balikbayad Blog

Did you know that Filipinos are among the least financial literate countries in the world? This means many Filipinos are not aware of the concept of investment, savings, and even as simple as managing your own money. This explains why most Filipinos don’t have savings account and most of your money go to remittance back home.

As an OFW, you might say, “Wala naman yan” or “Hindi ko naiintindihan ang financial literacy na yan.” 

Don’t worry. Building financial literacy may not happen overnight, but these five questions will help you not just understand financial investments but also promote and encourage you to start building your financial security:

Question No. 1: Do you have savings? 

This is the first question you need to answer when starting to build your financial literacy. Savings is crucial because it not only prepares you for the rainy days but also gives you a chance to bounce back in case of financial difficulty and an edge by the time you reach retirement age.

Saving is a continuous process. Set aside a portion of your monthly income, say $10 or $20 and place it in a fund, preferably a bank account. When you do this consistently, you might be surprised with how much money you were able to save and it will feel good.

Question No. 2: Do you have a financial plan? 

Investopedia defined financial plan as a comprehensive evaluation of one’s current and future financial state using known variables to help predict future asset values, cash flow, and withdrawal plan. To make it simple, what are your short-term and long-term goals.

Your financial plan must lay your specific, realistic, and time-bound goals given the money you are earning. For example, you plan to buy a car below P1 million after five years or at least P100,000 in your Emergency Fund after three years.

Question No. 3: Do you have insurance? 

Not many people believe in insurance, which comes in different types, for three reasons: (a) they don’t know how it works; (b) the premium is too high; (c) they simple don’t trust insurance companies.

Here’s the thing: having an insurance may come in handy during tough times. Invest in life or health and medical insurance because (knock on wood), you’ll never know what could happen if you are abroad.

Question No. 4: Do you have any passive income? 

Passive income is earnings you gained from any enterprise without being materially involved. In other words, you don’t have to work hard for it and yet, you get to earn something from it at the end of the month. Examples of these are the earnings you get from rentals, investment, or limited partnership.

This should be your goal. Apart from your monthly income, look for other ways you can earn and grow your money even without exerting too much effort. Explore your options. Read about investments. Educate yourself as much as you can to boost your learning.

Question No. 5: Do you use loans properly? 

Loans can be helpful, especially during times of need. Unfortunately, there are instances when cash isn’t enough; hence the need to apply for a loan. The question now is how do you use the proceeds of your loan to make it work to your advantage. Consequently, how well do you handle it.

Don’t be among the many Filipinos who borrow money to sustain their lavish lifestyle, only to find themselves buried in debt later on. Borrow only when needed and with an amount that is necessary.

Given these five questions, how many of them did you answer yes? If you have one or two “Yes” answers, then read up, educate yourself, and learn more about the ins and outs of managing your finances.

In an OFW-Filipino setting, the husband works abroad while the wife stays at home to look after the kids. Apart from that, you, the housewife, are also left with an equally important task: budgeting your husband’s income. 

Apparently, many housewives will say that their husband’s income is “sapat lang” or just enough to last them through the month, or at times, not even enough. Then here comes emergency situations like your child getting sick or payment of school fees. Apparently, your husband can’t immediately send money, thereby forcing you to borrow from other people.

You have several options:

• Family or friends, common and cheaper since there is no interest charged, although there is no assurance that they will lend you money.
• Pawnshop, especially if you have valuable items you can pawn, but there will always be a risk of losing them.
• Loan sharks, otherwise known as 5-6 who charge with higher interest rate.
• Licensed lenders, which you will learn more about below.

Among these options, borrowing from licensed lenders can be your best bet. It is legitimate, safe, and you are sure that the interest charged is competitive and according to the existing rates.

Here’s the bigger question: Can housewives, whose main source of “income” comes from remittances, apply for a loan?

The answer is yes, and it is called allottee loan. 

All about Allottee Loan 

An allottee loan is a type of unsecured loan that allows qualified individuals to borrow even without collateral. This means the housewife (yes, you) will file the loan application and submit required documents to prove that you are a beneficiary of an OFW.

As soon as you submitted the documents, the lenders may grant (or reject) you a credit according to your capacity to pay. The loan will also be payable within three to six months, or more, depending on your relationship with the lender.

