Category: Money Matters

Securing your family’s future is one of the primordial concerns of not just OFWs but every parent in general. By future, this includes your child’s college education.

Let’s face it. Sending a child to college is not easy – and cheap. Tuition fee must be paid twice every year, with the rate depending on the school. Then there’s the weekly allowance, commute or gas expense, miscellaneous fees to be paid on top of the tuition fee.

In other words, you need at least a million (or even higher if you’re aiming for Ateneo or La Salle) every year for four years to be able to send your child to a good school. With the expenses you need to pay, your monthly income and side earnings may not be enough to pay for your child’s college education.

This is why you resort to educational plan to help fund your college dreams for your child. Apparently, there were several pre-plan fiascos (CAP, anyone?) that makes you doubt whether to get an educational plan or not.

The next question is this: is getting an educational plan worth it? 

Benefits of Educational Plan 

• It guarantees your child’s education, especially when your child dreams of going to a particular school.
• An educational plan makes studying more affordable by supporting your child’s school fees.
• The maturity benefit meets your child’s college expenses, especially when you start early.
• There is an option to choose riders such as personal accident insurance. This means even if you are gone, your child will still be covered and go to college. Ask your agent about riders (although this means you have to pay for additional premium).

Downside of Educational Plan 

• It takes away a big chunk in your monthly budget. Insurance plans don’t come free and if you plan to put add-ons in your child’s educational plan, this means higher premium as well. Check your budget first and see if you can accommodate additional expense.
• The educational plan doesn’t cover the entire school fees. You still have to pay for certain expenses like allowance or miscellaneous fees, which you need to save up for.
• The return on educational insurance plans is lower compared to the inflation of tuition fees.
• The risk is still there. This is why it is important to invest in legitimate and reputable insurance companies.

Tips in Getting the Best Educational Plan for Your Child

• Plan ahead. There is no better way of starting than doing it now.
• Choose your insurance provider wisely. The insurance company must not only be known in the industry but is also legitimate, reliable, and capable of meeting your demands.
• The benefits of an educational plan must be aligned according to your needs. Aside from the college plan, ask for additional features like life insurance to make sure that your child can still continue its college education in case something happens to you.
• Consider your budget. Add-ons can be helpful, but if it will burden the entire family because of the premiums you have to pay, then stick to the basics.
• Educate yourself about educational plans first before getting one. Learn about concepts, terminologies, and the basics of insurance so you will know what the agent is talking about.

More than educational plans, it is best to start saving for your child’s college education as early as now. Get a sidejob if possible to help you save more. Then, set aside a specific fund for this and make sure not to get a single centavo from it. This will give you enough leverage by the time your child enters college (and preferably in his or her preferred university).

They say the Philippines has the longest Christmas season. That’s true. As soon as September starts, you will also start hearing Christmas songs on the radio and in malls. By the time the calendar hits November, Christmas trees and lights are everywhere, each mall and city giving something to boast about.

You may be thousands of miles away from the Philippines, but you can definitely feel the Christmas spirit every time you talk to your family. There’s long list of pabili as well, regardless of whether you’re going home or stay in the country where you’re currently working. Since it’s Christmas season, you tend to commit these money mistakes, which could compromise your savings and hard-earned money:

Forgetting about Christmas Budget

Fine, budgeting during the holidays can be challenging. Almost everything is on sale and there are tons of items available that make you want to buy them even if you’re don’t really need them. You justify it with the “Pasko naman” excuse until you realize that by next year, you have nothing left in your pocket.

What you can do is to set a Christmas budget and make sure you stick to it. You can even assign a specific amount per person to help you keep track of how much money you have and eventually, how much money is left. This way, you won’t be able to use all of the money you have.

Spending most, if not all of your money

You might justify your spending because it’s Christmas season. Still, don’t use this as an excuse to buy everything you want for your family and spend all of your Christmas bonus on material things, especially if you are going home. .

