Posted on

How To Manage Finances With Your Spouse At The Time Of Pandemic

As a couple, it is normal to share everything together. This is part of sharing a life together. By sharing, this also includes finances.

Pre-pandemic, you and your spouse have a game plan – you work overseas and send money back home while s/he will attend to your growing family. Then, there’s a side business, too, for additional income.

Unfortunately, the pandemic changed your – and everyone’s – financial game plan. All of a sudden, you were repatriated with only separation benefits on your pocket. Then, you start to wonder what will happen to your family? How can you manage your finances now that you are unemployed?

We hope these tips help:

Tip No. 1: Be Honest About Your Situation

There’s no point in lying or sugarcoating your current situation. At this stage, you need to be honest about what is happening. Have a formal communication where you can both talk about:

  • The family’s current financial situation
  • Any existing loans
  • Other possible sources of income aside from remittance
  • Adjustments to be made by every member of the family
  • Strategies on how your family can “ride it out” until you can go back to your work overseas

It won’t be easy to lay everything on the table but this is the only way. Do not keep any secrets and just inform each other about any money concerns later on when everything blew up to your faces. You need to know what is happening so you and your spouse could create a more effective budget and come up with solutions on how you can address the situation – together.

Tip No. 2: Know Your Needs Before Wants

The pandemic took a toll in everything we know is normal. In fact, it affected everyone, big and small, rich or otherwise.

Now that we need cash more than ever, it’s time identify as a couple what your family needs. These are non-negotiable essentials like food and a place to stay, so make sure budget is allotted for that. Then, make a list of the things and expenses you can dispense with. At this time, needs must come first because this will help you and your family survive the tide.

Tip No. 3: Review Your Finances

Aside from identifying your needs over wants, it’s also a must to review your finances.

Make a list of all your existing loans as well as monthly expenses. This will help you identify which expenses you can eliminate. At the same time, you can check what loans need to be paid first based on either the earliest due date or higher interest rate.

Again, honesty is important to be able to manage your finances effectively. This will also help you devise a proper plan on how to ensure continuity even during the pandemic.

Tip No. 4: Make Necessary Adjustments

Now that you are both aware of the current financial standing, it’s time to make adjustments as a family.

This means you need to forego certain expenses like takeouts or online shopping. You and your family must also be mindful of your consumption, especially when it comes to water and electricity. Adjustments must be collective and not just done by one or two persons. Otherwise, you might have a hard time riding out this pandemic if you stick to your old ways.

In other words, work as a team.

Tip No. 5: Look For Other Means Of Income

You and your family survive with remittance, until Covid-19 happened. Income is limited and let’s face it, money is an issue.

That being said, come up with ways on how you can improve your standard of living. Look for other means to earn money either by applying for job or putting up your own business, regardless of how small it is. You might know someone who is looking for your services, so take advantage of your network.

The bottom line is both you and your spouse, together with the kids, must help each to be able to survive this pandemic.

If you’re looking for an easier way to finance your business, then you should know that Balikbayad is here to help. You can apply online and we will get back to you as soon we can.

Posted on

Dealing With Unemployment At The Time Of Pandemic

The latest data shows that 45.5 percent or 23.7 million Filipinos are unemployed as of July 2020. This is an all-time high considering the unemployment rate last December 2019, which is at 17.5 percent. The highest unemployment rate prior to lockdown was recorded

There are many reasons attributed to unemployment. Apparently, the most obvious of such is the longest-running lockdown that forced people to stay at home and caused businesses to close, initially temporarily and eventually, permanently.

OFWs are also affected. Those who were in their host countries were repatriated since their employers were likewise forced to shut down or suspend their business and lay off “redundant” workers. OFWs who were about to go to their respective host countries were forced to stay home due to the lockdown.

But first, what is unemployment?

For the Social Weather Stations or SWS, unemployment means the worker or employee:

  • Voluntarily left his or her job
  • Looking for a job for the first time
  • Lost their existing employment due to economic circumstances beyond their control

In this situation, the Covid-19 pandemic caused many businesses, specifically Micro, Small, and Medium Enterprises or MSMEs, to close down and stop their operations to minimize business losses.

Worse, no sector was spared. Regardless of where you are in the country, unemployment rate is at its peak, which is at 40-something mark. Women were greatly affected with unemployment rate at 56 percent.

In terms of age group, the younger generation were affected the most. Unemployment rate for those between 18 and 24 years of age is pegged at 63 percent. This age group was followed by those between 25 and 34 years old at 49 percent.

