The families of today live in a world that has to cope with financial crisis. Anything can happen in the blink of an eye, and even nations with stable economies can be devastated by sudden acts of nature, like Japan. Thus, it is always best to be prepared in all aspects, including our finances. What families need now more than ever is to be “equipped” with the proper knowledge to face all the crises that may come their way, especially those of the financial kind.
The financial solutions that our grandparents and parents tried to instil in us i.e. study hard, get into a good school, get a good job, etc, are no longer applicable today. Today, even those in “good” professions like doctors, lawyers, nurses, pilots, architects, and the like are struggling financially. Times have changed, and families can no longer depend on the same financial solutions as before.
Recently, my husband and I have been able to become more financially literate through a series of enlightening seminars where we learned a lot about how to manage our finances, how to ensure proper protection for our family, and how to make our money work for us through the right investment and savings vehicles.
Here are four ways that can help build your family’s financial foundation:
1. Increase Your Cash Flow Cash flow, according to the Fourth Edition of the American Heritage Dictionary of the English Language, is defined as follows: "the pattern of income and expenditures, as of a company or person, and the resulting availability of cash".
Thus, it is possible to have a big income but little or no cash flow, if your expenditures exceed your income.
This is where most Filipinos (and everyone else too, I suppose) go wrong when it comes to finances. We live in a world where the culture of spending rather than saving is predominant. “I want, I buy” is an attitude that is common among many.
What families can do is to see how their monthly cash flow works and find ways to increase it. Increased cash flow means increased cash that can be saved and invested.
Husbands and wives should look into their family’s monthly income. If your income is just enough to pay the bills, which is the case in most families, try to look for additional sources of income, like taking sideline jobs during your free time, or perhaps even setting up a home-based business. The extra income you earn from these can become seed money for your family’s savings and investments fund.