Reference no: EM133176524
Question - Maria Luna, a 25-year-old nurse, works at a hospital that pays her every 2 weeks by direct deposit into her checking account which pays no interest and has no minimum balance requirement. She takes home about PHP9,000 every 2 weeks or about PHP18,000 per month.
She maintains a checking account in the bank that does not earn any interest income with a balance of around PHP7,500. Whenever it exceeds that amount she transfers the excess into her savings account, which currently pays 1.5% annual interest.
She currently has a savings account balance of PHP85,000 and estimates that she transfers about PHP3,000 per month from her checking account into her savings account.
Maria pays her bills immediately when she receives them. Her monthly bills average about PHP9,500, and her monthly cash outlays for food and transportation cost total about PHP4,500.
An analysis of Maria's bill payments indicates that on average she pays her bills 10 days early. Bank Time Deposit are currently yielding about 4.2% annual interest. Maria is interested in learning how she might better manage her cash balances.
What are the three ways for Maria to better manage her cash balance?