Unfortunately, it’s not easy to find a job as of this writing. The country – and many others around the world – is experiencing recession. This means the economy is gloomy and it will take time before the country gets back on its feet.

What can you do if you become unemployed?

This doesn’t mean there is nothing you can do about this. If you are part of the statistics, then there are ways to help you ride this out and survive.

These tips might help:

  • Claim for Unemployment Benefits

Even if you lost your job as a result of pandemic, employers are still obligated to give you your separation pay and other benefits. Talk to the HR Department and submit necessary requirements to make a claim.

  • Make Use Of Government Assistance Programs

The good news is help is still available. The government, through Bayanihan Heal As One Act, launched several financial assistance programs through various agencies.

Still, take note that not all request for financial assistance will be granted. This will still depend on the availability of funds despite submitting complete requirements.

  • Watch Out For Any Job Openings

Despite high unemployment rate, there are still companies that are hiring. Consider looking into job hiring sites to check if there are openings fit for your skills and work experience.

Online work is also available these days. Make sure you ask around from friends and relatives if they know someone who are in need of your skills.

Looking for a new job could be tiring, but you have to try it, right?

  • Start Your Own Small Business

While waiting for a new job, consider starting your own small business.

A lot of people turned to social media to promote their products or service. You can do the same. The income may not be as big compared to how much you’re earning overseas, but this could be a good source.

Check out this post for small business ideas you can try.

Unemployment is a tough situation to be in, especially at the time of pandemic. Still, don’t lose hope. You and your family will get through this.

Posted on

What Happens If You Cannot Pay Your Loan On Time?

Covid-19 affected everyone’s lives, mostly in a bad way. Businesses are closing. Livelihood is lost. Job opportunities are gone. You find yourself either on your way back to Philippines together with other OFWs who were repatriated or staying in the country – in the meantime – while waiting for deployment.

Since your employment overseas was postponed, you might be worried about a lot of things including the loans you have to pay.

That being said, what happens in case of delay in loan payments?

First, Let’s Define Loan Default

Every loan contract specifies loan details, including loan term and penalty clause. Loan default is when you are unable to pay your monthly loan payments for a certain period. This is different from loan delinquency wherein loan is unpaid for a long time.

Usually, lenders, particularly large banks, give up to 90 days grace period before they can tag a borrower in default. After 90 days and no payment is still given, your account will be classified as “in default.”

When this happens, the following situations follow:

Situation No. 1: Debt Will Pile Up

This is the most obvious effect of non-payment of loans. Your loan is continuous, which means interest will accrue. You also have to pay for penalty fees and other charges, which don’t come cheap. Some charge penalty fee for every day the loan remains unpaid.

This simply means the principal amount won’t decrease but the charges are continuously increasing. Your P5,000 loan could double or even triple and you won’t even notice.

Situation No. 2: Involvement Of Collection Agency

Lenders have dedicated department or group of people in charge of collection. They will send collection statements and demand payment of loans. Apparently, this will only last for a certain time. After a given period, unpaid accounts will be sent to collection agencies, who will now demand payment of loans. Oftentimes, these agencies are more aggressive compared to lenders.

Situation No. 3: Foreclosure Of Assets

One of the worse things that could happen to someone is seeing your hard-earned assets taken from you. Lenders don’t want this to happen, which is why foreclosure through public auction is the last resort.

Sadly, lenders will be forced to take your car or house if you are unable to pay your loan. Still, this is their way of recovering from their losses for lending money.

Don’t be complacent. You will still have to pay for the balance in case the cost of your property is not enough to cover the loan, including additional charges.

Situation No. 4: Poor Credit Score

Credit score is crucial, especially when you apply for a loan. This shows how financially responsible you are as a borrower. The lower your score, the higher the chances of getting your loan application rejected. Even if your loan application is approved, you will be given a higher interest rate.

There are many actions that will warrant a low credit score. This includes non-payment of loans.

Loan Default At The Time Of Pandemic

As of this writing, the Credit Information Corporation urged banks not to declare loan defaults during the pandemic (1). The Bangko Sentral ng Pilipinas also gave banks until March 2021 to reclassify their respective borrowers’ past due loans. This way, borrowers will have time to keep up with payments and prevent them from defaulting.

Still, don’t rely on this alone. If you have existing loans, then talk to your lender immediately. Discuss and negotiate what can be done so you can slowly pay for your debts and avoid being in default.

A debt is still a debt. Even if there is pandemic, you still have to be responsible for your loan. Pay it little by little instead of none at all.