6 Best Money Management Apps You Should Have on Your Phone

How many times have you heard of the terms “budgeting,” “money management,” or “saving?” Even here in Balikbayad, we always stress the importance of these terms because we want to see every OFW succeed even after your contract.

To help you with that dream, we listed money management apps you might find useful to help you achieve financial freedom.

Your Bank’s App

Banks like BDO, BPI, and Metrobank have their own app that allows you to access your account anytime, anywhere. Make sure you download your bank’s app because aside from being free, you can easily check how much you have and if there were withdrawals made.

You can check this POST to learn about banks with online banking facilities.

Ipon: 52 Weeks Challenge

52 weeks challenge is popular every start of the year. It gives you an idea of how much you can have at the end of the year when you set aside a specific amount every week. In case you are having a hard time sticking to your saving commitment, then this app could help.

Available to Android users, this app helps you set your financial goal and make sure you stick to a schedule. It also helps you keep track of how much you have, shows you a progress record, and sends you reminders in case it’s time to set aside the amount you promised to save. Don’t worry. This one is free as well.

You Need a Budget

From the name itself, you can easily tell that this app is designed for people who, well, need a budget. Apparently, budgeting is not that easy. This is why this app promises to make budgeting easier for you by providing features such as Goal Tracking, Debt Paydown, and Bank Syncing among others.

You Need a Budget is also free and available for both Android and iOS users.

Splitwise

Are you sharing a house with fellow Filipinos? This can be a good way to augment rental expenses, but how sure are you that everyone is paying their dues?

The good news is Splitwise can help you with that. Available for both iOS and Android users, this app track a particular expense shared by multiple individuals to ensure that everyone pays equally and on time. You can even keep track of those who owe you money and you can also note how much you owe someone.

Home Budget

Every OFW spouse must have this app. Home Budget is designed to track bills, expenses, account balances, and everything else related to home budgeting. There are also graphs and charts to show you whether or not your spouse is exceeding the monthly budget you set.

Similar to other apps, Home Budget is also free and available to iOS and Android users.

Daily Expenses

Let’s face it: keeping track of your daily expenses is challenging. Nonetheless, you have to do it because you need to see where your money goes and make necessary adjustments in your budget for bigger savings. The good news is this app can help to help you become smarter with your money.

The key here is to update the app as soon as you spend, otherwise, it won’t be much useful to you. Unfortunately, Daily Expenses app is only available to Android users.

What are you waiting for? Start downloading these apps as your first step towards financial freedom.

5 Small Businesses You Can Try this 2018

How many times have you heard of the term “financial freedom?” Surely, several times, Here at Balikbayad, we always emphasize the importance of attaining this because we want every OFW to live comfortably even after life overseas.

There are many ways on how you can achieve that. Investing your money in UITF, mutual fund, or stocks is a good option. In case you want something that is more sustainable, you might consider opening your own business.

Check out these business ideas you can try this year, both in and out of the Philippines:

1. Online selling of RTW clothes

Everybody needs clothes because everybody needs clothes to wear. Why not capitalize on that by selling clothes that you can find in the country where you’re working? You can stick to basics – shirts, shorts, skirts, or dress in basic colors. Ask your customers for suggestions and look for them. Who knows, this could lead to something bigger.

Tip: Consider selling clothes and shoes for kids. Mothers are more willing to spend on their children than themselves.

2. Discounted authentic perfumes

Unfortunately, perfumes can be expensive in the Philippines. Malls are taking advantage of the people’s need to smell good, so they charge a higher amount since people will always buy. This can be a good business to start with by offering perfumes that are more affordable.

It would be great if you can find a supplier in the country where you’re working. Otherwise, you can buy perfumes in stores and sell it online for a slightly higher fee (but make sure it is still cheaper than the ones sold in malls).

3. Food catering 

Do you love to cook? Have you perfected several dishes that people can’t stop raving about? If yes, then use your skill and turn it into cash by starting your own food catering business.

