Category: Money Matters

Are you the type of person who resort to borrowing in times of need? Lenders can be helpful especially when the need is urgent. On the other hand, you have to be careful because you don’t want to swim in a pool of debt, don’t you?

In case you are struggling to make ends meet despite earning in dollars, here are some questions you need to ask yourself first before you apply for another loan:

1) Where do you plan to use the borrowed funds?

This is the first thing you need to ask yourself before you borrow money. Surely, everyone has needs with different degrees of urgency. Will it be used to pay for your child’s tuition fee? Medical expenses? Monthly amortization that you forgot to pay last month? Home renovation?

Once you identified the purpose of your loan, ask yourself the next question below.

2) Is getting a loan really necessary? 

Some loans are necessary and acceptable. For instance, it is understandable that you can’t immediately shell out millions to buy a house and lot, so you borrow money first. On the other hand, there are expenses that CAN wait and something you can save up for.

It is important to establish the degree of urgency for that particular expense that requires you to borrow money. If you simply plan to use it for vacation, then don’t you think it’s much better to just save for it first? If the loan is for payment of utilities, then don’t you think it’s better to evaluate your budget and see which expenses can take a backseat first? A loan is still a loan, regardless of where you plan to use the money.

3) What type of loan should I get?

Assuming the need is urgent and necessary, the next thing you need to ask yourself is what type of loan should you apply for to accommodate that need.

There are many loan facilities offered in the market that comes with different rates and benefits. Decide if you will go for secured (requires asset) or unsecured loan (often has higher interest). Go for the loan that is designed to address your specific need to make the most out of your loan.

4) How much should I borrow?

You want to maximize your loan application, but do you really need a big amount for that expense?

Borrow only the amount you need and stick to it. This way, you will minimize the risk of drowning in debt. Take advantage of online loan calculator too, to give you an idea on how much you will pay every month.

5) Can I pay for it? 

This is another important question you need to ask before applying for another loan.

OFW life is not easy. Somehow, you are responsible for all the expenses of your family and at times, even your extended family. Before you apply, check your budget and see if you can accommodate another loan on your list of expenses. Use the amount in the loan calculator as a guide (and add a few hundreds to give you a ceiling) and see if you still have something left for savings every month.

6) Does the loan have flexible payment options? 

What is the mode of payment? Does the loan have online facility to make it easier for you to pay the loan? What about partner banks in the country where you are working?

You can’t physically deposit the payment every month, so make sure that your preferred lender has online facility to accommodate payment. Issuing post-dated checks can be another option, but surely, many OFWs prefer paying online for convenience.

7) Where should I borrow?

Loan sharks are everywhere, taking advantage of people’s constant need for money. Beware.

When applying for a loan, make it a habit to research and find out about the different lenders that offer loan facilities based on your needs. Check interest rates and read reviews about them to help you trim your list. Choosing a lender is crucial because they will be your financial partner in times of need. Choose well.   

Getting a loan can be helpful and beneficial, as long as you know how to use it properly. Take some time to ponder on these questions before clicking the “Apply” button to avoid compromising your financial status in the future.

Do you have a savings account? If yes, then that’s good news. At this point, what you need to do is to keep it updated and work harder to grow your money. Otherwise, you are part of the 86 percent of Filipinos with no bank account and you’re off to a bad start.

There are many reasons why Filipinos don’t have a bank, or savings account in particular, despite the hundreds of branches scattered in the Philippines. Some say:

• Location of the bank is too far from their place
• They do not feel the need to open an account nor transact with banks
• Managing an account and maintaining its minimum required balance can be difficult for them
• Service charge they have to pay since they weren’t able to maintain the required deposit
• They simply don’t want to deal with banks who “favor” the rich

Here’s the truth: banks may be profit-oriented, but they mean well. Just like you, they don’t want risks too, which is why they ask a lot of information to verify your identity. In fact, they can be helpful in times of need. In case you are one of the 86 percent of Filipinos with no bank account, here are reasons why you need to open one as soon as possible:

Reason No. 1: You can earn money by saving. 

