Financial literary will make you rich. You might have heard this a million times already, but this isn’t accurate. The main goal of financial literacy is not for you to become rich, but for you to able to budget your money according to your needs.
I understand that many people wanted to believe that financial literacy is only for the rich, but knowing where your money is going (and documenting it!) is enough for you to start becoming financially literate.
In our today’s blog, you’ll hear me talk about growing your money (if you have any).
Where’s My Money Going?
Tracking your expenses is the basic financial literacy lesson you need to know. Without knowing where your money is going, you’ll never be able to improve your finances.
No matter how much you’re earning now, you should be able to know where your spending every peso of that money. There are so many financial tracking apps out there that you can choose from. If you like to do it manually, the Google Sheet or Microsoft Excel is your best friend. As for me, I’m using an app called MoneyLover for about 4 years now.
Once it becomes a habit, tracking your daily expenses is no longer a chore. If you’re like who loves challenges, you can make it a challenge to make sure you’re listing down your expenses. If all else fails, there’s always an “Adjust Balance” that can solve your problem; just make sure that amount isn’t huge enough.
Always remember that the best tip to increase your savings is to decrease your expenses.
How Can I Make More Money?
Sure, financial literacy is about making do of what you have. However, if you’re barely surviving each month with your salary, you definitely need to increase your source of income or you’ll continue to have problems with money.
I started earning about P18,000 in a month (and I know a lot of people who are earning less) but if I’m still earning that amount now, I will definitely have a problem with my finances. Over time, my monthly expenses have gradually increased and my responsibilities at home are becoming more apparent.
To be able to earn more, you need to know your strengths and figure out if there’s anything there that can be monetized. I figured out that digital marketing is one of the in-demand skills that I can help me increase my monthly income.
In today’s age, a “side hustle” is something that we can explore. Thanks to the internet, there are so many opportunities that we can take. Several students are already earning while teaching in online classes. Some employees are into online selling to increase their income.
A laptop, the internet, and the willingness to learn are what you need.
Where Can I Save My Money?
Consider savings as a monthly expense. Before anything else, deduct your savings from your monthly income.
Then your first goal is to build an emergency fund. This is 3-6 work of your monthly expenses (not income!) that you can use in case you’ll lose your job or a pandemic will happen (again).
Putting your money in the bank is definitely challenging. The interest rate is disappointing. My emergency funds are in digital banks like GCash Save (by CIMB), ING, and Komo by Eastwest. They have about a 3% interest rate compared to banks that are less than 1%.
Once you have your emergency fund, consider having health insurance then you can then explore different investing opportunities.
Always remember: financial literacy is making sure you’re getting the most of how much money you’re earning and making the most of it!
We can talk more about that next week! 🙂