You can start by sponsoring food during your get-togethers with the Filipino communities or parties. Leave your contact details so that people can reach out to you. Post your food offerings If you find food catering a bit overwhelming, you can try packed lunches first and sell it to your colleagues. This can be a good start to grow your catering business.

4. Handicrafts

There is something about homemade products that makes it appealing for customers. The idea of turning “junk” into something useful or products crafted by hand will always have a special place in people’s hearts. If you have that skill of making something out of scrap, then go ahead and give handicrafts business a try.

Keep in mind that when you start this business, the burden, time, and effort will fall on you. Maximize your downtime and post your finished works on social media. If the company allows it, consider selling your items to your co-workers. Make sure you leave your contact number so people will know who to call when they want to buy more.

5. Food cart

Let’s face it: starting your own business from scratch can be overwhelming and stressful. If you don’t know where and how to start or still figuring out what type of business you should try, then consider franchising a food cart.

Here’s the thing: people will eat – all the time. Maximize on that by selling food and/or refreshments. Known brands like Potato Corner offer franchise to start-up entrepreneurs like you at an affordable price. Still, the key here is to find a location with high foot traffic so people can see you easily. The best part is your family can manage it even if you are abroad.

READ: What you Need to Know about Franchising

What business would you like to try this 2018? If you need additional working capital, Balikbayad is here to help. Submit your online loan application now and we’ll be happy to assist you with your cashflow needs.

OFW’s Guide to Getting Your First Credit Card

Credit card can be essential these days. Instead of bringing cash, you can pay for your purchases using a credit card (and promise to pay them in full!). Apparently, not everyone can be given a credit card. Credit card companies are closely looking at your background and credit score to make sure that they will get paid no matter what happens. Some companies have even stricter requirements.

Still, this doesn’t mean you won’t be given a credit card. All you need to do is to ensure these three things to boost your chances of approval:

Have a stable source of income. 

This is a must. For credit card companies, it’s not enough that you have a job. What they need is a credit card holder whose income is both stable and steady.

How can you show that?

Your Overseas Employment Certificate (OEC) is enough proof since most overseas work requires two years. Present your employment contract as well since it will show how much you will earn every month. Presenting your remittances can also help you get a credit card approval.

If you have other sources of income such as business or earnings from your investment, then go ahead and present it. Credit card companies will appreciate that.

Open a deposit account.

 

It’s not just enough that you opened a deposit account. Credit card companies need to see that there is regular deposit going on in your account and preferably, with minimum withdrawal.

What you can do is to have a deposit account dedicated for remittances and another account, which could serve as your Emergency Fund. Present your Emergency Fund account since this is always increasing and with little withdrawal happening. Consequently, go beyond the maintaining balance through regular deposit. It is a sign of being financially responsible, which is a big plus. If you can, don’t go below P20,000. Don’t worry. You can do it.

Go for secured credit card. 

You have the option to prove yourself to credit card companies through your income and deposits. If you want the easier way, you can always go for a secured credit card. Mind you, this requires more money because a credit card company will require you to open an account (savings, checking, or time deposit account) and pledged deposit. This pledged deposit will serve as a guarantee for the credit card. The credit line will also depend on your deposits.

Whether you go for secured credit card or just the regular one, you will still be required to comply with the following:

  • Between 21 and 65 years of age
  • Billing statement reflecting your Philippine address
  • Overseas Employment Certificate
  • Certificate or Contract of Employment
  • Work permit or work visa

Tips in finding the right credit card:

  • Go for the bank where you course through your remittances. This will make it easier for you to get approved.
  • Look for a credit card that you can use overseas.
  • Compare annual fees. This could eat up your savings since some credit card companies charge higher annual fees. If you can go for free annual fee, then go for it.
  • Ask for and compare credit card interest rates. There are instances when you won’t be able to pay in full (although this is not advisable!), and high interest rates can be heavy on your budget.
  • Learn about the credit card’s special features such as reward points or rebate.

Despite the convenience and features, handling a credit card requires discipline and responsibility. Take it easy on credit card usage. If you use it, make sure you can pay in full. Remember that a credit card is not an extension of your salary. If you can’t afford to pay the item in cash, then it is best to leave your plastic card behind.