Keep in mind that the OFW life is uncertain. Stick to your Christmas budget and immediately set aside a portion for your savings or emergency fund. You’ll never know what will happen.

READ: 6 Tips on How to Spend Christmas Bonus Wisely

Borrowing money to buy gifts for the family

Gift-giving will always be part of Christmas. In fact, the celebration will never be complete without gifts under the tree. Kids are surely looking forward to opening their presents as well.

What if you are on tight budget? In that case. don’t borrow money just to appease your family. There are legitimate and acceptable reasons why borrowing money is advisable – and buying gifts is NOT one of them.

Keep things simple and explain ti your family why you cannot give all of their demands. Be honest about your financial status.

Too generous with gift-giving

There’s nothing wrong with giving gifts. It is and will always be part of Christmas. Still, take it easy on your spending. Your generosity is fine, but make sure that you will still have something left by the time the year ends.

Again, go back to your Christmas budget. Set a certain amount for each person and try your best to stick to it. At the end of the day, it’s the thought that counts.

The year may be ending soon, but this doesn’t mean your wallet should be empty. Take note and avoid these four holiday mistakes and you might be surprised with how much money is left by the time Christmas is done.

Previously, we shared five money-saving techniques during the Christmas season. Apparently, that’s not enough to make sure that you still have something left on your wallet by the time you get back to the country where you’re working.

How else can you still save money during the holidays? You should try these tips:

Tip No. 1: Consider re-gifting the items you did not use. 

Surely, you have mugs, tumblers, shirts, or other unopened items inside your cabinet, which you got from other people. Why not put them into good use and give them to your friends or colleagues who can use these items? This will help you save money and at the same time, free some space inside your cabinet.

Just make sure that the items you will re-gift will fit the personality of the receiver and as good as new.

Tip No. 2: Don’t settle for the usual gift wrapper. 

Buying a gift wrapper means costs. Sadly, the wrapper you paid for will be ripped and torn into pieces.

Save yourself some cash and use magazines or newspapers as your gift wrapper. If you have unused paper bags, go ahead and use them as well. If you want to be creative, doodle on the Manila paper and use it as a gift wrapper, too. This will help you save more cash in the long run.

Tip No. 3: Always give practical gifts. 

It’s the thought that counts, so they say. When giving gifts, make sure you go for something that the receiver will not just appreciate but also use and benefit from it. Don’t settle for the generics like shirt and mugs just for the sake of giving something to someone. Keep it simple and practical, yet useful.

Tip No. 4: Look at the price tag. 

One of the reasons why people get broke is because they just buy whatever they see without any regard to the price of the item. Don’t be like them.

Surely, you want to keep your family happy but buying an item that is way beyond your budget is not advisable. Make it a habit to check the price tag to help you keep track of how much you are already spending. Always be conscious of your spending to be able to save more during the season.

Tip No. 5: Make Christmas get-togethers affordable. 

Not all OFWs can go home during the Christmas season. If you are one of them, then that’s okay since you can still celebrate Christmas with fellow OFWs.

In that case, keep your celebration simple and affordable. Assign a place, preferably somewhere you don’t have to pay for rental fee, and have a potluck instead of getting a caterer. Have a videoke night or play games to keep it fun and enjoyable without hurting your budget.

Tip No. 6: Try DIY in gift-giving. 

Are you good at crafts? Now is the best time to bring out your creative side and give gifts using your own hands. It allows you to save more money and at the same time, makes gifts more personal.

Who knows, this could be a good stepping stone for a business. Word of mouth is a powerful tool, so make sure you put some effort into your gifts.

Being an OFW can be exciting. The fact that you are earning in dollars makes you more capable of not just buying everything your family wants but also providing them a better life. You are also closer to temptations since you have access to brands that are not normally found in the Philippines.

Because of this mentality, thousands of migrant workers are forgetting how important money is. To make sure you stay on track with your financial goals, here are back-to-basics money principles every OFW needs to know and master by heart:

Always save before you spend. 

