The whole year of 2020 has been quite a year to remember as economic activity has been disrupted on many levels from small businesses to banks to whole nation-states.
After China implemented its lockdown procedures it seems like everyone just followed one country after another until pretty much all economic activity has seemingly ceased.
It is at this point that many people have now started digging into their savings. Those without savings or not enough had to rely on government relief packages just to get buy.
Philippine economists predict that it’s in 2021 that the country is expected to bounce back after suffering its first recession in 29 years. It’s no joke when things go on a lockdown and that’s why it is imperative now that families need to start taking into account all of their finances and manage them properly. But how can your family do this?
Categorize Your Family Expenses
This is probably the most obvious but just like new year’s resolution, sometimes it is never followed. It is important to know that there are 2 types of categories.
Fixed – A fixed expense refers to all expenses that are expected to be paid regularly, these are obligations like utility bills, taxes, repayments for personal loan no requirements, rent, insurance, etc.
Variables – After the fixed payments, comes the variables. These are things families spend on that may or may not be crucial. This is where a lot of overspending can occur depending on the season or occasion. So it is important to break down this category even further down and weed out what is more of a luxury than an actual necessity.
Study How Money Comes and Goes
This process is fairly simple to do but can be difficult to implement. What families should do is to make a list of all the items they pay for and decide which of those items are important. Also, it’s a good idea to make a summation of the total expenses.
This should give the family a clue of how much they are spending. Is the family spending beyond their means? This is where they’ll find out. In the processing of elimination, this is where lengthy debates can happen between family members as some may not want to give up an unneeded expense, especially if it’s some type of addiction like smoking.
Yes, every stick costs a small but in total that’s a lot in a year. Add to that the potential for future medical expenses caused by smoking. Everyone should be on the same page on the chopping block. How much to spend on food, clothes, luxury items, monthly bills, etc.
Compute the Family Income
The total income of the family will determine how much they can spend or how much they should save. Typically, employees receive salaries on a determined schedule. Those running a business pay for business expenses before paying themselves.
It is important to calculate the average income of everyone with a job. Those who are paid twice a month or weekly can simply add these. Those with irregular wages should total their income from the last four months. Divide this by four to get the average.
Look for Alternative Income Sources
Just because everything is locked down doesn’t mean everything stops. What we have today that people 100 years ago didn’t have during the Spanish flu is the internet. While the physical world is disrupted, the internet is still moving.
If anything, it’s more active since many businesses and transactions have transferred there. People can invest in an online business like stocks. Invest in lending firms like Robocash, for example. In a way, the lockdowns have somewhat helped people save on expenses by working at home so that’s a good way to use funds in moderation.
We mentioned earlier something about figuring out if the family is living beyond their means. Well, this can be done by simply taking the total of all expenses spent every month. Then take the total income of everyone in the family. Take the latter and subtract it from the former.
If the answer is close to zero then you are barely making it. If the answer is less than zero then you are living beyond your means which means you have to start cutting some things out. If the answer is very positive then you are still covered.
As an example, if your family has an income of PHP 60,000 but your total monthly expense is PHP 30,000 then you are doing great. That extra thirty grand should keep your family afloat as long as you take care not spend it unnecessarily before the next salary.
Remember the old days when frugal family members kept coupons? Well, that certainly hasn’t changed. Many companies offer these out there, especially in this tight economy. You can bet companies will do anything to entice customers to subscribe to their service or purchase their products.
So if you manage to snag up a coupon code, you might want to use that when buying something online. Each percent discounted will amount to plenty of savings in the long run.
Shared Use Concept
Since the beginning of online work and classes, items like smartphones and laptops have become a need. There’s no need to buy a phone for everyone, it’s time to dust off those old last generation phones and start using them.
If you still have one of the tablets for 2012, those can still be used for online learning. Avoid buying new if possible, especially when it comes to gadgets. Also, sharing. If there isn’t enough equipment to go around, it’s best to share between family members.
Once you’ve done all the math and did every step to minimize expenses and for some reason your budget still can’t make the cut, then you may need additional funding and that’s where Robocash can come to your aid. The loan tenure allows for adjustments, thus, giving borrowers enough time to catch up to their repayments.
If you need emergency cash now, you can take out a loan for a period of 7 to 30 days. Loan amounts range from 1,000 to 25,000 pesos for any of your expenses. Robocash loan is available to all Philippine citizens from 21 to 70 years old with a stable income.