Being smart with your money is hard, most especially when you're handed your very first paycheck. While it is very tempting to blow everything on that fancy purse you could never afford or that new gaming console you've been eyeing, remember that there are more practical ways to make your money last and grow. Here are a few things you can do to maximize your hard-earned cash:
Open a Savings Account
The most common thing to do is deposit your money in the bank for safe keeping. Your employer will normally provide you with a payroll bank account, but you can also opt to open up a savings account in a bank of your preference. Instead of storing wads of cash in a shoebox under your bed, this will allow you to keep your money safe from any untoward incidents. Your money will also grow by earning interest based on the fees allotted by your bank. If you’re looking to open a new account, don’t forget to look at the following:
- Interest Rate (how much your money will potentially earn)
- Maintaining Balance (how much money you have to keep in your account to avoid any fees)
- Balance to Earn Interest (how much money you have to keep in your account to earn)
Get an Insurance Policy
Don't think that getting an insurance policy is only applicable to newlyweds about to start a family; the best time to start working towards securing your future is when you're young and financially independent. There are many options in the market, depending on your current priority. It's best to evaluate what you want to financially focus on before setting a meeting with one of the company's representatives to discuss your options.
If you're looking at getting insurance for the first time, remember: don't rush into it! It's best to do your research and check out the policies offered by the different companies. That way, you can get the most out of your money.
Invest in stocks
Another way to keep your money rolling is by opting to invest in stocks. Traditionally, only human brokers are used, but thanks to the internet, investing in the Philippine Stock Exchange can be done within the comfort of your own home. And if you think that this type of investment is only available for high-earners, there are a lot of platforms available for first-time investors who are not comfortable with providing a large capital: COL Financial (formerly CITISEC Online) allows you to open an account for as low as PHP 5,000, while First Metro Securities and BPI Trade, on the other hand, can give you an investment account for as long as you have an account open with their partner banks.
If you're interested in investing in stocks but are unsure how, the Philippine Stock Exchange has set up the PSE Academy which offers a lot of good resource material along with a list of courses on how to begin your foray into the stock market.
Invest in a mutual fund
Mutual funds are basically companies that pool together money from different investors and invests in various securities like stocks, bonds, money market instruments and the like. A reason why they do this is so that small investors are given access to a professionally managed financial portfolio without having to provide a large capital. There are different types of mutual funds available, mainly based on what type of investor you are and what return you are expecting. If you find investing in stocks a little too daunting, then this may be the option for you.
Most insurance companies offer policies that give you coverage for life, death, health, and accidents, along with investment packages. If you're not keen on setting aside a big amount every month, this is a great way to hit two birds with one stone.
Being financially responsible can be overwhelming, but with the right attitude and knowledge, you can conquer the world of adulthood one investment at a time.
Image from: Photosteve101