Is there anything more basic than this?

It is never okay to put savings towards the end of your priority list. In fact, you should automatically set aside a portion of your monthly income for savings and this should also be included in your monthly budget, regardless of how much you are earning.

Keep in mind that the OFW life is uncertain. If you prioritize your family’s bilin instead of saving what you can, you might end up going home with nothing but an empty pocket – and you don’t want that to happen.

Needs versus wants. 

It is tempting to buy the items you see in stores and have it shipped back home. Your family will surely love it. But before you go straight to the cashier to pay the items, ask yourself this question: do they really need it? 

It sounds like a simple concept, but this is often forgotten by many. You have the tendency to fill your balikbayan box with items that your family don’t really need (like 10 cans each for spam and corned beef). Buy only things that matter. If you want to save more, don’t pressure yourself to send them a box frequently.

Money has time value. 

You heard this countless times, “The earlier you save, the bigger the return will be.” That’s true. This is why you should never procrastinate when it comes to saving and investing your money.

Read, explore your options, and educate yourself about the best investment choices for you. Ask around if it helps to give you an idea how different types of investment work. Remember that now is the perfect time to grow your money while you still can and you are able to work. Don’t wait for something bad to happen before you take action.

Assets must be greater than your liabilities. 

First things first. Assets are useful and valuable things of economic value that bring you money such as income-earning property while liabilities are debts or obligations you owe someone like loans.

Ideally, assets must be greater than your liabilities for a more secure financial future. This would also mean higher or positive net worth. It is important that you know the difference between the two so you will know how much you owe.

Health is wealth. 

You might be wondering why this is included as part of money principles. The answer is simple. When you are healthy, you are mobile and capable of doing things to be able to earn money. You cannot enjoy the value of saving and investing if you are sick.

This is a common issue among OFWs. Most of you work 24/7 to be able to send big money to your family back home. When you do this and rarely get enough sleep and rest, your health is compromised. The next thing you know, you are using the money you earned from your sidelines in treating your illness.

Relax,, take it easy, and get rest. Stick to one-day rest day and your health and body will thank you for it.

Nothing is certain, especially if you are an OFW. One day, you’re earning in dollars and living the life of a millionaire and the next day, you’re back home because you were among those workers who were retrenched. This is why it is imperative that you invest your money to make it grow.

One of the ways to grow your money is by investing in mutual funds. Here’s what you need to know about it:

What is a mutual fund?

Mutual fund is a type of investment fund that collectively pools money from various investors, both individual and corporate. This pooled money will be managed by a professional fund manager, who will then invest the fund in stocks, money market instruments, bonds, and other forms of securities.

The value of each share of the mutual fund is called Net Asset Value or NAV. It is computed daily based on the total asset value of the fund divided by total number of outstanding shares of the fund. If NAV is increasing, then that means you are earning.

You can earn from mutual funds in two ways, which is already net of charges and expenses:

• When the securities held and owned by the fund increased in value
• Through dividends or interest income received from the assets held by the pooled fund

What are the different types of mutual funds? 

• Stock or Equity Fund – This type of mutual fund is invested in stocks listed in the Philippine Stock Exchange. Among all types of mutual fund, stock or equity fund yields the highest returns. Apparently, this type comes with highest risk as well.
• Bonds Fund – This type of mutual fund is invested in fixed income securities like government securities (T-bills, treasury notes, bonds) issued by the government or commercial papers (LTNCD, corporate bonds) issued by Philippine companies. Possibility of loss is lower compared to stocks because bonds are usually guaranteed.
• Balanced Fund – This is a mixture of equity and bonds fund, thereby creating “balance” between high-growth-high-risk investment and conservative growth of fixed income securities. If you want to be on the “safe side,” this is highly recommended.
• Money Market Fund – This is the same as Bonds Fund because the pooled money is invested in fixed income securities. Unlike Bonds, money market fund is good for one year or less.

