, they quietly consume every peso of your raise. By the second month, you&#x27;ve forgotten you ever got an increase.That&#x27;s why I like treating every pay raise like finding money in the pocket of an old pair of jeans. It&#x27;s unexpected. You weren&#x27;t surviving without it yesterday, so you don&#x27;t have to spend all of it tomorrow.<div>What to do with your extra P50 now</div>Here&#x27;s how I would make the most of an extra P50 a day. First, pay yourself before everyone else does. If you work about 20 days a month, that first tranche translates to roughly P1,000 before deductions. Imagine if you automatically saved half of that into savings every payday. You probably wouldn&#x27;t miss it because you&#x27;ve never gotten used to spending it.Yet after one year, you&#x27;d have over P6,000 saved, not counting any interest or investment earnings.  Your 13th month pay will also get a bump, so that’s an extra P1,000 with P500 that can go to your savings.That&#x27;s just enough to start an emergency fund, or pay for an insurance premium, or finally replace that aging phone without reaching for your credit card.Second, use the increase to reduce financial stress instead of increasing your lifestyle.If you have credit card balances or salary loans, putting part of the additional income toward repayment may not feel exciting, but it&#x27;s one of the highest returns you can get. Every peso that reduces interest charges is a peso that stays in your pocket.Third, invest in your future earning power.That could mean paying for an online course, learning Excel, improving your English communication skills, buying books related to your profession, or even purchasing better equipment if you&#x27;re doing freelance work.A one-time investment in yourself can lead to the next salary increase, which is usually much bigger than P85.<div>Enjoy your good fortune</div>I only encourage saving at most half of your increase because you should definitely enjoy some of it. If you save every extra peso while feeling deprived, you&#x27;re less likely to stick with your plan.Maybe set aside 10 or 20 percent of your increase for something that genuinely makes you happy. Treat your family to merienda. Watch a movie together. Buy that bestselling book you&#x27;ve been eyeing.One thing I&#x27;ve noticed over the years is that wealthy people don&#x27;t become wealthy because they receive bigger salary increases. They become wealthier because with every increase in their income, they put in the extra towards investments that become assets that let them make more money.<div>Good news for others too</div>One more nice thing that can come from this is ironically wage distortion. Those who earn more than the minimum wage hike may also benefit from the mandated pay raise.So they’re not left behind, employers will look into adjusting their pay too.  For unionized workers, this will likely be part of the next Collective Bargaining Agreement.While policymakers and employers and union leaders debate the size of your increase, you get to decide what happens to the extra money once it lands in our bank account. P85 a day may not transform your finances overnight but the habit you build with that P85 just might.

Instead of asking whether P85 can change your life, ask yourself this: “Can I change what I do with an extra P85 every day?"

Instead of asking whether P85 can change your life, ask yourself this: “Can I change what I do with an extra P85 every day?"

With minimum wage going up by P85 a day, here's how to make sure you actually feel richer

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With minimum wage going up by P85 a day, here's how to make sure you actually feel richer

Aneth Ng-Lim

Published July 14, 2026 01:20 PM PHT

Read More:

personal finance

minimum wage

wise spending

Aneth Ng-Lim

Paying it Forward

lifestyle inflation

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