It may not be that big compared to other investment products, but having a savings account allows you to earn and grow your money. There are also bank accounts that offers additional interest if there is no withdrawal for the month. It may be P50 every month, but can you find someone who can give that to you – and more? More so, you can’t get that when you leave your money in your piggy bank or hidden under your clothes.

Reason No. 2: Encourages you to save more. 

Being an OFW is not forever. Your employment contract will end after two or three years and soon enough, you’ll find yourself going back home with no assurance of employment. This is why it is important to have a savings account. You are not only able to earn money through interest but also encourages you to save more since the higher the amount, the bigger the interest will yield. More importantly, your money is “hidden,” thereby lessening the temptation of spending it.

That’s not all. Every time you see the amount growing, this will surely keep you motivated to save more.

Reason No. 3: Electronic fund transfer or sending money to your family is easier. 

BPI, BDO, and Metrobank – these are some of the banks that offer remittance facilities to OFWs.  The good thing about this is that coursing your money through banks is safe and you are more assured that your hard-earned money will reach your family back home. You also don’t have to line up in remittance centers since you can do the transfer online. Apparently, this facility is only applicable if you have an existing savings account with them.

Reason No. 4: Easy access to cash. 

Whether you opened a savings account with ATM card or passbook, cash is still easily accessible for you. Lining up may take some time, but at least you know that whatever happens, cash will always be available because your were able to save up.

Reason No. 5: You can easily avail of online services. 

Don’t just limit yourself with online banking where you can check your balance and send money. Now that many businesses are adopting the online trend, access to various services is easier for you. Using your account, you can pay for your family’s utilities expenses and even use online shopping facilities. Just make sure to stick on your budget.

Check out this post to learn more about banks that offer savings account facilities for OFWs.

You know how to prepare your monthly budget. Apparently, that is just one slice of the entire “Achieving Your Financial Freedom” pie. There are several things you need to do such as investing your money and setting up emergency or retirement funds. Nonetheless, it all starts with proper budgeting.

You might ask: how can you strictly stick to your budget when there are such things called “budget killers?” Assuming these budget killers are inevitable, can you do something to make sure that you won’t go overboard?

First, find out what these budget killers are then read on to learn how you can preserve your budget:

The Budget Killers

1) Special Events – This is the number budget killer. Every year, someone in the family will celebrate birthdays, where you are required to send something. Aside from that, there are anniversary, graduation, fiesta, Christmas, and other special occasions where you have to send money to accommodate the expenses. There is also an unwritten rule to send something expensive, especially if you are unable to go home on the specified dates.

2) Medical Expense – You don’t want that to happen, but someone in the family might be sick or has to be rushed to the hospital. You might even be asked to contribute for your extended family’s hospitalization and medical bills since “you are earning in dollars.”

3) Repairs and Maintenance – Roof leaking, car not starting, busted pipes, and the list goes on. This type of expense may not just be unexpected, but also recurring, especially if you didn’t address the issue immediately and install solutions permanently.

4) Utility Expense – Electricity, water, cable TV, phone, and mobile Internet – these are just some of the many expenses you need to pay every month. Even if these expenses are to be paid monthly, the amount varies since surely, your family doesn’t consume them in a fixed basis.

The Protectors 

Here’s the good news: even if there are budget killers, you can do something to still protect your budget and not compromise financial standing. These are some of the things you can do:

• Be wise with your spending. You might be tempted to splurge on items you can’t buy at home. While this may not hurt you financially – yet – there will always be a possibility that you will need those funds for more important things. The key is to be wise with your spending. Buy the basics and save us much as you can before it’s too late.
• It’s okay to tweak your budget. Don’t put budget in a negative light. The purpose of budget is to guide you with your spending, so you can maximize your monthly income. It shouldn’t restrict you to the point of deprivation. Therefore, always leave room for adjustments. Add a few more dollars for each expense instead of declaring the exact amount. Also, review your budget. You might have expenses before that you weren’t able to include when you were first making your budget, so include that.
• Make it a habit to anticipate expenses. This will work for special events. Make sure to plan ahead if you intend to give something on special occasions to prevent you from resorting to loans.
• Think of the future. You will never know what will happen in the future. Still, make sure to anticipate. Set up an emergency fund, save as much as you can, and avoid unnecessary purchases.

