“Alkansya” is Filipino for “coin bank” and it is a critical part of the upbringing of children in the Phillippines. It’s very similar to what Nigerian children have as “kolo” or piggybank.
You probably already know where this post is going. What you don’t know, however, is how this applies to you considering that you likely don’t have a kolo anymore.
This post is considered a Filipino reminder that spare cash should not be treated as money for frivolities. It should be seen as an opportunity to reach your financial goals faster.
Growing up, remember how excited we were to put money inside our kolo, and shake it to reassure ourselves that all the money was still there? That is the same energy Filipinos have in aggressively treating spare cash in their alkansya.
Many people don’t use a kolo anymore, because we have replaced it with digital platforms like Cowrywise, but the same energy should be replicated on these platforms.
In this context, “spare cash” refers to money you were not expecting – cash gifts, loan refunds, etc
Here are 4 things you can do with spare cash.
Repay your Debt
This one is quite straightforward and is only wise. It would be irresponsible of anyone who is in debt to spend spare cash recklessly. Spare cash should be used to first pay off any outstanding debt or loans.
Start an Emergency Fund
If you don’t already have one, this is a good opportunity to create one. Emergency funds are even more important these days with how volatile the economy is. People lose their jobs in minutes and are left stranded because they did not have emergency funds. Spare cash is a good opportunity to create one or top it up.
Top Up your Long-Term Savings Plan
Considering that you were not expecting the money, it follows to tuck it away safely in a long-term savings plan. Children break their alkansya at the end of the year and are filled with so much joy at how much they have been able to save. You get the same feeling when your maturity date reaches and you either withdraw or roll over.
Buy More Units of Mutual Funds
Spare cash, like I said earlier should be seen as an opportunity to reach your financial goals faster. Buying more units of mutual funds is a good way to go when you receive cash gifts. You can even decide to invest in higher-risk funds since you weren’t expecting the money in the first place.
Learn more about how to manage your personal finances.
In summary
- Repay any debts you might have
- Start an Emergency Fund or top up your existing one
- Top up your long-term savings plan
- Buy more units of mutual funds
Filipinos are very strict about their children each having an alkansya, and is a very good way to inculcate good money habits in them from the onset.
Watch this video on how to make Alkansya by yourself:
As adults, it would then be a lot easier to transfer these saving habits to the digital platforms we use today. Ready to get started on building good money habits? Begin your financial journey here.
To learn more about how different countries and cultures handle cash, see our #MoneyMap series.
Got any questions? Reach out to us or share with us in the comments.
Really enjoyed this article, I think I should venture into real estate
Great Read! My takeaways are to plan accordingly and have a long-term investment. I’ll keep this in mind.
Building generational wealth is simple, but Nigerian companies, nowadays. Would convert the funds to their personal use.
For example, I started investing in Aims Assets Management Limited, from 2008 to 2014. When the investment matured, the company could not be able to hand over my funds to me: even the shares that I bought, I couldn’t get access to it.
What are we talking about?
If Nigerians, are competent to open a company like Cowrywise. That can manage people’s funds that can turn into generational wealth, it would help many Nigerians to become wealthy in one, two, or three centuries to come.
I hope . . . this would happen in our dear country Nigeria, soon if we have the mindset of managing funds to each individual that would make our generation becomes wealthy people. Then, the records would show that Nigerians are among the richest nations.
Congratulations to Cowrywise for making Nigerians wealthy.
A very insightful article. ?
I learned a lot from this.
Thank you, Ope and Cowrywise Team.
Very educative and insightful read.