Tips in choosing mutual fund

• Identify your investment goal. Are you willing to take a risk to grow your money? Or do you prefer to stay on the safe side? It is important that you establish your investment goal first to help you decide what kind of mutual fund you will get. This way, you are more comfortable in putting money for investment.
• Know the risk you are willing to take. Are you a risk taker? Then stock or equity fund is your best option. If you are not willing to take a risk, then bonds are recommended. Otherwise, balanced fund is ideal if you prefer medium growth with medium risk.
• Explore and then choose. There are many banks and financial situations that offer mutual fund. Make sure to look into them first, compare what they have to offer, ask recommendations, and then decide who to give your money to. Trust your gut and find someone you can trust.

Still, don’t limit yourself with mutual funds since this is just one of the many ways to make your money grow. In case you need extra funds to, say open up your own business, Balikbayad is here to help. Submit your application form online for pre-approval and we will get back to you as soon as we can.

Saving is easy. Committing to saving and making sure that you put the amount you promised is hard. After all, OFW life means you will constantly get messages from your family back home, asking if you already sent them the amount they were asking. You are also responsible for the majority of the expenses of your family, so you have to work double time to cover for everything.

This is why saving is important.

How will you do this? You can try these simple, practical, yet effective tips to increase your savings:

If possible, walk from point A to point B. 

Public transport is fine and could save you a lot instead of investing in a car and paying for gas using your own money. If you want to save more, then why not walk when going from one place to another, especially if the distance is not too far. It will save you a lot and more importantly, you get to exercise as well.

Skip fast food and restaurant food. 

It’s okay if your boss invited you for after-work dinner in this fancy restaurant or to attend an event in this place organized by the Filipino community in the country where you are situated. Nonetheless, it is best to buy your own food, cook them at home, and bring them for lunch the following day at work. You will be able to save more and at the same time, you are sure that you are eating healthy.

Don’t mind the surprising looks from your co-workers. You need to save as much as you can because you’ll never know what could happen in the future.

Quit your vices. 

Do you smoke? How about drink?

Vices could help you relax, especially when you are feeling homesick. It’s hard to say no to friends as well since you don’t want to be labeled as KJ. Unfortunately, this means added expense on your part when you could’ve used the money to increase your savings. The worst part is this type of expense is slowly eating up your budget – and you won’t even notice it.

For instance, a pack of cigarette costs $6 per box. You consume two boxes a week, which means $12. Multiply this by four weeks, thereby giving you $48 per month. This leads to $576 per year, which you spend on cigarettes alone. Don’t you think this amount is better off in your savings account?

Avoid mainstream coffee. 

Starbucks coffee is good, but do you really need to get your caffeine fix from popular coffee shops and spend a few dollars for it – everyday? It’s okay to buy mainstream coffee once in a while, but if you are making this a daily habit, then don’t be surprised if you end up with almost nothing every week.

Limit trips to the malls and other recreational areas. 

You’re in a different country, so might as well what it has to offer that you can’t find in the Philippines, right? You can do this during your off days, but the problem with this is that your spending could escalate. You might be tempted to buy things you don’t really need where you end up spending more.

Still, this doesn’t mean you should stay at home all the time. The key here is to schedule your trips and set aside a specific budget for it. This way, you don’t spend too much money on things that won’t last forever.

At the end of the day, discipline is key to help you achieve bigger savings. Know your priorities, commit to limited spending for maximum savings, and make it a habit to set aside money for savings. Don’t worry. All of the sacrifices you are doing are worth it.

One of the many ways to help you attain financial stability or financial freedom is by starting your own business. It doesn’t matter how big or small. A business is still a business that gives extra cash during rainy days and teaches your family about money and responsibility while you are away.