There will always be budget killers and sudden expenses, so make sure you leave room for that in your budget. More importantly, save, save, and save. It will go a long way.

Earning in a different currency may be empowering and rewarding for you. After all, you are earning more than what you can earn back home, which means you can achieve financial freedom faster than staying here. Despite earning in dollars or euros, you realize that you are still living from paycheck to paycheck and you barely have nothing left for yourself.

Perhaps, it’s time to take side jobs to help you earn something extra.

Check out these money makers you can do abroad for extra income:

1) Babysitting. There will always be a need to hire babysitters, wherever you are in the world. If your schedule permits, take advantage of this demand and offer your services as a babysitter. Make sure to charge on a per-hour basis as well.

2) Selling, whether online or offline. The possibilities are endless when it comes to selling. You can sell buy and sell small items and sell it to fellow Filipinos. You can also maximize the Internet and venture into online selling. To make the most out of this business, you can choose to buy items in the country where you’re working then sell it in the Philippines. The good thing about this is that there are many platforms that allows you to sell your items for additional income.

3) Commissioned works. Are you good at lettering or calligraphy? What about photography or painting? Do you enjoy making crafts? You can sell your works or have someone commission you to do something for extra income. Make sure to promote your works on your social media accounts, so someone will see it.

4) Food business. Do you love to cook? How about bake? Surely, everyone will enjoy food and eating, so don’t be afraid to offer that service. You can cook and pack viands and snacks, and offer to your co-workers. If you are into baking, you can accept on a per-order basis as well. Who knows, once your food business gets bigger, you can start making party packages or be commissioned to cook during Filipino gatherings.

5) Tutoring. If you prefer being around older kids, then tutoring can be a good side job for you. Don’t just limit yourself with academics. If you are good at something, say an instrument like guitar or piano, use that to your advantage and offer lessons for a fee. It will only take one to two hours, but the return can be rewarding.

6) Money lending. This is where you lend someone a certain amount of cash with interest. Although this could give you a legitimate extra income, you have to be careful on who to lend money to. There are people who would take advantage of this service and nowhere to be found when due date comes. Nonetheless, start small and don’t use a big chunk of your savings for this type of business.

7) Blogging. All you need is a laptop, Internet connection, a good camera, and your thoughts put into words. Still, don’t take this for granted. The World Wide Web is already full of bloggers, so make sure you stand out. Start with a topic close to you, say OFW Life. Offer tips and survival tricks to new OFWs that could help them adjust to life overseas. You can also feature places, tourist spots, where to eat, and the like. Don’t forget to update your blog regularly because once it generates enough traffic, this could give you additional cash.

More importantly, advertise your business or service. Ask help from the Filipino community and make sure you are visible online. This way, potential clients can see what you have to offer and who knows, this could lead to something bigger.

There are many reasons why Filipinos are not investing. Aside from lack of financial literacy, one of the common reasons why Filipinos don’t invest is the lack of money.

What if we tell you that you don’t need hundreds of thousands to start investing. In fact, you can have as little as P5,000 or even P10,000 and you can grow your money in no time – assuming you made the right investment option.

Is that possible? The answer is yes and we will tell you how.

1) Start by knowing and educating yourself about the different investment options available. 

