Financial Management: Savings

Savings, Investments and Insurance.

What are these and How do they affect our Financial Capacity?

Is there a Recommendable System for us to Manage our Finances?
Part I

Income - Savings = Expenses

How much income do you earn?

What are the things so budget for your expenses? How big or how little goes into your savings? 

Income is defined as an economic wealth that is generated in exchange for an individual's performance of agreed upon activities or through investing capital. Income is consumed to fuel day-to-day expenditures. 

It is a word that Can Mean a lot to a person. One can spend his income for going to the beach, eating in a fine dining restaurant, buying a new shoes or a book. It can also be spent by paying the electricity bill, providing allowance to your child or simply buying food for your daily needs. Each person have different standards of living depending on how much income do they have. The higher income you have, the more things you can buy or purchase. However, this Income should be spent wisely. Having an Income means having the ability to spend and to save. If you spend, you use your income to have a goods or services in return which you can use in the meantime. In saving, you put the money you earn into a tool or a system that in the future can have gains, losses or be retained. 

So how does one manages his or her income? Here are two Cases:

Case 1

Mary works as a Call Center Agent in Ortigas and earns 25,000Php monthly. She usually have good times with her friends on weekends, gives a part of her income to her parents and shops for new clothes regularly. At the end of the month Mary usually deposits 5,000Php to her Savings account.

Case 2

Lei is a Restaurant Staff and makes 12,000Php a month plus her daily tips. When she gets home, Lei puts the tip she had for the day in an Envelope. Weekly, Lei deposits 500Php to her Bank account. She also hands some money to her parents then the rest that are left are for her personal needs. Every month she also puts in the bank the money she had in the Envelope.

Whom do you think handles the money wisely, Mary or Lei? Why?

Here are some tips into saving: Trick yourself into saving

Project J.18

"One Small Change Can Make One Big Difference"