Cashflow Culprit

The Filipino culture says that you take the responsibility when you get your first job. Be responsible with your parent’s retirement and send the next sibling to school. If you are fortunate enough and you are an OFW, send 90% of your income back home. Does this ring a bell?

The latest Standard & Poor Ratings survey says that only 25% of the Filipinos are financially literate. The study says that 75% of Filipinos do not have idea on compound interest, inflation, savings and others.

Today, there is a new breed of Filipinos who would like to change that landscape. There are financial advisers and financial planners (RFP) who would coach you about financial planning, from simple to complex matters. It is always better to have someone guiding or mentoring you.

As for you who would like to know where to start, there are steps you should follow but allow me to share with you the top basic thing you should look at, and that is your cashflow. By making sure that your cash flow is good then you will be able to fund the other facets of your portfolio.

1. Cut Down Expenses

Cutting on expenses is one of the most basic things to do. There might be items in your expenses that are categorized as miscellaneous – those that are not really necessary – and or emergency. Make sure to identify a real emergency, mind you, a Mall wide SALE is not an emergency!

You may start by putting everything on paper your day to day expenses even up to the last centavo and at the end of the month, transfer it on a spread sheet so you can take a study on one month’s worth of expenses. There are also FREE applications for android and iOs devices, and these applications make your life easier.

The purpose of getting down on your expenses is that, you will remove and minimize items that are less necessary or not necessary at all. This is also one way of getting your own personal inflation. When you are able to get your own personal inflation then you will know how much interest rate you should be targeting for the return of your investments.

Increase Your Source of Income

Once you have laid down all your expenses and everything is really necessary, then you don’t have any other choice but to increase your source of income. Increasing your source of income means not only proving to your boss that you are worth a salary increase, but assessing also yourself if your skills still match your current position. Maybe you have outgrown your position and the next higher role should be more appropriate.

If you are still young then you should be adventurous enough to match your skills with the demands in the industry today. If you are no longer relevant to the industry then probably it is time to learn a new skill.

You may also add a part time stint!

Monetize Your Skills

Make an inventory of your skills and talents. Maybe it is time for you to explore that talent you have been wanting focus on. With the opportunities the World Wide Web have created, you will find a place in the market today. Also, the emergence of social media makes it possible to connect to as many people as you want and you can make it your platform to offer your products and services.

If you are good in singing then why not try becoming a wedding singer, probably you are good in hosting or maybe you are good at organizing events, then you can make a business out of it.

If you will monetize your skill, you have to plan on when you will put time on it especially if you are still employed. You have to calendar your activities because it will also be unfair to your employer if you are not giving your best with your full time job too.

Ask Your Employer for Personality Development Programs

Employers are also supportive of the development of their employees. Thus, you may ask your employer of the available personality development programs they have for you. Some companies offer FREE financial literacy workshops, Soft Skills Training and many other training which they think is relevant to their workforce.

Some employers, offer a training loan package at 0% (zero) interest and salary deduction arrangement for so long as it is for personality development and related to the business of the employer. if the training can add value to you and to your employer, then go for it.

By educating yourself, it makes you an informed Filipino Citizen and makes you more productive and empowered. Thus, making you earn more by having a more confident personality, being educated on matters concerning your financials, gives you a clearer mind picture too of where you are headed. .

Improving yourself and your cash flow allows you to think smartly on your day to day decisions. By having a healthy cash flow, it allows you to fund your financial goals such as retirement, wedding fund, major expense and if you are a parent, for educational fund among others. 

Your Cashflow is a culprit because it gives you two opportunities, either you see or you don't see where your money is going, as what Benjamin Franklin puts it:

"Beware of little expenses. A small leak will sink a great ship"