You only have P10,000 and you need to make it work. If you are serious about investing, start looking at the different investment options available that will fit your budget. This includes:

• Unit Trust Investment Fund (UITF) – This investment options gathers funds from different individuals to create a larger fund managed by professional fund managers of the bank that take advantage of economies of scale. This is ideal to help you achieve mid- to long-term goals.
• Mutual Fund – Similar to UITF, but this is often issued and managed by investment companies.
• Stocks – This option allows you to buy shares from a particular company, thereby making you a part-owner. COL Financial is one of the top brokers that allows you to invest in stocks in as little as P5,000.
• Time Deposit – The interest is slightly higher than savings account wherein your money is “put on hold” for an agreed term. Learn more about time deposit here.
• Small Business – It can be in the form of a sari-sari store or starting your own craft or food business. If you are willing to shell out few more thousands, you can be a franchisee.

It is important that you read up and learn about the different investment options to help you not just decide but also understand how they work.

2) Identify your investment goal. 

It’s not enough that you know what kind of investment tool you will use to grow your money. You also need to identify your investment goal or where you plan to use the money you will earn.

Do you plan to open a small business? Do you want to buy a car or house for your family? By knowing your investment goal, it will be easier for you to choose what type of investment you will avail in order to achieve that goal.

3) Choose the right partner. 

Financial partner, that is. There are many banks and investment companies that offer investment products that promise to grow your money. Before you decide on who will help you achieve your financial goals, make sure you check the institution’s background, track record, and performance first. These factors could help you decide whether it is safe to seek help from these institutions in not only securing the money but also making it grow.

4) Add more, if you can. 

Don’t just limit yourself with P10,000. As much as possible, aim high and aim for a little bit more than your initial investment.

Instead of sending 90 percent of your money back home, allow 50 percent only for remittance and the rest for savings and other equally important expenses. The bigger your money, the higher the return will be and the faster it will be for you to achieve your investment goals, which leads you to this next tip.

5) Go long term. 

The secret to growing your money? Aim for long-term investment.

You might be excited to see your money grow, but keep in mind that many investment options such as time deposit is compounded. This means if you place P10,000 in a time deposit for six months with 5 percent interest, after six months, the earnings you will gain will be added on your P10,000. If you wish to continue for another six months, your P10,000 + earning will earn another 5 percent.

The bottom line is this: don’t let that “no or little money” excuse get in the way of investing. No amount of money is too small when it comes to investing – as long as you start early and you choose your investment option wisely.

Parents are the kids’ first teacher. Being their first teacher, you are tasked to teach not only the basic knowledge they will need in school such as letters and numbers but also life skills and values they will need later on in their lives. This includes money management.

If you are an OFW parent, this is something you need to work on with your kids even if you are miles apart. This is because the financial success as a family will depend not just on you and how you save but also how your family, including your children, treat money. You need to impart the value of money on your children not only to allow them to buy what they want but also for their future.

You might ask how. You can try these tips:

1) Always start with a piggy bank. 

You can never go wrong with the good ol’ piggy bank. In fact, this is still the most basic way to teach kids about money and saving.

Give them a piggy bank – and make sure it is something they cannot easily open to prevent any form of temptation. This way, your children will realize and understand how to grow money and at the same time, teach them the concept of saving. At the same time, you teach your kids the importance of safekeeping money.

Tip: Let your child choose his/her piggy bank. This could encourage your child more to fill it up if they like what they’re seeing.

2) Minimize monetary reward. 

Your child helped in washing the dishes or cleaned his room. That means P50 each for every chore done and that will keep your child happy.

It’s okay to give monetary reward to your children for every good deed, but you are not really teaching your kids the importance and value of money. Instead of understanding the life skills you want to impart on your kids, their main motivation is money.

What you can do is to set a positive reward system for every good deed. For instance, every chore done equates to one star and 10 stars mean they can get an item they like that will be included in the balikbayan box.

3) Try delayed gratification. 

Let’s say your son wants a new rubber shoes, which is not yet available in the Philippines. To make up for the time lost, you decided to buy it on your next payday and send a package back home.

Unfortunately, this is not the best way to go. To teach the value of money, you need to practice delayed gratification.

