How to better handle your finances this 2021

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Metro Manila (CNN Philippines, January 1) — The pandemic has changed the way people deal with numerous things, including how to better deal with one's money.

In an interview with CNN Philippines' The Exchange with Rico Hizon, financial planner Salve Duplito said this is one of the hardest lessons the pandemic has taught people.

"There were so many people who told me if only they had done as I asked them to do prior to the pandemic, then the crisis wouldn't be so bad for them," she explained.

Emergency fund good for a year

With this, Duplito emphasized the need to save up for an emergency fund good for 12 months.

"Not three months anymore, Rico, because of the pandemic we learned kailangan one year na talaga [it should really be worth one year]," said the registered financial planner.

Automating one's savings

Duplito also advised "automating" one's savings, which may be done by using tools that allow transferring a specific amount from one's salary or income every payday to another account for safekeeping.

Whatever is left of the original amount can then be spent without guilt, she added.

How to invest properly

The financial literacy advocate likewise offered three tips for people planning to invest this 2021.

"One, make sure that you're not in debt," she pointed out. "It doesn't make sense to spend thousands in interest tapos [then] earn possibly hundreds in returns, di ba [right]?"

Next is related to a previous piece of advice she gave: ensuring enough emergency funds. This way, she said, one won't be forced to sell their securities in case something happens and the market also happens to be down.

And last but not the least, determine what kind of investor you are as this would define your investment strategies.

"Know whether you're a defensive or an enterprising investor. If you have the time, the inclination is to analyze companies then go pick stocks," said Duplito, adding this process is quite tricky but very rewarding if executed properly.

Beginners, meanwhile, are encouraged to purchase an index fund instead. This allows one to be diversified across the country's best companies with just little capital, she noted.

"[O]ver time, we all know that the numbers, it may go up and down but over time it goes up naman [eventually]," added Duplito.

The public is likewise enjoined to consistently review investment advisories issued by government agencies such as the Securities and Exchange Commission, Bangko Sentral ng Pilipinas, and the Department of Trade and Industry, which Duplito said have been active in issuing such. Investors-to-be may also peruse warnings issued by financial advisers such as herself, she added.

In sum, don't go into anything you don't understand, Duplito emphasized, adding caution is needed when investing as money may disappear quickly.

Starting a business in 2021

For those planning to set up shop this 2021, Presidential Adviser for Entrepreneurship Joey Concepcion reiterated the benefits of going online during the pandemic.

"Kung may maganda kang produktong ginagawa mo sa bahay mo, pwede mong i-testing at pwede mong i-market dito sa mga ibang platforms," Concepcion told The Exchange in a separate interview, with Shopee and Lazada as examples of market platforms for aspiring sellers. Other technopreneurs, he added, are also in the process of setting up additional digital platforms.

[Translation: If you have been making a good product in your home, you can test and market it using these different platforms.]

Sellers should also take advantage of the delivery services offered by the likes of Grab and Lalamove as online shopping remains popular among Filipinos who prefer to stay at home.

RELATED: Logistics, warehousing to enjoy 'healthy' demand in 2021-2022 with e-commerce growth — Colliers 

Social media, Concepcion added, has also allowed for cheaper costs for promoting one's products compared to marketing them on television or print.

"So yung savings nila sa capital expenditure — magpatayo ng mga carts, mga maliit na tindahan — pwede nang dito sa mga digital platforms," he said.

[Translation: Savings on capital expenditures supposedly for the construction of carts or little stores may be used in these digital platforms instead.]