It doesn’t end there. You need funds, additional funds or working capital, to make your business grow. Initially, you would go for banks since these are still the top choice. At the same, banks offer loan facilities and give special rates or treatment if the borrower is an Overseas Filipino Worker. Unfortunately, applying is not easy and you need to go through a process and prove your credit-worthiness before you get approved. What are your other options to make sure you get funds for your business?

Here’s what:

1) Liquidate (some) of your assets. 

It can be an old gadget like mobile phone or computers (the parts are still worth something), portfolio investments such as time deposit or stocks, few pieces of jewelry, or even some of the things that may no longer be valuable to but still worth something that you can sell online. Liquidating some of the assets you have, regardless of the amount, can help bring funds to your business. Plus, you get to clear some space in your house too.

Go ahead and schedule that garage sale. Just make sure you leave items that really matters to you.

2) Reduce unnecessary expenses. 

Your family doesn’t need a balikbayan box full of goodies every month. The money you use to buy them material things can be helpful when used as working capital in your business.

Make sure to check your budget and see what expenses you can minimize or eliminate. Adjust lifestyle habits as well since it could help you save more. This way, you get to use your hard-earned money for more valuable things. It’s a sacrifice worth taking.

3) Consider the government’s micro lending program. 

OWWA Loan can be helpful if you need working capital, but the requirements can be too much to handle. Aside from OWWA Loan, you can maximize the micro lending programs offered by various government agencies such as SSS or GSIS Family Bank. The government encourages Filipinos, especially those who work abroad, to go back, stay in the Philippines for good, and consider putting up a business, so take advantage of that.

4) Try online cash loans. 

It could range from P1,000 to as much as P50,000. Online cash loans are popular these days because of the ease and convenience they offer to borrowers who are in need of cash – fast. Application happens online and there is no collateral involved as well, which makes loan processing easier and faster.

Just make sure you choose online cash loan provider wisely. Go for a company with proven track record and excellent customer reviews such as Loan Ranger.

5) Borrow from private financial companies. 

Private lending companies offer loan facilities to make every OFW’s entrepreneurial dreams come true. Unlike banks, private lenders such as Balikbayad make borrowing easier by relaxing the loan requirements and faster loan processing. You can even apply and submit documents online first, thereby saving you time.

There are several options to help you raise money for your business. As long as you choose a legitimate lender and employ legitimate means, you will achieve the amount you need in no time.

Admit it. At one point in your life, you borrow money from your sister, friend, co-worker, and even submitted a loan application in the bank. Despite the monthly income and savings you have, the money is not enough to finance a particular need. Don’t feel bad because even businessmen and big companies borrow money for additional working capital. In fact, utang has been a part of Filipino culture to help us get through tough financial situations.

Where can you borrow? Consequently, what are the perks and downside of borrowing from different entities?

Read on to find out.

Family or Closest Friends

These are the people you always turn to in times of need, whether it’s financial or otherwise. More than that, they are willing to help you and lend you money – as long as you don’t abuse it.

The good thing about borrowing from family or any of your closest friends or colleagues at work is that there is no deadline. You can “pay when able” as long as you pay. You don’t have to worry about interest rate since you are only bound to pay the amount you borrowed.

The downside is that there will always be a risk in your relationship, especially if you can’t pay on time. The next time you are in need, you might have a hard time borrowing from them since you don’t live up to your promise.

Private Individuals 

Aside from your friends and family, other private individuals such as independent lenders can lend you money in times of need. Unlike your friend or anyone in the family, these individuals may impose an interest, depending on what you agreed on, which can either be a fixed interest rate or  incremental.

The downside of borrowing from private individuals who are not licensed lenders is the interest rate. Surely, you want to keep the rate as low as possible. On the other hand, the private lender wants a higher rate to earn profit from the transaction.

Paluwagan System 

This is common in the workplace. The idea of paluwagan is that a group of people, regardless of how many, will collect a certain amount from each other and will be placed in a common fund. Then, you will decide among yourselves the lineup on who gets the fund first, second, and so forth. Once the collected fund goes to the first in line, new funds will be collected again until everyone gets their share.