Below are the basic requirements you need to submit when applying for this type of loan:

• Latest OFW contract with POEA validation
• Husband’s valid and latest Overseas Employment Certificate (OEC)
• Valid passport
• Working visa (for land-based workers) or Seaman’s Book (for seafarers)
• Allotment certificate bearing your name as an allottee
• Proof of relationship to the OFW, which in this case, a Marriage Certificate
• Proof of billing
• Valid government-issued ID

Some lenders may require you to submit more documents apart from what was enumerated above. Make sure to ask for a list of requirements first so you can prepare the documents before submitting your loan application.

Does Balikbayad offer Allottee Loan? 

Unfortunately, we don’t.

The danger of applying for an allottee loan is that some OFWs were surprised that their spouses applied for a loan without their consent. This could create trouble for their family as it creates both a strain in their relationship and their financial standing. At the same time,  it creates trouble for us, lenders, because we have to demand payment for this type of obligation while understanding your family’s financial capacity.

Nonetheless, we allow existing borrowers to apply for a loan even if the OFW is abroad as long as we are able to get a consent from the OFW himself, allowing such loan.

Tips to Remember when Applying for an Allottee Loan 

• Think before you submit, the loan application that is.
• Determine whether there is really a need to borrow or perhaps, you can postpone the expense.
• Inform your husband about your intent to apply for a loan. This will avoid the element of surprise and possible strain and financial trouble in the family.
• Prepare the necessary documents. This will make loan processing easier and faster.
• Make sure to pay on time. This will prevent any negative effect on your credit history.

Being a single parent will never be easy. Aside from playing the role of both father and mother, you also have to ensure your kids’ future. Sometimes, you are forced to accept a job offer overseas in order to provide a better life for them. While being a single parent is not easy, being a single OFW parent will never be a walk in the park as well.

Apparently, it’s not enough that you send money back home. Being an OFW is not a guarantee of a good life unless you know how to plan your cards (and opportunities available) well. To make sure you sustain the good life, you can try the following money-saving tips:

1) Start your month (or week) with a budget plan. 

Creating a budget plan can be tricky and tedious, especially if you don’t know where to start. Nonetheless, you need one to be able to track your expenses, make room for adjustments, and ensure that you still have something left to fill up your savings account. Eventually, budgeting could create a cycle of self-discipline and instill the habit of saving.

Don’t know where to start with budgeting? Check out this post and use it as your guide.

2) Open a savings account for your child/ren. 

And make sure it will serve its purpose, which is specifically for your kid/s.

Your kid/s’ future is something you cannot predict. Still, it is best to prepare for it, no matter how good or bad it will turn out. This is why you should open a savings account for your kids as early as possible. All you need is as little as P500 and you are off to a good start. Then, make a commitment to deposit every month, which must also be included in your budget.

The key here is consistency. Instead of shopping for them, save the money because you will never know what will happen. You will surely be motivated to save more once you see that your kid/s’ savings account is increasing.

3) Always pay bills on time. 

Whether it’s a credit card bill, an existing loan, or any utilities expense, it is important that you pay them on time. Otherwise, you might find yourself paying for additional interest and penalty fee, which you can supposedly use on other equally important things, say savings. Worse, past due accounts reflect on your credit data, thereby creating a negative impact on your credit score.

4) Get a side job. 

Who doesn’t want extra money? Being a single mom means you shoulder all of the finances and a side job can be helpful not only to make end meets but also save something extra.

If time permits, consider getting a side job to boost your savings. Know your skills and fix your schedule to find out which sideline is best for you. You can also check this list to help you decide what side job you can take. The money you can earn from your side job may not be that much, but it could help pay the bills.

5) Teach your kid/s to save. 

You can teach your kid/s a lot of things and life lessons, and one of this is the value of saving. Even if you are earning in dollars, this doesn’t mean you should give in to your family’s demands and worry about savings later.

As early as not, instill the importance of saving. Be a perfect example to your kids that happiness is not about the material things you own. Instead of imposing, make sure to explain your financial situation in a manner they will understand so they can help you save. Start with piggy bank, depositing P5 everyday then slowly introduce the concept of bank and savings account.

At the end of the day, what matters is your family’s financial security. Earning your first million may take time, but you will get there as long as you handle your money wisely.

Have you invested in a family car? If yes, what are your major considerations and the things you did before buying your car a family (and share them in the comments section below)?

If not, then this one is for you.

In a previous post, we shared six things to remember before you buy a car for your family. This is because aside from earning more by working as an OFW, buying a car is one of the major purchases you will make as a product of your hard work and sacrifices to provide a better life and brighter future for your family.