Financial Milestones OFWs Must Attain Before Retirement

OFW life is never easy. Despite earning more (and in dollars too!) and having an opportunity to live and work abroad, you will long for your family and always willing to take the first flight back to the Philippines. At the end of the day, you still want to go back to the country and be with your family.

Unfortunately, it’s not that easy. You might not even consider retirement and willing to work for as long as you can.

Here’s the thing: you can’t work forever. At a certain point in your life, you need to slow down and relax. Before that day comes, make sure you are able to attain these financial milestones:

Milestone No. 1: An emergency fund that could sustain you in times of need. 

Emergency situations – flood, fire, medical surgery, or typhoon – are everywhere and most of the time, these situations will surprise you. Even if you have pension to sustain you, it won’t hurt if you have a fund that could help you last for up to six months. This all-cash fund must also be easily accessible to you, so you don’t have to worry about anything in case of unfortunate events.

READ: Tips on How to Put Up Your Emergency Fund

Milestone No. 2: Living a debt-free life. 

Who wants to live in debt? No one, right? Apparently, debt is like a ghost that will continuously haunt you even in your sleep.

When you retire, you should be able to pay all of your financial obligations or at least set aside a specific fund for that. Keep in mind that an indication of happy retirement is being free from financial obligations. Pay as much as you can while you still can. Avoid borrowing money for the wrong reasons and when you are already close to 60 years old. Consider consolidating your debts so you’ll only worry about one once you are nearing retirement. This way, you can truly enjoy life by the time you cross 60.

Milestone No. 3: A house you can call your own.

A house is a culmination of all your sacrifices and hard work. In fact, it is one of the many reasons why you decided to seek greener pastures and work overseas because you want to make that dream home happen.

Still, a house should be an asset and not a liability by the time you retire. If you decided to buy a house with the help of housing loan, you should be able to pay the loan in full by the time you retire. Make sure that the payment method corresponds to your retirement age so that you don’t have to worry about amortization when you are in your 60s.

Milestone No. 4: A passive yet stable income. 

Many people who retire experience drastic changes in their lifestyle because they don’t have steady income that could sustain them. Don’t let it happen to you. You can still live a comfortable life even if you are 65.

How will you do this? Through investments.

When is the best time to start this? Now.

If you want to retire comfortably, you need to start investing your money in facilities that will provide you a source of cash. You can try mutual funds or UITF for starters since there are fund managers who handle your account. If you are willing to take a risk, investing in stocks is another option. If you are really willing to take a bigger risk for higher return, consider opening your own business.

What are you waiting for? Start working on these goals before it’s too late.

Interested in Franchising? Read this First Before You Invest in One

Let’s say you have a one million in your bank account. How do you plan to use it?

Shopping for your family might be the first thing on your mind, but have you ever considered investing it? Stocks or UITF is a good option, but what about having a business that your family can manage even if you are away? While this is a good idea, starting something from scratch can be overwhelming.

This is where franchising comes into play. Before you say yes to the idea, read this post first to help you decide if this is the right one for you.

What is franchising? 

Franchising is where an individual (like you) or small companies practice and use other people’s perfected business concept. In a franchising relationship, the franchisor or owner of the business concept gives the franchisee the right to use the brand, distribute and sell his products, and implement business techniques in exchange for a franchise fee.

The franchise fee is usually good for one to three years and can be renewed thereafter after payment of renewal fee.

Why franchise?

  • Higher success rate – This is because a franchise is already a proven business model at minimal risk.
  • Recognized brand – The target market is already identified and the brand is recognized by the public.
  • Support is provided – Franchisors have perfected not just the business concept but also techniques and practices that will make the business model effective and profitable. Most franchisors also offer strategies and advice, which they can pass on to their franchisees. Training is also included to help you prepare on how to handle a business.
  • Advertising is included – When you franchise, you also get to purchase, or at least have the right to use the franchisor’s advertising capabilities in order to market the brand. This is essential because most start-up entrepreneurs have no enough money to afford extensive advertising techniques.

