Our income per month is the money we earn per month that we use for saving money, for paying utility bills, for buying food and commodities, for rent, for education, for leisure, for buying goods and services, and much more. How to earn enough for the daily cost of living is not overlooked by parents, and adults alike, for fulfilling our needs, and wants, but also for the betterment of our lives. Earnings or income constitute our cash flow, and is used to balance expenses, and liabilities. When we run negative on our personal budget, we tend to borrow money in a form of debt, work hard, then receive our monthly pay to settle the debt. Our personal budget or home budget is a finance plan that budgets future personal income versus savings, expenses, and debt payment schedule if any. We come up with a home budget based on our income, and anticipate future spending and the estimated savings from past experiences. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses Hence, we wanted a higher income and we plan ahead of how we spend if ever we know how to earn 50,000 pesos a month.
How to Earn 50000 Pesos a Month? Well we have various intent, since the decision of having higher income has many possible reasons from each of us. Other people might need money much because it will mean they can afford more gadgets, and wants. Others may see the increased income as a way to pay for their outstanding loans and possibly to recover from their financial difficulty. Others may enjoy the increased cash flow to save for their emergency fund, to pay for their variable life insurance, and to donate to church. What an amazing idea, right? But how do we execute a plan on how to increase our income to Php 50k every month. Yes, that is every month. Consistency is the key, as our managers and superiors might say at work. When applied to our lives, can we really earn Php 50K a month being employed with our day job providing us Php 18k to Php 25k a month.
A funny facebook video shown above is a viral millenial post, showing a man desperately “resuscitating” or reviving a wallet depleted of cash (just an act, maybe his friend took the video). You will see how days before payday takes the life out of our wallet, as its cash is being spent with little hope of putting money back to the wallet since payday is still days ahead. You must surely relate to this, since we experience running out of money before the pay day. We tend to borrow money from office mates, then scratch our heads that our monthly salary quickly “disappears”, paying debts, expenses, rent, etc.
Tips for Earning 50000 Pesos every Month
Here, we will discuss ways in achieving our goal, that is, to earn 50000 pesos a month.
There are many possible means in achieving this somewhat impossible feat. Fifty thousand pesos or more is hard to earn, if our basic salary is 18000 to 25000 pesos a month. Thanks to the Tax law reform aka Train Law of 2017, we are now able to enjoy higher take home money than before. In the Philippines, the typical tax deduction before the train law is 5% to 32% depending on the salary bracket. That is around 2700 pesos to 3300 pesos take home money not paid to government as tax, but goes to our budget since tax now has effects at higher salary bracket (250000 pesos and above yearly salary). By law, we are required to declare the earnings and income we receive to the BIR. Hence, we will only base our hypothetical computation of needing to earn 50000 pesos a month, and not including the tax yet. You may apply the applicable tax afterwards, but for simplicity we just base the 50000 earning exclusive of tax.
For the sake of providing tax figures if you earn 50000 pesos a month in the Philippines as a FIlipino employee, assuming the monthly income of 50000 pesos in 1 year, and single, with SSS contribution 581.30 pesos, PhilHealth 481.25 pesos, and a Pag-Ibig 100.00 pesos deduction:
|Total Deductions:||1,162.55 pesos|
|Taxable Income:||48,837.45 pesos|
|Withholding Tax:||6,376.11 pesos|
|Net Income:||42,461.34 pesos|
It translates to a take home money of 42,461.34 pesos per month.
For a salary increase to reach a monthly income of 50000 pesos, we look at managers, specialists, or supervisors that has a high base salary that can be around 38,000 pesos to 45,000 pesos. At one salary increase, their salary may reach 50,000 pesos monthly or more. Salary increase is not guaranteed every year, since various companies have different management, financial status, performance evaluation, a merit increase policy. To a non-manager level position, a jump to 50,000 pesos monthly income means building trust, reputation, value, and seniority to your employer, and company. Natural progression of salary increase usually go to 5% year-on-year.
The private sector employees showed a 5% year-on-year salary increase on the average, according to a study by Willis Towers Watson company as of year 2017. Data shows year 2011 average salary increase is 7%, 2012 is 7%, 2013 is 7%, 2014 lowered at 6.8%, 2015 and 2016 both at 6% with past data at lower than 5%.
For this instance, if salary increase is our way of attaining a 50000 pesos salary every month, it will be computed as follows:
|Year||Base Salary||Salary Increase Rate||Salary Increase||Salary per month|
In 15 years, at a continuous salary growth or increase of 5%, you will definitely hit the target monthly earning of 50000 pesos. In case you started earning 25000 pesos with your company at age 25, you will then get the 50000 pesos salary by staying to your current company for 15 years and your age will then be 40. Its good, provided that you maintain a 5% salary increase. However, some companies do not do it. Some companies at difficult times are not providing salary increase. Others just do not even give salary increase. It is either you show them your intent to leave and go to a another company that a salary increase is given. Therefore, the day job we are busy everyday can provide us with a steady flow of income, but is proven based on our analysis that an incremental increase will take time, if not forever. But since there is no forever, according to millenials, we look at option 2.
Passive income is the cash payment, dividend (stock dividends, etc.), etc. we earn from cash flow received on a regular basis. It is differentiated from active income since it involves minimal to no effort in maintain it. Hence, the word “passive” meaning without active response or resistance. There are three broad types of income as defined by US IRS and the world: active income, passive income, and portfolio income.
In the Philippines, there are many investment and additional income options for a typical employee. Of course, there is work involved and investment of time and dedication to attain the regular passive income. Only few embraced the concept of passive income, since the information about these vehicles of extra income is hidden from plain view, and the additional work to succeed is no longer achievable due to lack of time, lack of information, and lack of financial literacy. We share ways to generate passive income from the list below:
Blogging and Creating Writing
Investing at Blue chip stock in the Philippines
Active income is a work done in exchange for payment, which is contrary to passive income, requires active hours of work. After office and including the hours when we are sleeping, there is an extra 6 hours spare time we can use to stay productive. We may try to do extra income jobs or sidelines to boost our earning. We may be able to reach the 50000 pesos income through business income alone, and we may no longer depend on our daily grind to office. Business ideas are presented below, with links to appropriate business plan.
Videoke Rental Business
Sari-sari store or Retail business
For sidelines and ideas if a day job is maintained:
- Freelancing online specially in the field of IT or information technology. English grammar checking, creative writing, and virtual assistance. Popular freelancing sites are Upwork, E-lance, and Freelancer. Check-out list of best freelancing jobs for Filipinos
- Selling goods to officemates, friends, and neighbourhood: selling snacks, make-up, gadgets, processed meat, lunch, clothes, etc.
- Providing services to officemate, friends or neighbourhood: prepaid reloading, consulting, cleaning and laundry service, loans with interests
We want to improve our financial status and become financially independent. Our goals in life must be not around money, but to help our family in achieving stable and healthy living. We may want the extra money like a 50000 pesos income to be able to send our children to good schools for their future, or that we are preparing for a retirement. It is not an issue to earn 50000 pesos, since earning such ample amount of money is through hard work and dedication. We just need to open doors for possibilities, in order to be flexible in our directions and choices. We hope that by providing tips and ideas on how to earn 50000 pesos a month gives positive impact and financial literacy to our readers. On our next post, we will see how to earn say 75000 pesos a month, and the tips on being successful financially. Like and share!