Apparently, buying a car is not a walk in the park. There are many things you need to consider to make sure you land a good deal and get the car that is most suitable to your family. This is why you need to avoid these mistakes to make sure you get the right car for you:

1) Not doing sufficient research 

This is in terms of buying the right car to finding the best lender to help you finance your purchase. In fact, not doing enough research in general is the worst mistake you could do when making purchases.

Keep in mind that there are tons of vehicles available that comes in different sizes and features. Know what you want for your family car and then maximize the World Wide Web to find out the type of car that will suit your needs. Take some time to read and watch car reviews to help you decide.

Apart from the car itself, you also have to do enough research about lenders, especially if you plan to take out a car loan. There are tons of lenders out there that offers competitive rates and features to entice buyers like you to obtain a loan from there. Shop around and compare before you say yes.

2) Unsure of the type of car you want to purchase

Research is imperative when buying a car. This is why it is strongly advisable to determine your needs and identify the features you want for your car to maximize its use while staying on budget. You also need to decide whether to purchase a brand-new car or previously-owned vehicle.

Don’t join the bandwagon. Just because Toyota Fortuner is selling like hotcakes, it doesn’t mean you should buy one. Look around and identify what your family needs to help you decide.

3) Not setting a budget

“May car loan naman, eh.” 

Lenders may give special treatment to OFWs, but this doesn’t mean you should rely on them at all times, especially for major purchases like car. Aside from the features that will suit your family’s needs, you also need to set a budget for this type of purchase. Set the amount and make sure you’ll stick to it.

Keep in mind that working overseas is not forever. Think long-term and make sure you have sufficient funds to cover for the monthly amortization even if you are no longer working abroad.

4) Focusing on the car itself

It’s not enough that you identified the features you want for your family car. You also need to consider the car’s mileage and cost of repair (if you’re buying a second-hand car) and maintenance costs. Parking space is another important consideration you need to remember, so make sure your car has a space in your home (and not in the streets). If you’ll avail of financing, take note of the interest rate and term of loan to help you adjust your budget.

In other words, take a holistic approach instead on focusing on one aspect only.

4) Impulse buying

Would you believe that buying the perfect car is also about perfect timing?

This is why it is important to shop around and explore your options first instead of buying a car according to impulse. Car is a major purchase and requires proper planning. Otherwise, you might find yourself buried in debt and your car taken away from you because you are unable to pay on time – and you don’t want that to happen.

5) Not reading the contract’s fine print

Lenders, especially loan sharks can be sneaky. They could put catchy terms in the front page and unfavorable conditions at the back against you.

Before you sign any document, make sure to read everything, no matter how small the print is. Don’t be afraid to ask questions and clarify terms unclear to you. You need to protect your interest too and you can do so by reading the terms of the contract.

6) Not consulting the rest of the family

It’s a family car, which means it is intended for everyone. In buying a car, make sure you consult your family and ask them about their opinion as well. Don’t buy a car with manual transmission if your spouse cannot drive one. Buying a sedan is also not advisable if you have six kids since everyone won’t fit in.

At the end of the day, the car is for your family. Keep them in mind and what will be more comfortable to everyone else to make the most out of your purchase.

It’s never easy to work abroad. Apart from the competition where thousands of workers are vying for the same position, you are faced with the gruesome fact that you have to pay for fees before you can actually be deployed abroad.

What exactly are these fees that you need to pay?

Read on to find out – and help you prepare for them in case you plan to work overseas:

1) Placement Fee

This is a fee collected by recruitment agencies from deployed OFWs. Placement fee is necessary for recruitment agencies since the nature of their business is risky. The fee paid to them is placed in a fund, which can be used in case something happens to the deployed worker. More importantly, recruitment agencies are responsible for extending help to OFWs they deployed abroad.

How much should this cost? POEA-licensed recruitment agencies are required to collect an equivalent to or less than one month worth of salary. Nonetheless, there are instances when placement fee is waived, which means you don’t have to pay for it. These instances include:

• Working in US, UK, Japan, Netherlands, Ireland, Norway, New Zealand, and Cabnada
• Working as a seafarer, caregiver, or household service worker

Important Tip: Placement fee will only be paid once you signed your employment contract bearing the job you applied for. Make sure to ask (or demand!) for an Official Receipt (OR). It should state the date of payment and the purpose of such payment.