In other words, you get to save time and your own money building a business since all you need to do is to follow the already proven business concept. There are no more trial and error, thereby reducing the risk and failure in handling a business.

Any risks or downsides of franchising? 

  • No full control – You need to follow the business model and cannot divert from this anytime you want to. You also cannot easily introduce “gimmicks” to induce more customers, unless your franchisor allows you.
  • Costs to maintain franchise privileges – Apart from the franchise fee that you have to pay, there are franchisors who require payment of additional fees such as royalty fees or a certain percentage from your monthly sales. There are also franchisors who require payment of advertising costs.
  • Success is not guaranteed  – Yes, there is a proven business model, but once it is handed to you, it doesn’t mean you’re all set. The likelihood of success still remains in your own hands and in the amount of time and effort you put into it. Commitment is important, so you have to be prepared.

Despite the benefits of franchising, you still need to be ready since success is not automatic. You have to be prepared because a business is still a business.

Tips on How to Franchise:

1. Choose a franchise. Similar to starting your own business, find something that you are passionate about and suits you best. Identify the kind of product or service you want to offer, check your possible competition, and find out the franchisors offering such product or service you are eyeing for.

2. Go for a brand. Name recall is important in business. This will make it easier for you to market the franchise without paying for expensive advertising costs. Still, more is not always better since you might have a hard time penetrating the market.

3. Legitimacy is important. It is imperative that the franchise is registered with the Department of Trade and Industry (DTI). There are also legitimate franchise groups around, so check if your chosen franchisor is a member of one.

4. Look into the business model. This is important. You are buying the rights to use an established business model. Therefore, ask about support, research and development, and training schedules, and whether these are included in the business model.

Now that you finally decided to franchise, make sure you provide the following documents upon application:

  • Franchising application form
  • Letter of Intent to franchise
  • Site location proposal
  • Business documents like Business Name Registration (from DTI), barangay clearance, and business or Mayor’s permit
  • Payment for Franchise fee, which varies per franchisor

With this information in mind, are you ready to get into franchising? Give it a try. Don’t worry. Balikbayad is here to help.

4 Ways to Get You Out of the Paycheck-to-Paycheck Cycle

Do you often find yourself left with almost nothing every end of the month? If yes, then you are in financial trouble. You might be stuck in the same situation prior to your work overseas, but the difference now is that you are earning in dollars. Still, it’s no excuse to use all of your salary and rely on what you’ll receive the following month.

You don’t have to live from paycheck-to-paycheck anymore. In fact, now is the perfect time to get out of this cycle since you are earning more than what you earn back in the Philippines.

What can you do? Here’s what:

Know your financial situation. 

We constantly stress the need to budget and there’s a reason for it. Still, if you follow budgeting properly and still end up almost empty by the 30th, perhaps it’s time to assess where you are financially situated.

How will you do that? Look into your and your family’s lifestyle closely. Are you constantly sending money and/or balikbayan boxes full of goodies to them? Do you often ride a cab instead of walking or riding more affordable public vehicles? Is shopping part of your budget?

These little things could eat up a lot, which also explains why you are living from paycheck-to-paycheck.

Tip: Make it a habit to list all of your spending. This way, you can check what areas you can cut back and make the necessary adjustments. 

Differentiate needs from wants. 

Needs are non-negotiable – food, electricity, water, shelter, and your kids’ tuition fee. On the other hand, wants are something you can live without – shopping, new phone, annual vacation, Netflix subscription, and the list goes on.

Why should you differentiate? It allows you to prioritize your spending, thereby maximizing your savings. When you differentiate needs from wants, you have a closer look at areas you can cut back and establish alternatives that is not too heavy on your budget. In the end, you will be able to save more, which you can allot for important things such as savings or Emergency Fund.

Practicality is key. 

Now that you established needs from wants, the next thing you need to do is to become more practical.

Practical is defined as “reasonable to do or use.” This means you get to differentiate what is good and affordable for you without spending too much. For instance, you saw the latest Nike basketball shoes retailing at $10, but there is somewhat similar style for half the price. Of course, you need to look into the quality as well since this will define whether it’s a practical purchase or not.

