Featured Post

Sun Maxilink Prime: 3 Reasons Why My OFW Clients Get a VUL as Their First Life Insurance + Investment Policy

VUL products (like Sun Maxilink Prime) are popular among my OFW clients.  You see,  Sun Maxilink Prime is a Variable Universal Life (V...

3 Tips on How OFWs Can Deal With Family & Friends Who Borrow Money


Sunday, April 30, 2017
Pautang naman. 

The direct translation of this is: "Please lend me some money." 

But in the Filipino culture, it's an entirely different translation, which is usually: "Please give me some money." 

And for my OFW family members, friends, and even clients, this phrase is something that they're all too familiar with.

Sa atin kasi, pautang = pahingi (most of the time) so I advise my OFW family members, friends and clients that every time they lend money to someone, don't expect that the money will come back. 

In dealing with the "Pautang cycle" that is too deeply ingrained in our culture, you need to be as objective as much as possible. If you let your "awa" and guilt dictate the way you handle your finances, you may end up destroying the financial foundation that you've been trying hard to build in the first place.

What if:

Your non-working (but healthy and able) relative in the Philippines is asking for P20,000 to:
- start his 7th? 9th? 777th? own business
- pay his child's tuition (is your long-lost distant niece a part of your priority?)
- pay his utang (you're not his asset, why should he liquidate you to pay his loan?)
- buy his motorcycle, etc?

Here are three tips on how you can deal with this situation:



1. Expense-tracking     

Track your monthly income and your monthly expenses. This is the most objective way to find out if you can afford to help someone, or if you can't because you're the one who needs help pala. 

Here is a budget template you can use. 

Don't just focus on the NOW, you need to focus on TOMORROW as well. 

Sure, you can help now because you have extra money, but have you budgeted for next month's expected expenses, too? 


2. Empathize, but don't promise anything.   

Yes, it may be a bit difficult to empathize at first, especially if it's a long-lost relative who suddenly messaged you "Kamusta ka na?" or if it's a high school classmate who suddenly sent you a text saying "Hi, it's been a while! How are you na?"



Usually, if you've been traumatized by messages like this, it makes it so easy to just "Seenzone" the message or simply ignore it, right? 

But you're advised to do the opposite. 

Hear them out. Respond with "Hi, long time no talk, how are you?" or "Oo nga, kamusta?" and listen to their sad story. Empathize with them, and when the punch line 

"Pwedeng pahiram ng pera..."
"Pautang naman..." 
"Can I ask for a favor?" 

...comes. Reply with this: 

"It's nice talking to you again. Can you give me two days to think about it? I need to check on my budget for this month kasi." 
"Sorry, I can't promise anything yet. I need to check my budget and discuss with my wife/husband/partner/parents first..."
"Check ko muna monthly budget namin ha? May mga bayarin din kasi kami, baka hindi magkasya."

If they respond offensively like "Damot mo naman!" or "Edi 'wag!", don't bother.

3. Establish a "Helping Fund"

Some of my OFW friends have a "Helping Fund" in their budget category - this is usually 2% of their take-home pay, so one friend who earns P50,000/month sets aside P1,000 for the Helping Fund.




This Helping Fund is used to give financial support to the extended family, so whenever someone borrows money, my friend doesn't give the full amount; she just gives a portion of her Helping Fund, and she doesn't expect the money to be returned anymore.

Remember, if you're looking at the order of which you'll help, here's a guide you can consider:

If you have your own family: your family's needs come first (spouse & kids)
If you're single with no kids: the needs of your parents who aren't able to work anymore

IF you're REALLY EAGER to give financial support to your extended relatives, you can do the same thing:

- Set aside 2% of your take-home pay for "Helping Fund", or,
- Set aside a fixed amount, like P1,000/month for extended financial support

TIP: Help in Kind. 

If possible, don't give cash as the benefit.

Help in kind. For example, if the "utang" is for:

- tuition fee, write a check payable to the school.
- medical bills, write a check payable to the clinic/doctor/hospital.

If they're really - and honestly - at need, they'd appreciate this gesture too!

This makes it easier to give support - when you have that peace of mind that your money is used to help, not to be used as someone else's "Travel Fund" or "Gadget Fund".

How about you - as an OFW, how do you respond when someone says "pautang"? 

You worked hard for this money - shouldn't your money do the same for you? 

Protect your family AND invest for the future with Sun Maxilink Prime.