Currently, we are still in pandemic and most of us are still in some form of quarantine. This pandemic and crisis is far from over, in fact, it has taken its toll.
A month ago, the 2nd quarter GDP of our country was reported and its Negative 16.5. So, officially, we are in a RECESSION, along with other countries around the world.
Now, more than ever, we need to gain financial management skills that will be crucial to our survival.
These are the 4 Crucial Financial Management Skills you Need right now:
1. Skill of Frugality
The first skill I will teach you, is the Skill of Frugality
This is Pagtitipid not being kuripot, it is actually finding ways on how we can live simply.
It is about, Simplifying life.
There are 5 common personality types, when it comes to spending money.
Two of those are considered major personality types, they are Savers and the other one are Spenders
WHO ARE THEY?
Savers are not concerned about following the latest trends. They turn off the lights when leaving the room, shop only when necessary and rarely make purchases with credit cards.
Are you a saver?
Spenders are the exact opposite of savers, they love nice cars, new gadgets, and brand-name clothing. Big spenders aren’t bargain shoppers; they are fashionable and always looking to make a statement.
Are you a Spender?
If you are a SAVER, frugality comes naturally for you. But if you are really a spender, this will become a challenge for you.
But this time presents a unique opportunity to spenders. An opportunity for you to embrace frugality. And if you can be able to build your FRUGALITY MUSCLE.
Build it now because there is opportunity for us to change, because we need to.
And then, consider carrying this SKILL out even after this pandemic and you will see how great the impact would be in your life and your future.
2. Money Jar System
Money jar system is segregating your income to different divisions before you actually save or you spend it.
Question: Do you have Healthy Spending Habits?
When we say Healthy,
Healthy is 50 , 20, 10, 10, 10.
50% (NEEDS) – these are for your needs (this is payment for your house rent/mortgage, electricity, water, and food.
20% (SAVINGS) – would that be your saving and investing for future goals.
10% (WANTS) – these are for your wants. Wants would be things like you use in online shopping, or this might be money you would spend for travel or celebrating.
10% (GIVING) – this is allotted for your tithes or money you give away for others.
10% (EDUCATION) – this is for your self-development and improvement.
Now, because of the financial crisis almost everyone is experiencing today, this will change for most of you. So let’s talk about that.
Ideally, you still want to keep SAVING, GIVING AND EDUCATING yourself, but because of the crisis, you might want to start finding ways to build what is called liquidity.
Liquidity pertains to increasing your accessible cash. Why? Because we do not know until when this will crisis will end.
3. Educate yourself
Now, let’s me expound on the EDUCATION FUND in your money jar.
Let me be clear, this fund is not the TUITION FEE of your kids. This 10% is education for yourself. It is allotted for your self-development, business, financial and professional development. The tuition fee of your kids should be part of the NEEDS.
If you ask me: Why do we need to allot 10% for education?
WHY DO YOU THINK?
Do you want to grow your income annually and regularly?
If you answer YES, then always remember this PRO TIP:
YOUR income will only grow to the extent that you do.
Through educating yourself, you can learn new skills, learn new income generating opportunities. These will open doors for you, so that you will not be dependent only in your profession or one source of income alone.
4. Cutting Down expenses systematically
Now, let’s talk about the 4th crucial financial management still. If you tried living simpler than before and still, it is not enough, then you need to learn how to cut down expenses, systematically.
You might want to start on cutting down your wants.
Because we are all stuck at home, a lot of us can’t go out, there are lots of things that can’t be done. Like travelling, extravagant celebrations and leisure activities. When we things about it, these are part of your WANTS. These things are not crucial for our survival.
So, we can start cutting all of these wants, this will probably give you extra cash.
Next THING TO CUT, is part of our NEEDS.
In cutting down our NEEDS, you need to look for: MONEY LEAKS.
What are these? These are little expenses that when we put together, it becomes significant amount. You may want to look at how you use electricity and water. How do you think you can save from these things?
LASTLY, IF IT STILL NOT ENOUGH…
Then, that’s the time you can cut on SAVING, GIVING AND EDUCATION FUND.
In cutting on Savings – you may still want to continue saving, but instead of saving 20, then you can save 10%, or maybe 5%. The important thing in saving, is not cutting it all together. It is the habit you don’t want to stop.
In cutting on Education fund – You may not also want to cut this down because this will provide you other income opportunities.
But fortunately, there are a lot of webinars and online classes right now that lowered their prices or even offered their classes for free, so make sure you grab the opportunity.
Still, make sure you filter. Not everything that is being offered is good for you. Some are just a marketing gimmick. Make sure you discern which one would really benefit you.
In cutting on Giving Fund – You may still want to continue to give, because, I don’t know why, but the more you give away, the more comes back to you. It’s the law of the universe., it’s even written in the bible.
It is also part of the principle of attraction. Because, you attract WHAT YOU ARE and NOT – WHAT YOU WANT. So, if you are abundant inside because you give, then you attract abundance more back to you.
But if you really need to cut this down financially, then, you can always give your time, service, talents or affirmation to others.
In this time of financial crisis, always remember, it is written in the human history:
It is not the strongest of the species that survives, not the most intelligent; it is the one who is most adaptable to change. – Charles Darwin.
Hang on. You can survive this. This is another story to tell when we all surpass this.
Next week, we will be talking about:
How to Find the Right Extra Income Source for You, at this Time when People are Losing Jobs?
Hanging on with you,
Read more:
- How to Save Money on Utilities During this Time of Pandemic
- A Secret of a Peaceful Life in the Midst of Chaos
- Bloom where you are planted
Latest posts by Pinky De Leon-Intal, MD, RFC (see all)
- Say Goodbye to Chronic Lifestyle Diseases (Hypertension, Diabetes, Cancer, Gout, etc.) with Right Food and Right Water - 23 May, 2023
- Embracing Superpowers: A Mom’s Journey as a Doctor, Professor, and Financial Consultant - 19 May, 2023
- Celebrating the Power of Women: Honored by Philippine Daily Inquirer - 17 May, 2023