In other words, practicality is about cutting back on luxuries. Look for cheaper alternatives that are of good quality. Don’t settle.

Look for income-generating opportunities. 

It was said that to attain financial freedom, you need to have more than one income stream. That’s true. In fact, you can’t just rely on your existing job, especially if you want to get out of the paycheck cycle.

What should you do then? Don’t be afraid to look for other income opportunities. Take a second job, venture into online selling, rent extra space in your apartment, or do freelance worker. There are tons of opportunities you can try. It’s just a matter of finding something you can be committed to.

In case you need extra cash, Balikbayad is here to help. Send your loan application online for pre-approval and we will get back to you as soon as we can.

Get to Know Debt a Little Bit Better

Debt – how much do you know about it?

For many, debt is evil. It restricts you, prevents you from growing your money, and leaves you under financial obligation for many years. Some even call it as “multo” because it haunts you even during your sleep. For others, debt can be good – as long as you used it for the right purpose.

So, what exactly is debt? What situations led you to being in debt?

Debt, defined. 

According to online website Investopedia, debt is the amount of money you borrowed from another person or entity. Individuals, small business, and even large corporations borrow money from banks or other lending entities to finance bigger purchases they can’t normally afford given the existing cashflow.

There are many kinds of debt:

  • Credit card debt
  • Consumer debt or money your borrowed to purchase or pay off items that depreciate or with no substantial resale value. Examples are buying a new phone or payment of medical expenses.
  • Mortgage debt, which is secured by any type of asset such as house, car, or deposits.
  • Investment debt or a type of financial obligation that you take in order to generate cash flow, free up funds, and build wealth. For instance, you borrow money to purchase stocks or renovate a property that you will put up for rent.
  • Business debt, which is money you borrowed to start a business.

Regardless of the kind of debt, one thing is for sure: you will pay for a specific amount plus interest on a given date. In case you are unable to pay, the lender can foreclose the mortgages asset or worse, file a collection case against you and garnish whatever asset is under your name – which you don’t want to happen.

On a simpler level, why are you in debt? What attitude led you to being in debt?

Sources of Debt

Source No. 1: You spend tomorrow’s income today. 

“May sweldo naman sa katapusan,” you might say. In fact, you feel confident that you can get by every month because you know that you will get your salary. In case you fell short before the end of the month, you decided to borrow money since you can pay it by the 30th anyway.

That is a wrong mindset. Spending money you don’t have yet – even if you will get them at the end of the month – is the reason why you and many other people are in debt. Advancing tomorrow’s income is a big no-no.

Source No. 2: You and your family keep up too much with the trend.

 Many OFW families are guilty of this. Earning in dollars allows you to earn more, which means you can now afford the things you say no to before. Since you are away from your family, the way you could think of to make your presence felt is to send them things they asked you to buy.

What if you can no longer afford it? You take a second (or even third) job. Or you apply for a loan and promise to pay for it by the end of the month. See, it’s a never-ending cycle.

Source No. 3: Sudden change in lifestyle. 

This is in relation to source no. 2. The sudden change in lifestyle allows you and your family to live the life. Apparently, the problem lies when your contract ended and there is no immediate job waiting for you. The bigger problem is you and your family refuse to change your lifestyle and live simply. To afford the things you were used to, you resorted to borrowing – one of the bad reasons for getting a loan.

Source No. 4: You don’t have a defined long-term goals. 

Long-term goals are crucial in attaining financial freedom. It keeps you focused and grounded because you are saving up for something. You become more hardworking as well because you know that after all the sacrifices, you will be able to afford a new house or car. Without these long-term goals, you will continuously live in the present and not worry about the future. This creates a vicious cycle of borrowing and before you know it, you are buried in debt.

5 Steps to Build Financial Freedom Even After Your Work Abroad

There are many reasons why you decided to work overseas – to send your kids to a good school, have a house you can call your own, sufficient savings that will last you for years, and a small business that will sustain your everyday needs among many others. Whatever you hope to achieve, it will fall under one big umbrella and that is financial freedom. 