“10 sleeps seem like eternity for them,” you might say. That’s true. What you can do is to make a compromise with your kids instead of giving them what they want immediately. For instance, if they can save P100, you will give them P200 to match their savings. It’s hard to explain, but kids will realize the importance of money if you don’t easily give in to their demands.

4) Make the most out of your vacation by teaching them about money. 

Read stories about money, including stories about successful entrepreneurs who started from scratch or OFW-turned-businessmen. You can also tour the Bangko Sentral ng Pilipinas museum to give them a better understanding of money while showing them the evolution of peso throughout the years.

Another activity you can try is to go to the grocery with your kids. Give them a budget (preferably not more than P300) and let them buy what they want as long as it is within the given budget.

Visiting a bank is also a must if you are in the Philippines. This can be a good way for your child to observe how money is kept and the different products offered to help people grow their money.

5) Keep them involved in the budget. 

Budget is a collective effort and is something shared with every member of the family. Before you leave for work abroad or during your stay in the Philippines, make sure to sit down as a family and discuss how the family budget will go. Listen to what your kids have to say as well and explain why you can’t consider their input, especially if their suggestions are not necessary (for instance, weekly eating out).

Let the voice of your kids be heard.

6) Set a good example. 

Children learn by example. Before you teach them about money and savings, make sure you show them how these concepts are applied in your daily life. Don’t expect them to save if you constantly send them a balikbayan box full of goodies. If you want them to embrace the value of money, show and live a prudent and simple life.

Being a parent is not easy, especially if you are miles away from your family. Nonetheless, don’t use it as an excuse for poor money management. Everything starts from home so be a good example.

There is a reason why your spouse decided to take a leap of faith and work overseas: s/he wanted to provide a better life for you and your children. Since s/he is earning more by working abroad, getting that dream home or setting up your retirement fund is now possible.

Admit it. There are times when you are tempted to spend the money sent by your spouse to buy new set of clothes, shoes for your kids, and even the latest gadgets. “Pwede naman magpadala ulit eh. Minsan lang naman,” you tell yourself.

Don’t be too complacent. The problem with this kind of thinking is that you will constantly look for excuses to justify your spending that you might be surprised finding yourself with little to no money left. Worse, you lose the trust of your spouse, who is working hard just to make sure s/he provides a better life.

What can you do to protect and preserve your spouse’s hard-earned money? Here’s what: 

1) Live a simple and modest lifestyle.

The thought of your spouse earning in dollars excites you. Finally, you can afford beautiful things you never thought you could own. As a result, you upgraded your lifestyle, buying things you don’t really need. Still, keep in mind that every peso you spend is equivalent to blood, sweat, tears, and hard work of your spouse who sacrificed a lot just to provide a better life for your family.

Therefore, live a simple life. Being an OFW is not forever. Maintain a simple lifestyle and use your spouse’s hard-earned money for important things such as savings.

2) Set a budget. 

Here’s how to do it: determine how much money your spouse is sending every month. Then make a list of all the expenses, whether daily, weekly, or monthly and then deduct it from the money you are getting to see how much you have left. Whatever is left must be allocated to savings and investment.

Tip: Check your list of expenses and see what you can eliminate from the list. Make sure to prioritize basic necessities so you can have more budget for savings.

3) Don’t be too generous. 

Common Filipino thinking dictates that when one member of the family is working overseas, the entire family is living a good life. As a result, you are often a prey to your relatives’ needs. They would often call you and ask if they can borrow money or finance their needs.

DON’T GIVE IN all the time. Remember that your spouse is working hard for that money sent to you. Don’t give it away for the sake of utang na loob. Put your family’s needs first before the others. When you are the one in need, they might not even help you anyway.

4) Take it easy on loans and credit cards. 

Loans and credit cards are there to save the day, especially during emergency. (READ: When is the right time to apply for a loan?) On the other hand, there are cases when you need to say no to protect your family’s financial status.

