What You Need to Know about Emergency Fund (And Tips on How to Set It Up)

They say being an OFW is not forever. That’s true. There will come a time when you need to go back home and look for another opportunity to work abroad and sustain your family and their needs. There are also instances when you need to go back home due to existing conflict in the country where you’re working or you will be sent back home due to unforeseen circumstances.

This is why it is important to have an emergency fund – to help you start from something due to events that you didn’t see coming.

Read on to find out everything you need to know about emergency fund, plus tips on how to set it up.

What is an Emergency Fund?

As the name suggests, an emergency fund is an account specifically for unforeseen, unplanned situations. These situations could be a major illness, loss of job, or a major expense. Experts suggest that regardless of your socio-economic class, everyone needs an emergency fund because you will never know what will happen.

There are various channels that could help you set up your emergency account. You can open a savings or checking account specifically for that purpose, money market account, or even keep money in a safe (although this is not advisable due to proximity and convenience).

Tips on How to Set Up Your Emergency Fund

1) Think ahead. The purpose of an emergency fund is to ensure that you have something to sustain you for the next few months until you are able to get back on your feet. In setting up your emergency fund, make sure to think ahead. Imagine much it would be, the amount you need to allocate every month, and how long your fund will last (preferably at least six months) and work for it.

2) Make it liquid and accessible. Emergency fund is used for emergency purposes. Therefore, it should be liquid and accessible. Savings or checking account is the most feasible option since both are highly liquid and can be withdrawn easily.

3) It should be automatic. In order to make it work, your emergency fund must be filled regularly. Make your contributions automatic and pay for the amount lost in case you forgot to deposit on certain months. If you can enroll your emergency fund account in online banking, then link it with your other accounts to make transfer easier.

4) Maximize loose change. Only few people would love to carry around a bag full of coins. Make use of those loose change by adding them in your emergency fund. You might even be surprised with how much money these coins could add in your account.

5) Evaluate spending choices. Do you really need to open all the lights when you’re sleeping? Do you always order more than what you can consume and finish in restaurants? How many times do you have to take the cab than ride the train or walk? These simple acts seem harmless, but you end up paying more. Take a look at your spending and lifestyle habits, get rid of wasted money, and contribute it in your emergency fund.

More importantly, let your emergency fund be. Let this fund serve its purpose and don’t use the money to cover for your family’s material expenses.

4 Reasons Why You Need to Apply for OWWA Loan

Being an Overseas Filipino Worker is not forever. No matter how long you work abroad, there will always be a bigger possibility of going back and settling in the Philippines. If you happen to work in countries that are experiencing war or political conflict like Syria, the Philippine government will order mandatory repatriation, forcing you to go home.

To prepare for that, many OFWs decide to open up their own business, no matter how small it is, to help them earn money for the family. Apparently, not many OFWs have enough capital that will help in starting your own business.

This is where OWWA Loan Program comes in.

1) A reliable business partner. The government recognizes the hard work of all OFWs. Despite earning in dollars, they know that you will need extra help when the time comes and you will decide to open your own business. The The OWWA Loan for OFW helps finance your business needs for up to P2 million so you can get back on your feet and have a sustainable source of income for your family. This way, you don’t have to go back abroad to work.

2) The Enterprise Development Training. Apart from the amount you will receive to finance your business, you will be required to undergo Enterprise Development Training or EDT. In fact, this is one of the mandatory requirements you need to comply with to get your loan approved.

This training covers what you need to know about starting, managing, and sustaining a business. You will also have project-specific training or immersion according to the business you plan to put up and make a business plan, which will be submitted together with other requirements for OWWA Loan. The EDT ensures that you are equipped with the necessary knowledge and skills to help you succeed in your entrepreneurial journey.

Read more about EDT here.

3) Variety of business allowed. Another good thing about OWWA Loan is that it is applicable to various kinds of business. Construction, rental services, service or trading, franchising, transport, and health care are among the allowable businesses. Aside from that, you will also have a better understanding of your chosen field through the Enterprise Development Training.

4) Specifically tailored for OFWs. There are various banks and lending institutions that have facilities for OFWs. Apparently, there are few that caters to OFW and their business needs. The Philippine OWWA Loan is one of them and it is intended to support every OFW’s ability to succeed in the field of entrepreneurship.

Keep in mind that OWWA Loan for OFW is there to assist you in starting your business. The success will depend on you, so make sure you choose a field that will suit not just your needs but your interests as well.

6 Pasalubong Tips and Tricks for OFWs Going Home

“Uy, pasalubong ah!” 