Here’s the thing: the term “financial freedom” may be easy to spell, but it can be challenging to make it happen. Still, this doesn’t mean you cannot achieve it. It may not guarantee 100 percent success, but these six steps could help.

First, get out of debt. 

At one point in your life, you can’t help but borrow money from lenders. That’s okay, especially if you used the proceeds for important purchases. Nonetheless, if you really want to say that you achieved financial freedom, then you need to get out of debt so you could focus more on savings and investments.

To guide you better, check out this post to help you get out of debt.

Second, set aside a budget for your Emergency Fund. 

Emergency fund is important. You’ll never know what could happen, so it’s better to be prepared. This is essential because you can use the emergency fund in times of, well, emergency.

Ideally, the fund must help you sustain at least two to three months worth of your income. This is enough to help you get through in case of loss of job, sudden expense, and illness among others. Remember, the purpose of the fund is for emergency expenses only. Buying a new phone or tablet is not part of the emergency list.

Here are tips to help you set up your Emergency Fund.

Third, prioritize long-term savings. 

Don’t just settle with having an Emergency Fund. Another fund you need to have is long-term savings account.

It’s not the savings + remittance account you set up before you left for your work overseas. Long-term savings is a separate account that could serve as your Retirement Fund. You may opt for the typical savings account, but you might want to consider long-term time deposit for higher interest rate. You can deposit anytime plus the interest earned is cumulative, thereby allowing you to earn more.

Tip: In case you prefer the typical savings, make sure that this long-term savings account should be in passbook only. Having an ATM can be tempting and makes it easier for you or your family to withdraw, thereby defeating the purpose.

Fourth, make long-term investments. 

They say that to be able to achieve financial freedom, you need to have more than one source of income. That’s true. Opening your own business, no matter how small it is, might be your go-to option, but keep in mind that this could be risky. You are your own boss and managing a business is not as easy as it sounds.

To minimize risk, you might want to look into investments. There are many options – mutual fund, UITF, stocks, and bonds. Each of them comes with its own risk and benefits, so it is best to explore your options and understand them before putting your money into it.

Fifth, it’s time to make those large purchases. 

Ideally, you should be doing the first four steps before you even think about buying your own home or car. This is because the first four steps give you enough time and leverage to invest into something bigger while reducing the risk of losing everything you worked hard for.

Once you achieved the first four steps, go ahead and make that large purchase. Still, take it one purchase at a time. Give yourself a few more years to save up before buying again.

You can do it!

Build Your Wealth with These 5 Simple Steps

Every person in the planet wants to live a comfortable life – a decent place you can call your home, provide quality education for your kids, a stable job or business that provides sufficient money, and food on the table. If budget permits, it would be great if you have investments for added cashflow.

Still, all of these will be possible if you start building your wealth as early as now.

Here’s what you can do:

Step 1: Know your financial standing. 

This is the first step in building your wealth. Before you think about investment and retirement, you need to know where you are first, at least in terms of financial standing.

How can you do this? List down your assets, investments, and source/s of income. And then, divide them into two columns: passive and active income. Active income is something you are working hard for like your monthly income and side jobs. On the other hand, passive income means you don’t necessarily give your 100 percent attention but it is still income-generating. This includes investments (stocks, mutual fund, etc) or property for rent.

Once you established where you stand in the financial scale, it will be easier for you to identify what areas you need to focus on to build wealth.

Step No. 2: Determine your financial goals. 

This is another tricky part. You keep saying that you’ll work hard for your family to buy a house or earn at least a million, but how soon do you plan to achieve it?

To build wealth, it is imperative to determine and define your financial goals and keep it as specific as possible. In line with this, you need to establish how much money you are willing to risk for investment and other methods of income that could help boost your fund. You also need to decide how much percentage of your income are you willing to place in a fund. These tricks will help you determine your financial goals in a quantifiable manner.

Step No. 3: Learn to invest wisely. 

