Making cash is very easy; you can wake up in the morning a millionaire. Or maybe you could be awarded a government contract worth trillions.  At times it could be your business bringing in a lot of cash. The big question of how do you handle your finances?

That’s where most investors, entrepreneurs and individuals go wrong. Money is an art that needs to be mastered to know how to handle it. In this article, we’ll provide you with the necessary skills on how to handle cash. Let’s divine in.

Money skills you’ll need in 2021

2020 was a challenging year for everyone, both financially and health-wise. Most people lost their source of income due to the Covid-19 measures. Others faced pay cuts that made it hard for them to feed their families or provide the basic need. 

In the Philippine, the government even stepped in and provided stimulus packages, but it wasn’t enough. We agree no one was prepared for the pandemic, but we need to make a few changes this year, especially when it comes to income and budgeting.

The pandemic has taught us the importance of savings and planning for the future. Here are the 4 necessary money skills to master in 2021. Other way you may visit this site: robocash.ph/articles/emergency-loans

1.      Budgeting  

When one hears about budgeting, they think it’s all about creating a ledge, crediting, and debiting accounts. However, this particular budgeting technic applies to big businesses and organizations.

When it comes to your budget, it’s a simple thing—it all about aligning your monthly income with your expenses. In other words, it is all about how you spend your cash. Do you spend a huge percentage of your income on needs or wants? That’s a question you need to answer when drafting your budget. For an easier time when drawing your budget, we recommend separating your needs and wants. What is the difference between the two?

Your needs refer to the basic things you can’t survive without, including food, education, shelter, and clothes. While wants, are things you can live without. They include vacation trips, a high-end vehicle, among others. 

Now that we’ve clarified the difference between the two prepare a list of all your needs and wants. Make sure you attach the amount of cash each item takes to account for every coin. Once this is done, remove the things you don’t need and stick to the budget. Moreover, there are free budgeting Apps you can download from Play Store or App Store and use.       

2.  Paying off debt

For a financial freedom, you need to take care of your debt. Having debt hanging around your neck is a liability that you can’t afford this year. Once you receive your salary, begin settling your debts.

Start with the ones that have attracted interest over the years and move down to the less pressing ones. We understand paying off debts isn’t easy, but you have to. Do not postpone paying off the debts since they will accrue interest. To determine the amount of debt you are having, we recommend using the 20/10 rule.  

The rule states your debt ratio shouldn’t be more than 20% of your annual income. For example, if you are earning PHP 200,000 (200,000*20/100) 40,000. Therefore, your annual debt shouldn’t exceed PHP 40,000. At the same time, your monthly expenses should not surpass 10% of your monthly income. This rule keeps you in check and helps with settling your debts on time. 

3.      Saving 

Savings are essential, and that is something we have learned the hard way amid the pandemic. Statistics show Filipinos are not great savers due to their poor spending habits. You’ll find one spends more than their income or savings, which leads to a debt cycle. 

To help improve your saving habits, we recommend using the 50/30/20 rule. It’s a simple rule to flow when it comes to saving cash. Here is a breakdown of how the rule works, 50% of your income should go to your needs. Then 30% of your salary is allocated to your wants. Lastly, 20% of your cash goes to savings and settling the debt. 

Though you can come up with your own rule, such as 60/40. In which 60% of your salary goes to basic needs and wants. And the 40 % goes to your investments and savings. It’s vital to note any rule requires financial discipline to be successful.        

4.      Investing

The secrete to having massive wealth and have a comfortable life in the future is investing. Your cash sitting in the bank or a vault is not beneficial to you. Therefore, find ways to invest your money. 

You could choose to invest in government bonds, stocks, bitcoin, or even P2P lending platforms such as RoboCash group and gain interest. Your cash circulating in the economy earns your more income, increasing your net worth. You could even start an online business and sell products such as clothes, among others.

Extra financial aid

However, we understand that mastering the art of financial planning takes time, and gaining new knowledge may require training costs. Consequently, you may need financial support. 

The best place to opt for financial help is robocash.ph/articles/easy-cash-loan. The platform is an online lender given loans within 24 hours. You can request funds between PHP 10,000 and PHP 25,000 at low interest. The lender’s fantastic thing is they don’t require your credit score for the loan to be approved. Therefore, request instant cash from the frim, but borrow what you can repay on time.