How many times do you have to hear this phrase every time you go home for a vacation or during Christmas season? Surely, a lot of times. Whether or not it’s the season of giving, giving pasalubong to your family (and even relatives and friends), is mandatory and expected. After all, you are earning in dollars.

Does this mean you should use a big chunk of your money buying the latest gadgets and other material things to keep your family happy? The answer is NO.

Here are tips you need to remember when buying pasalubong for your family members:

1) Always set a budget. This is the first step you need to do when buying something for your loved ones back home. Setting a budget allows you to take note of your expenses without hurting your wallet. Just make sure you will stick to it since what’s the purpose of setting a budget if you won’t follow it?

2) Make a list. Apart from making a budget, a list would help you a lot in shopping for gifts for your family back in the Philippines, especially if you belong in a big family. A list helps you keep track of what to buy and its corresponding receiver; thus preventing you from missing out people.

This leads you to the next pasalubong tip.

3) Consider the preference or interest of your recipient. Each person in the family will want something that is different from the others. Instead of guessing and assuming, it is best to ask your family about what they want to receive from you. This way, you are sure that what you gave is appreciated and the money you used to buy it won’t go to waste.

4) Buy something meaningful. It is easy to buy generic things like keychain, refrigerator magnets, or purses for everyone. The question is will they like it? This is why it is important to ask and make a list because you want your family to appreciate what you gave. At the same time, you are sure that they will use it and not just toss it somewhere in the house.

5) Don’t make promises you can’t keepYou know what your kids want and your mother even requested something from you for the first time. While buying something for the family is a good gesture, do not make promises if you can’t buy them. Be honest about your finances and remind your family that you might not be able to buy everything because you are on a budget.

6) Never feel obligated to give. Pressure will always get into your system and feel obligated to buy something for your family and even extended family. Bring yourself back to Tip No. 1 and remind yourself why you are working overseas. It is not your responsibility to fulfill the material needs of everyone in the family just to keep them happy. Set aside something for yourself and for your future instead of focusing on material possessions that will fade, deteriorate, or get damaged overtime.

Learn to Say No: 5 Tips on How to Handle Your Extended Family’s Requests

“Baka pwedeng humiram ng konti, pang-tuition lang ng pinsan mo.” “Okay lang ba pautang? Bayaran ko kaagad. May sakit lang kasi si Tito Junior mo.” “Kumikita ka naman ng dollars diba? Hiram sana ako kasi nagipit kami sa upa. Tutal naman kami nag-aalaga sa nanay mo.”

These seem familiar, don’t you think? If you are working overseas, you will often find yourself hearing these statements not just from your immediate family but also your relatives. By relatives, this means tito, tita, cousins, grandparents, nieces, nephews, and other people that are not your siblings, parents, spouse, or children.

Since you are earning bigger, your relatives expect you to “support” them, whether directly or indirectly. You are now the designated breadwinner of the entire family. Surely, you don’t want to be labeled as selfish and you want to save yourself from guilt, so you give in – even if it means using a chunk from your savings. The challenge now is how to say no without hurting their feelings.

Here’s what you can do to limit your remittances to your extended family and achieve financial independence:

Tip No. 1: Remember why you are working abroad.

There is a reason why you are working abroad. It could be saving for a better home, helping your younger siblings to finish school, or preparing for retirements. Whatever your reasons are, keep them in mind and never forget. These goals will be your guide and constant reminder that you are working for yourself and your family’s sake and not for everyone else.

Tip No. 2: Never mind the pressure.

Admit it. Getting that Facebook message from your aunt asking if you could lend her money can be dreadful. As much as you want to say no, you feel the pressure to make a quick decision and say yes – even if it means taking a chunk from your savings.

Don’t let pressure dictate your decision, which leads you to the next tip.

Tip No. 3: Decline respectfully. 

Saying no must be done in a proper and respectful manner. After all, relatives are relatives and they can be someone you can rely on, especially if you are overseas. Instead of shouting at them or a writing a big “NO” on Facebook messenger and blocking them after, decline nicely. Explain in a nice manner why you can’t lend them, which brings you to this next tip.

Tip No. 4: Be firm about your decision. 

Surely, your tito and tita will constantly bug you to lend them money until you give in. Once you say no, make sure to be firm with your decision. Don’t let pressure get into your head and give in to their demands. Further, tell them that as much as you want to help, you are not in a better position to lend them money.

Tip No. 5: The “No Loan” policy must apply to everyone. 

There will always be a favorite tita, cousin, or niece in the family. On the other hand, you have relatives that you just can’t stand. Regardless of their place in your heart and judgment, make sure that the “No Loan” policy applies to ALL relatives. Lending money to one relative and saying no to the other could cause conflict in the family (and a discussion in the future) – and you don’t want that to happen.