Do you really want to grow your money? Apparently, saving is just one of the many things you can do to build your wealth. You also need to consider investing because it helps increase your wealth.

There are many investment options available, so make sure you explore your options. You can also start for as low as P5,000 to P10,000, which is a good amount to experiment on.

READ: Investment Mistakes You Need to Avoid

Ask if you don’t understand anything since investment can be overwhelming especially for first timers. Avoid borrowing money for the sake of investing since it will take time for you to enjoy your investment and getting buried in debt is the last thing you need. More importantly, diversify. Don’t just limit on one investment option or one stock alone. You’ll never know what could happen, so better be safe and sure.

Step No. 4: Avoid committing financial mistakes.

 

To be able to build your wealth, you need to avoid these common financial mistakes:

  • Living an extravagant lifestyle just because you are earning in dollars.
  • Not setting aside a portion of your income for savings or emergency fund.
  • Giving in to every demand of your family and relatives.
  • Premature acquisition of assets or buying properties without clear and sure payment plan.
  • Falling for investment scams.
  • Practicing pasikat mentality.

Step No. 5: Be wise when borrowing money. 

Loans are not bad. In fact, there are situations where it’s okay to borrow money. It’s how you use the proceeds that puts borrowing in a negative light.

Therefore, be careful in submitting a loan application without thinking twice and evaluating the need for such loan. The purpose must be legitimate such as acquisition of property to be converted into an income-generating asset or to finance a start-up business for additional income. This way, even if you borrowed money, it will be compensated by the income you will earn from the business or property.

Speaking of loan, Balikbayad offers loan facility for OFWs to help you finance your cashflow needs. We understand your situation, which is why we are here to help and make borrowing easier and convenient for you.

To Buy a House or Rent First? That is the Question

Why do you want to work overseas? To earn more money? To provide a better future for your family? To help you pay the bills? OFWs will come up with hundreds of reasons on why they want to go overseas, but surely, you will find a common answer. One of them is to buy a house they can call their home.

The idea of owning a house is exciting. It also encourages you to work harder because of the goal you want to achieve. Apparently, owning a house is not that simple. You have to consider other options such as renting as you save for this house goal.

The question now is this: when should you rent first and when is the right time to buy a house? Read on to find out.

Rent if ….

  • The rent is low and you can afford to pay for it every month.
  • You still don’t have sufficient budget to buy your own house and cover all the expenses attached to it such as additional repair or renovation and buying furniture.
  • You don’t have additional source of income that could help cover the expenses. Check out this post to see some of the side jobs you can do.
  • There is no plan of retiring in that particular area and you can’t even commit to staying there for the next 10 years. This means you set a deadline for yourself and your family that you will only stay there for a maximum of five years, which is enough time to help you save for a new and own home.
  • The place where your family in the Philippines is located is conveniently situated near establishments like school, market, and hospital. Again, the intention is only to live in that particular area for a short-term while saving up for your dream home.
  • There is an intent to relocate and retire in the province.
  • The responsible choice is to wait for a few more years because the cost of owning a house could leave you bankrupt, thereby jeopardizing the future of your family.

Buy if ….

  • You have sufficient income stream that will cover the cost and expenses of buying a home. This means aside from the purchase price of the house and lot, you can also afford to pay new furnishings, appliances, and some minor repairs in your new home.
  • You can afford and keep up with monthly amortization. Take note that this must be paid religiously every month, otherwise there is a risk that the property might be foreclosed and taken away from you.
  • There is willingness to pay for real property taxes every year.
  • There is an intention to live in a particular area for good.
  • You and your family want to be in control of the home, with no landlord limiting you of what you can do in the house, which includes repainting the walls.
  • Privacy and the comfort of your family is among the biggest considerations.

Here’s a tip:

Surely, you want a place you can call your own. To help you save money for your dream home, anticipate the costs that come with owning a new home. Add monthly amortization fee, insurance, property tax, and cost of maintenance, and then set aside an amount equivalent to or at least close to it every month. If possible, open an account specifically for it so you don’t have to use it. This gives you enough time to save up for the house while reducing the risk of availing for a Home Loan.