I was talking to Tim Benet about my cashflow problem and it turns out that I was spending more than what I put into my pocket. It was around 8 thousand pesos more. Im down 8 thousand pesos monthly and I wouldnt have known that if we didnt looked into how much I spend for stuff like transpo, food, gimik. That’s just the tip of the iceberg my friends, we also had to look into the payments made to rent, insurance, loans and the like.

For those of you who are not familiar with the term CASHFLOW, it is the flow of cash. hahaha very simple right?! Lets say I am an employee earning 12,000 pesos a month. But for the whole month you have to spend for the transpo you need to go to work, the food you eat for that day, the rent you pay for the apartment, purchase of clothes, and insurance. If you add all my expenses I spend around 9 thousand pesos for all those things. That just leaves me with 3 thousand pesos to save (or to spend) depending on how mature I am with money.

3 thousand pesos a month….not very big savings in a month.

What if you got fired or lose your job because the company you worked for closed down or quit your job? The monthly income of 12,000 is completely gone but the expenses you have monthly is still there. So instead of being UP 3,000 pesos you are suddenly in the negative 9,000 pesos zone. What will you do? Most logical thing is to look for another job, others find ways to earn for themselves (start a business etc.) But what if, for the time being, you cant find another job and you cant start a new business how long will your funds last to support you? 6 months? 1 month? 2 weeks?

It is a numbers game really, earn more and spend less. It is important for everyone, including students to be aware of their spending habits. We shouldn’t train ourselves or even our kids to be “wage-dependent”, just waiting for the salary every month and not thinking about other ways to make money.

My advice now is to look at your income and expense columns. You might be surprised in the things you find out about yourself and your spending habits. To help you in keeping track of your expenses, visit this website: www.expensr.com it is a site where you can keep track of your expenses, compare with your friends and gives you charts to where you spend your money most. Knowing where you spend your money is the first step in cutting down on your expenses.

Notes on Ken:

I already quit my job last August 2007.