You might say it is easier said than done. That’s true. Once you start to be firm with your decision, you will start not feeling responsible for covering and paying for your extended family’s finances. Think of yourself for a minute and remember why you are working overseas.

6 Tips on How to Handle Your Credit Card Wisely

Are you thinking of applying for a loan, whether personal, car loan, or a home loan? Before the bank approves your application, they need to make sure that your credit standing-slash-capacity to pay is exceptional. One of the best ways to prove and boost your credit standing is by applying for a credit card – and making sure that you use it wisely.

Here are top tips and tricks to help you use your credit card the right way: Tip No. 1: Get a credit card that suits your needs. 

Despite the “Mastercard” or “Visa” on your credit card, banks these days offer various credit cards to cater to specific needs. Explore your options and choose a credit card that is best for your needs. In this case, consider BPI Family Credit Card or Security Bank’s Complete Cashback to help you stretch your cashflow.

Tip No. 2: Set a monthly limit – and make sure to stick to it. 

It is tempting to spend, now that you know you have a card to back up your purchases. Apparently, banks look into your spending and if they see that your purchases are greater than your payment, then you might be at risk of getting your loan declined.

Therefore, set a monthly limit and stick to it. This limit should depend on your capacity to pay in full. If you hit your limit, cut any form of spending until the next month.

Tip No. 3: Remember: Your credit card is not an extension of your wallet. 

Keep in mind that the amount swiped on your credit card is equal to the amount you have to pay come billing time. Don’t overspend.

Tip No. 4: Always pay on time and in full.

Have you seen the term “Finance Charges” on your billing statement? That means “interest” in addition to your purchases and you will constantly have it every month unless you pay the amount in full. The worst part is this finance charge keeps adding up, thereby making your total amount due bigger. To avoid that, pay in full and on time.

You might also consider setting an automatic payment for your credit card to avoid the hassle and getting charged for interest or late payment fee. This is why it is important to set a limit so you don’t have to worry about bills eating up your savings.

Tip No. 5: Review your credit card statement all the time. 

Is your credit card providing charging the right purchases? You’ll never know if they do unless you check your statement as soon as you get them.

Therefore, make it a habit to review your credit card statement and make the necessary adjustments when needed. Aside from ensuring the right charges, reviewing your statement allows you to see where your money goes and help you adjust your spending pattern.

Tip No. 6: Keep your credit card secured. 

From the time you get your card, make sure you sign at the back, list your credit card number, and save the hotline number of your credit card company. This will make it faster for you to notify the bank in case your card was lost or stolen.

Consequently, keep your credit card information to yourself. You don’t want people stealing your information and make you pay for their purchases, do you?

Owning a credit card entails responsibility. The challenge now is how responsible are you in using your credit card. The choice is yours.

7 Things You Should Know About Agency-Hired OFW Compulsory Insurance

According to the Merriam-Webster dictionary, insurance is “a coverage by contract whereby one party undertakes to guarantee or indemnify another against loss by a specified peril or contingency.” In other words, insurance can be your form of guarantee if something happens to you.

Admit it. Insurance may be the last thing on your mind right now. With the expenses back home and the pressure to save for the rainy days, getting an insurance is not your priority. Believe it or not, there is a facility called Agency-Hired OFW Compulsory Insurance (OCI) and here’s what you need to know about it:

1. Also known as Compulsory Insurance Coverage for Agency-Hired Migrant Workers, this facility is made available by law in order to provide protection in the form of insurance to Overseas Filipino Workers.

2. This insurance coverage is mandatory for all agency-hired OFWs or OFWs who availed of the service of a recruitment agency authorized by the Department of Labor and Employment. An Overseas Employment Certificate (OEW) will not be issued without an insurance proof cover. Nonetheless, re-hired, direct-hired, and name-hired OFWs can avail of insurance coverage.

3. There is no need for you to apply for this type of insurance. Your recruitment agency applies this kind of insurance coverage on your behalf.

4. Below are the benefits you can avail of if you have Agency-Hired OCI: 5. Here’s how to file a claim for Agency-Hired OFW Compulsory Insurance:

  • OFW, the beneficiary, or OFW’s recruitment agency must notify the Agency-Hired OFW Compulsory Insurance provider. The telephone number of the insurance provider can be found in the OFW’s contact card or proof of cover.
  • The recruitment agency must assist the OFW in processing the claims.
  • Fill out the Claim Form provided by the insurance provider.
  • Submit the necessary documents to the insurance company. This could be Death Certificate, Medical Certificate, Medical Report, Police Report, and government-issued IDs necessary.
  • The insurance company will evaluate the claim and establish the amount due.
  • The insurance company must pay the OFW/beneficiary within 10 days from filing of complete documents.