2) Training Fee

There are many jobs abroad that require special skills. If you want to increase your chances of getting hired, then consider getting necessary training with corresponding certificate to prove completion.

You might be worried about the fees. Some trainings require you to pay a fee upfront, but if you want to save on this, TESDA offers trainings that are either free or for minimal amount only. Take advantage of those and who knows, you can use it to your advantage.

3) Processing and Other Related Fees

Apart from placement fee, you might also be asked to pay for processing fees.

How are processing fees different from placement fee?

Processing fee is the cost your employer spent for your deployment abroad. This includes yearly contribution to social services like Philhealth and PAG-IBIG, visa fee, airfare, compulsory insurance, OWWA membership, PDOS, and POEA processing fee among others.

Nonetheless, you are not required to pay for all of these costs. You are only mandated to pay for Philhealth and PAG-IBIG, although PAG-IBIG is no longer mandatory. The rest of the costs must be paid by your employer.

4) Documentation Fee 

Documents are crucial when applying for a job overseas. You need to prove that you are not convicted on any criminal or civil liability and that your records are clear.

Some of the documents you need to submit wherein the costs for obtaining those documents will be shouldered by you are:

• Barangay Clearance
• Police Clearance
• Birth Certificate
• Passport
• NBI Clearance
• Medical examination fee

There are recruitment agencies that offer documentation services, which is convenient for you. The fees may be higher than just getting your own documents. If you wish to avail, make sure to ask for an official receipt reflecting the costs for each document.

The fees may vary, but the bottom line is you need to be prepared for these fees if you plan to work overseas. This way, you don’t have to borrow money to cover these fees because let’s face it, not all lenders are willing to lend money for this purpose.

While there is no guarantee, one of the things that could help you increase your savings and attain financial freedom is by starting your own business. Even if you are working abroad, putting up your own business can give you additional income, which leads to more buying power and higher savings (if you used money right).

Let me tell you something: not all business ideas will guarantee success, no matter how passionate you are about it. In fact, there are small businesses that were once great but no longer advisable at this point in time. Before you submit that “Apply Now” for you loan application, check out these business ideas you might want to skip:

1) Computer Shop

Once upon a time, computer shops are everywhere. Even if your family doesn’t own a laptop, they can go to a computer shop, log in to Skype or Yahoo! Messenger and they can already talk to you even if you are miles away. Sadly, the rise of smartphones and Facebook, coupled with more affordable laptop prices made it easily accessible for your family to reach you – at no cost.

If you believe this business can be profitable, then make sure you don’t invest in too many computer units. Introduce other services as well such as computer and mobile repair or sell computer-related items.

2) Travel Agency

Did you know that there was a drop of retail travel agencies since the Internet started to boom? That’s not all. Many travelers these days are budget-conscious; hence the rise of online travel booking websites. Travelers now have access to hotels, airfare, and transportation among others – without paying for agency fee.

Why not offer your services for that specific area? Be their travel guide or start your own blog showcasing the country where you are working.

3) Fashion / Retail

Everyone needs clothes and shoes. With countless of people selling clothes online and even outside the World Wide Web, the competition might make it harder for you to survive in this business. Worse, big brands are using various tactics that will make it difficult for small retailers to withstand.

Still, this doesn’t mean you cannot capitalize on the fashion market. The key here is to offer something that other sellers cannot compete with. For instance, you can get clothing items available in the country where you’re working and sell it in the Philippines where the items or brands are not visible. Make sure you start with few items to help you test the market. If you have enough funds and the response is good, try exclusive distributorship of the brand.

4) Restaurant / Food Business 

Similar to clothes, everyone needs to food to eat. Just like clothes, opening a restaurant or getting in the food business in general can be challenging – and risky.

As of this writing, food parks are in and becoming popular, thereby giving small and starting entrepreneurs a chance to introduce their food business. The question is how long? You may opt to put up your own restaurant, but this can be risky.

If you insist on having your own food business, consider various factors such as the location, rent of the place, foot traffic, and more importantly the food. You might want to start small first like a sandwich shop or carinderia with food delivery in offices. You might even pick up a dish where you’re working and tweak it to give a Filipino taste. The key here is to give something new to the people’s palate and who knows, it could be your road to success.

How will you find the right business for you? Don’t look at the trends alone and consider business ideas that will stand and survive the test of time. This way, you are sure to survive.