💸 You Weren’t Taught This About Money—But It Changes Everything

There is a different way to think about money. Money isn’t just for spending. You don’t have to only save what’s left over. You don’t have time to figure it out later. 

Money is a tool for freedom and security and the earlier you plan, the better your future will be. Most people were never taught how to think about money. We greet it with anxiety and carelessness. 

Everything changes once you start seeing money as a tool. 

In today’s edition, we’ll go over:

• The 5 buckets that money falls into 

• 6 core principles that the wealthiest people use

• Resources to learn more

TLDR;

The Bottom Line

• Everything in personal finance fits into five key categories: income, spending, saving, investing, and protection. Understanding how money flows between these gives you control over your life.

• Track your income, budget wisely, pay yourself first, reduce debt, and build an emergency fund. These small, repeatable actions lay the foundation for financial stability.

• Building wealth isn't about quick wins. It's about planning for the future and making smart decisions today that your future self will thank you for.

The content

Basics of Financial Literacy

Kenton (2023) highlights that your personal finance falls into five general buckets:

• Income: The amount of money that you receive every month. This includes salaries, dividends, and other sources of income. 

• Spending: The amount of money you pay every month for expenses. This includes rent, groceries, eating out, travel, and entertainment.

• Saving: The amount of money left after spending. Make sure your spending is less than your income. You should always have some saved to cover large expenses or emergencies.

• Investing: The amount of money used to purchase assets (like stocks and bonds) to earn a return. 

• Protection: The methods people take to protect themselves from unexpected events, such as illnesses or accidents. Usually takes the form of life and health insurance. 

Why it matters:

Understanding how your money flows through these five buckets gives you clarity and control. If you can see where your money’s going, you can start making it go where you want.

Things You Need To Know To Master Personal Finance

With these buckets in mind, here are some things to know to master personal finance.

1.) Know Your Income

You can’t manage what you don’t measure, so it all starts here: how much money do you really bring in every month? 

👉Include your salary, side hustles, passive income, stock investments - everything. 

2.) Budgeting

Budgeting isn’t just about restricting yourself to the necessities. It’s about living within your means and saving enough to meet your long-term goals. 

👉 The 50/30/20 budgeting method is a very popular framework you can use: 

• 50% of your take-home pay or net income goes toward living essentials.

• 30% to discretionary expenses, such as dining out and shopping for clothes. 

• 20% invested to the future. 

There’s a lot of personal budgeting apps you can use to help. 

3.) Pay Yourself First

Pay yourself first means prioritizing yourself (and your future) before any other spending. Think about your savings as a bill that needs to be paid first. 

This makes sure that you contribute to your savings month after month. 

4.) Limit and Reduce Debt

Not all debt is bad, but anything left unmanaged can ruin your progress. 

👉 Focus on high-interest debt first and avoid taking on new debt unless it supports long-term goals. 

5.) Maybe, Start Investing?

Once you’ve built an emergency fund and paid off high-interest debt, it might be time to start investing. 

👉 Start small. Learn about the local Philippine market and get started there. 

6.) Plan For Your Future

No one else is going to do this for you, so plan for yourself. 

👉 Set short and long-term goals. Build an emergency fund. Get insured. Thank yourself later. 

Why should you care?

Actionable Tips For You

Your future self is counting on you. The earlier you start planning, the easier your life gets later. With the five buckets of personal finance in mind, these tips are simple and doable:

1. Track Every Peso You Earn 

List all your income sources and create a simple monthly tracker to log what comes in. You can use something as simple as Google Sheets to do this. 

2. Build A Budget That Works For You

You can try the 50/30/20 method or whatever budgeting framework works for you. Use free budgeting apps on the app store (or Google Sheets) to make life easier. 

3. Pay Yourself First

Treat your savings like a bill. Automate transfer to a separate bank or GCash account to move money into a separate savings account. 

4. Invest (When You’re Ready)

A lot of people say that investing is only for people with a lot of money. Don’t wait for “perfect” start small and build confidence. Beginner-friendly platforms like COL Financiial or GCash Invest exist to help you learn and navigate the local stock market.

5. Protect Yourself

Make sure you’re covered for health issues, accidents, or income loss. Review your health and life insurance. If you don’t have coverage, look into affordable HMO or microinsurance options.

And of course, plan ahead. Think about your goals over the next decade and take wealth building one-step at a time. 

Stuff Worth Sharing

The Link Lowdown

Ramit Sethi’s I Will Teach You To Be Rich - an easy read for people new to personal finance. 

Common Budgeting Challenges To Overcome - the title is self explanatory. 

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