6. The Insurance Code does not specify a minimum or maximum amount of insurance premium. This encourages competition among insurance companies for bigger savings and better insurance services.

7. The recruitment agency should pay for the insurance premiums and not the OFW. The OFW should not, in any way, pay for the insurance premium whether directly or as salary-deduction.

Different Loan Facilities Available for Overseas Filipino Workers

Who doesn’t need money? Regardless of the currency of the money you are earning, everybody needs cash to pay for the rent, buy food for the table, and send the kids to school. Because of this need for cash, banks and other lending institutions came up with different facilities that will suit your specific needs.

This includes:

Personal Loan 

As the name suggests, this type of loan allows you to use the funds for whatever purpose. A personal loan allows you financial flexibility, which is why it is often turned to as a source of quick cash, especially during emergency situations.

Banks and other financial institutions offer different types of personal loans, depending on the borrower’s needs. You can use the funds to pay for medical bills, tuition fee, home improvement, for vacation or travel, to sponsor special events, or even to buy furniture or gadgets.

The good thing about personal loan is that you get to enjoy low interest rates, flexible monthly terms that ranges from three months to 36 months, and limited collateral (for instance, time deposit). On the other hand, the amount of loan is limited, with some banks allowing up to P1 million only. Nonetheless, you can borrow as little as P10,000.00

Car Loan 

If you are looking for a vehicle, whether brand new or previously-owned, then lending institutions can help you get one through Car or Auto Loan.

Compared to personal loan, auto loan lends you money for the purchase of your vehicle, which you need to pay within three to five years, depending on your arrangement with the bank. You get to enjoy low interest rates as well, although you might have to pay higher monthly amortization if you will buy a previously-owned vehicle.

Home Loan 

Do you want a place you can finally call your own? In that case, a housing loan facility is best for you.

A Housing Loan allows you to buy a newly-developed lot, a residential house and lot or condominium unit, or to pay for the construction or completion of a residential unit. You may also opt for a Housing Loan to refinance an existing home mortgage or to improve or renovate an existing property.

Unlike Personal and Auto Loans, a Housing Loan can be heavy on the budget. Housing Loans are long-term loans that you can pay within 15 years or less, depending on the terms agreed upon with the bank. This type of loan facility also require mortgage, which is usually the property you are planning to acquire or renovate.

When applying for a Home Loan, it is important to compare the rates and payment terms offered by various banks. You can also check SSS Direct Housing Facility Loan or Housing Loan from PAG-IBIG to get you started.

Business Loan 

Surely, you don’t want to work overseas forever. As much as possible, you want to settle in the Philippines with your family and open up a sustainable business, no matter how small it is.

In that case, you can consider getting a business loan. This will provide you enough capital to get you started and open up and grow your business. The loanable amount, which ranges from P100,000 to P2 million, may vary depending on your security.

Before you apply for a loan, identify your needs and establish the goals you want to achieve. This will make it easier for you to determine the kind of loan facility that will suit for your needs.

6 Money Tips for Single and 20-Something OFWs

Being single and in your 20s may be the best time of your life. You can do anything you want and not worry about anything. Apparently, if you are one of the thousands of Filipinos working overseas to help provide a better life for your family, then being single and in your 20s calls for bigger responsibilities. In fact, you hold the title of being the “breadwinner,” who constantly have to send money for your siblings’ tuition fee or your father’s medication.

The question is this: do you really have to work abroad for the rest of your life to sustain your family?

Here are money-management tips you need to remember to help you thrive and succeed:

1) Set a deadline for your OFW life. 

There is nothing wrong with being an Overseas Filipino Worker. Still, this doesn’t mean you have to be one forever. Therefore, think long-term and set a deadline for yourself, regardless if you plan to settle down abroad. This will give you a sense of urgency to work harder, mind your expenses, and start investing to grow your money.

2) Always leave something for savings. 

This may seem like a broken record, but always have room for savings. Set aside a portion of your monthly earnings for savings, which you can use for emergency situations. You will never know what will happen in the future and having a savings account can help you get back up in case you got a call to go back home.

Consequently, save for yourself. Being a breadwinner in the family entails a lot of responsibilities, but this doesn’t mean you shouldn’t set aside something for yourself.

3) Spend wisely.  