This is good depending on the number of participants, agreed contribution, and willingness to continuously give so that everyone can get their share. Nonetheless, you might have a hard time sustaining the paluwagan system.

5-6 Lending / Loan Sharks

Desperate times call for desperate measures. This is the reason why despite the skyrocketing interest rate, some people still borrow from loan sharks out of urgent need and necessity.

You can borrow from loan sharks IF you can pay immediately (which means the next day). Otherwise, stay away from them since you’ll end up swimming in debt.

Banks 

If you are looking for safety and legitimacy in the world of borrowing, then banks won’t let you down. Banks can offer various loan products depending on your specific need, which could come with additional benefits.

Banks mean well. Still, banks want assurance that they will be paid no matter what happens, which is why they ask tons of documents to prove that you are worthy of credit. Loan processing take some time too, usually a week or more. This is not ideal if you are in a hurry and you need money instantly.

Private Financial Companies

These are companies with assets not as big as banks but are legitimate and recognized by the BSP to function as lenders. Similar to banks, they also offer loan products that cater to a specific need, although it may not be as extensive as what banks can offer.

The good thing about private financial companies is that the requirements are more flexible. Some companies even have online application facility where borrowers can apply and submit required documents, thereby making borrowing easier and more convenient. Loan processing and cash disbursement are faster too, which usually takes one day to less than a week.

Balikbayad is among the trusted and legitimate financial companies that can help you address your financial needs. Send your application now and we will get to you as soon as we can. 

How many times have you heard that OFW life is not forever. Well, it’s true. After two years, you’ll find yourself packing your bags and going back home. Then, you need to apply again because your family is relying on you.

Does it always have to be that way? Is there something you can do to make sure that you have cash during rainy days?

These money saving hacks might just be the solution to your cashflow issues:

Set a SMART goal.

What do you want to achieve in five, 10, and 15 years? How about next year? Is it doable?

When setting goals, make sure that they are Specific, Measurable, Achievable, Realistic, and Timely. Don’t go for goals that can be hard to achieve, say your first million after your two-year contract overseas.

For instance, your one-year goal is to save at least P100,000 by December. With the right strategies and sacrifices you are willing to make, you can achieve that P100,000 by year-end. Keep it as realistic as possible.

Make saving a lifelong habit. 

They say it takes 21 days to establish a habit. When it comes to saving, you should be able to go beyond the 21st day and make it a lifelong habit. This will save you a lot during the rainy days.

How much should you save? Ideally, at least 30 percent of your monthly income. Being an OFW and breadwinner in the family, you might say this is too much for you. Even if you can’t meet the target percentage, at least aim for the number close to it, say 20 percent of your monthly income. You just have to forego certain expenses such as monthly shopping or eating out with friends every Saturday night.

Open a savings account.

There are many reasons why you need to open a savings account. The most important of all is that it is a stepping stone towards achieving financial freedom. To help you make saving a lifelong habit, you need to have a savings account to help you “keep” your money.

It’s not enough that you have a savings account. Maintain it. Your future will be happy.

Check out this post to know more about banks that offer Savings Account for OFWs.

Know where your money goes. 

Money comes and goes, especially if you don’t know how to handle it well. To keep track of your hard-earned money, make it a habit to list all the expenses or purchases you made for the day, regardless of how big or small the amount is. By doing so, you will be able to see which expenses are necessary and which ones you can forego for bigger savings.

Think about the future. 

One of the common traits of many OFWs is they think of NOW. As soon as you get your very first monthly income, you’ll end up sending it back home or treating yourself since you “deserve it.”

If you are serious about saving, then you need to start thinking about the future. Always think ahead, especially when buying something. Establish the necessity and urgency of the expense and the possible value after a year or two. This will help you decide whether a certain item is worth buying.

With these saving hacks, are you ready to say hello to bigger savings?