As much as possible, save up for what you need and pay it in cash. Don’t spend the money you still don’t have. If you are not too careful, you might find yourself swimming in a pool of debt and you don’t want that to happen.

5) Keep the kids involved in handling finances. 

Handling your spouse’s money is not just your sole responsibility. Make sure you include your kids, if any, on various ways to preserve your spouse’s hard-earned money. Encourage saving, no matter how small the amount is. Set financial goals that your kids can easily achieve. By keeping them involved, you will be able to grow your spouse’s money in no time.

6) Educate yourself about investment. 

Do you know that common reason why Filipinos don’t invest? It’s because they don’t know or they don’t understand how it works.

The good news is there are tons of information available online that will help you understand how various investment products works. Take advantage of the videos, articles, and courses offered to educate yourself more about the many investment tools you can try. The more educated you are, the better the possibility of growing your money.

Remember that being an OFW is not forever. There will come a time when your spouse will go home or his employment will be cut short and you need to be prepared when that time comes. Save, invest, and live a simple life. These tricks will help you sustain a better future for the family.

Credit card. Personal loan. Salary loan. Housing loan. Car loan. 5-6. Whatever you want to call it, one way or another, you owe someone some money and you need to pay them ASAP. Since you are earning in dollars, it will be easier for you to pay off your family’s loans – or not.

If you happen to be swimming in debt or prevent yourself from taking a dip in the pool of loans and monthly amortizations, this one is for you. Check out these tips on how to repay your loan without being broke:

1) Start with a payment plan. 

Before anything else, you need to plan on how you will repay your debts. To do this, write down the lenders and the corresponding amount and interest rate you owe them. List the due dates as well to help you keep track of what loan needs to be prioritized.

Through listing, you will be able to determine what loan needs your attention and immediate payment. It could be the loan with the earliest deadline or the one with the higher interest rate. If you have the more than one loan under the same lender, consider consolidating them if possible to save on interest charges. You may also start paying the loan with the smallest amount since it will be easier to pay off it off, plus it’s one loan off your list.

2) Identify unnecessary expenses. 

Do you really need to buy a new pair of shoes for your son or send a balikbayan box full of goodies for your family back home even if you just sent one two months ago? Think about the money you can use to pay off your loan instead of spending it on things that won’t last.

To repay your loan, it is compulsory that you remove unnecessary expenses. The money you are able to save can be used to minimize your loan and save yourself from a massive headache. It’s a small sacrifice that is worth it.

3) Don’t think about savings – yet.

How can you save if you have debts to pay?

At this point, you need to prioritize loan repayment and getting out of debt first. You won’t be able to grow your money and maximize your earnings if there are lenders going after you every month. Use the money for savings to reduce your loan and once you are able to pay off most of them, that’s the time you can start with your savings.

4) Borrowing money to pay off your borrowed money is a big NO-NO. 

Admit it. You are tempted to go to loan sharks just to pay off your loans (and eventually avoid a stain on your credit score). Unfortunately, this won’t do you any good.

Regardless if it’s a loan shark, friends who agreed to lend you money, or another legitimate lender, borrowing money to pay your debts is a big no-no. It will only add another loan on your list and you’re not doing yourself any favors as well.

5) Get a sideline.

In a previous post, we shared about the different business ideas you can try even while working abroad. Why not try it and who knows, it could be a success.

It doesn’t matter how small the amount you will get from your sideline. The good news is you can use this additional income to help you pay your loans without borrowing money from other people. You’ll never know, but this could be a good start for something bigger too.

6) If you can pay bigger, then pay bigger. 

Lenders will give you a payment schedule showing the amount of payment you should make every month. Don’t just settle with the amount set forth on the plan. If possible, pay more. You will not only be able to reduce the interest rate charged on your loan but also it could make loan repayment faster.

At the end of the day, what matters most is you acknowledge your debts and you do something to repay them as soon as you can. Repaying your debt won’t happen overnight, but if you are consistent with your payment, you won’t notice that you are now down to the last centavo.