These two words often go together – all the time. Earning in dollars can be a big deal and tempting at the same time, but this doesn’t mean you should splurge on the latest gadgets or send a big chunk of your salary to your family back home. Keep in mind that the future is uncertain and learning how to spend wisely can help you adjust in case these uncertainties decided to knock on your door.

In line with spending wisely, make sure you eat, breathe, and embrace budgeting. Be firm to your family when you say that you can only send this certain amount every month. You need to save up for the future and you and your family must agree on how much you can spend every month.

4) Explore your investment choices. 

There are tons of investment choices available (learn more about it here). Before you say yes to UITF or stock market, make sure you educate yourself first and know what options are available for you. Research and learn about the ups and downs of each investment choices you can try then decide the best option for you and your family.

5) Don’t be scared to say “No.” 

Admit it. Despite alloting certain amount for your savings, you often find yourself sending money to your family back home. Your tito felt short with his monthly amortization and your brother needs to pay for the graduation fee. They’re family, so how can you say no, even if it means working double shifts or taking another job just to make up for it.

The truth is you should learn to say no – and it’s okay. Earning in a different currency doesn’t mean you always have excess cash on hand. Every centavo equates to your hard work and sacrifice, which your family has to understand. Otherwise, you might be forced to look for other means just to keep them happy.

6) Remember yourself. 

At the end of the day, you are working not just for your family but also for yourself. There’s nothing wrong with helping family, but you should also teach them how to help themselves. Don’t forget that you have your needs and your future to worry about. After all, you can’t work abroad forever.

Working overseas is also a privilege. Make the most out of it by employing wise money decisions and being conscious with your spending. You do want to settle down in the Philippines, don’t you?

How to Boost Your Credit Standing with These 6 Easy Tips

Surely, you don’t want to work abroad forever. Nonetheless, you work hard and save so you can start a small but sustainable business in the Philippines. You are even thinking of getting an OFW Loan to help you jumpstart your entrepreneur life.

Before your loan is granted, banks and other lending institutions need to dig deeper and check your credit standing. This is crucial because your credit standing is one of the deciding factors for the grant or denial of your loan. Poor credit standing equates to outright denial and harder time to get a bank approval, which you don’t want to happen.

Don’t worry. You can boost your credit score with the help of these tips: 1) Get a credit card and make sure to use it wisely.

This is the first and easiest step in boosting your credit standing. This is because it the simplest way to show banks that you are a financially good-paying and responsible borrower. You can show how disciplined you are in terms of making purchases and paying your dues on time, which leads you to the next tip.

2) Always pay in full and on time. 

Getting a credit card is just one part of boosting your credit standing. The challenge is when the bill comes and how much you can pay.

You can come up with tons of excuses – forgetting about the due date, lack of funds, emergency, long lines – and sadly, banks will only see that as late payment, which is not good. As much as possible, pay on time and in full in a consistent manner. Minimum payment is acceptable, but the remaining balance plus interest will be carried over to the next billing statement – and it’s not a good sign.

3) Avoid going beyond your credit limit. 

Here’s the danger of having a credit card: there is a tendency to use it to the last centavo – and more. After all, you can always pay for the minimum fee every month to avoid incurring penalty. Unfortunately, lending institutions frown upon this and consider it as a red flag. This could have a negative effect on your credit score.

If you can’t pay on time, consider paying in installments or better yet, avoid making purchases if you can’t pay in cash.

4) Limit to one or two credit cards. 

Banks these days can be a source of temptation, especially if they see how much savings you have in their bank. They tend to send your credit cards at your disposal. The problem with this is that there is a tendency to use them without paying all your purchases in full at the end of the month. Maintaining three or four is fine as long as you are able to pay in full and on time, which will have a positive effect in your credit score. Otherwise, stick to one or two. This will save you from drowning in debt too.

5) Keep your debts to a minimum. 

In checking your credit standing, banks will look into not just your average monthly deposits in the bank and credit cards but also other past and existing loan facilities with other financial institutions. If you have existing loans, make sure to pay them off or at least keep them to a minimum. You may also consider consolidating your debts or transfer credit card balances into a credit card with lower interest rate.

6) Ask for a raise in your credit limit, if possible. 

Don’t get too excited. Keep in mind that credit reports are based on percentages. This means high credit limit often result to lower credit utilization.

For instance, credit card A has an outstanding balance of P10,000 and your current credit limit is P15,000. You have a credit utilization rate of at least 65%, which is not good. You asked for an increase in credit limit, which the bank granted and gave you P25,000. At this point, you have a credit utilization rate of 40%, which is lower and more acceptable than the 65%.

The rule is simple: pay on time. Otherwise, minimize your debt and an increase in your credit score will follow.