Emergency Fund

[sarahsensible]

sis freelancer_babe ang usapan namin 6 months talaga...baby steps kaya 3months muna  Naku kami ang mukhang dapat one years worth..kasi mag aapat na anak namin  hubby is employed and I have a small business.

sis mameejhy savings for example maternity (although naka ready na ito), pwede ring savings for my kids incoming tuition sa June... or at least may extra money in case may gusto lang bilhin. Maraming pwedeng pag laanan yung tinatabi for savings eh. lalo na ang hubby ko na mahilig sa gadgets. Pwede ring biglang may SALE hahaha...

By the way, meron din akong sariling secret savings account  alam ko balang araw magsisilbi din itong EF.

Oo sis ang hubby ko game yan sa mga MF, stocks etc..ganun ang background nila sa family and colleagues nya. Sa kanya lang din ako natuto ng mga ganyan. Pero ako ang nag initiate ng Pru Life UK, Grepalife and Sunlife namin (insurance eklavu..naging 3 yan kasi mga friends ko na agent LOL)  I think sinwerte sa age when we started kasi 23 ako nun sya 26. 28 na ako now, sya 31, sabi nila younger the better?  Sorry OT na yan.

[freelancer_babe]

^ Ganyan din ako, yung part din ng savings merong nakalaan sa mga SALE! hehe.

[sarahsensible]

^binibiro ko si hubby.. I was explaining EF to him sabi ko pa "..pwede rin na ang tingin mo sa biglang release na new gadget eh emergency edi magagamit mo yung EF".. nainsulto daw sya hahaha

[mameejhy]

@Freelancer_babe - I like the idea of having "different funds" for specific purposes but, isn't it confusing? For example - the gift fund, if ever I'll do that hubby will just probably smirk at me if I need to withdraw money for that. Hmm ganito kasi we're based abroad and a H&M shirt will cost 30riyals... kumbaga kung Pesos parang barya lang bakit kelangan ko pa mag withdraw? I might probably stick with the Emergency, Retirement, Investment/ Business & Vacation funds. I actually have an envelope for Mutual funds, I'm still thinking if this should be the Retirement or the Investment/Business fund, though.

If you find it cumbersome to compute for expenses, then compute for savings instead.

- It's hard for us to calculate for savings, also because we have varying amount of bills/ obligations to pay every month. Yun plano ko (namin) na mag set aside ng 8% ng income ni hubby ano yun kumbaga eh benchmark... pwedeng more than that. For example, uuwi kami sa Pinas this year for vacation + Church wedding so syempre yun wedding-related expenses eh for this year lang (Specifically Jan 2012 & Dec 2012 lang yun bulk ng bayarin sa suppliers kasi 50% down & 50% balance )

Job Loss & Hospitalization

- To make a very long story short - job loss is near to impossible and hospitalization is (almost) free. I gave birth and I paid 115riyals (x 11.50 =  1,322Pesos) for everything without using my HMO. If may HMO zero cost. 

* The problem with this is pag nagretire, uuwi sa Pinas at maninibago na mahal ang gamot, hospital, food etc... So, may be what we should focus on is our Retirement fund?

Gratuity/ Back Pay

- For hubby, IF he will resign or get fired, he will get 1 month salary x years of work. Since 4yrs na sya sa company so salary x 4 which I think is more than enough to tide us over for at least 6 months... saka, I still have my work. Parang impossible naman na sabay kami mawalan ng work... pwede siguro 1-2 weeks kaming sabay mawalan ng work  (Huwag naman sana)

- Tama ka, plano din namin na i-invest yun gratuity pay nya... pwede na yun pang downpayment sa property + 1-2yrs amortization

Sis with your reply napaisip tuloy ako... siguro mas kelangan namin mag focus sa pag accumulate ng retirement/ investment fund. 

sis mameejhy savings for example maternity (although naka ready na ito), pwede ring savings for my kids incoming tuition sa June... or at least may extra money in case may gusto lang bilhin. Maraming pwedeng pag laanan yung tinatabi for savings eh. lalo na ang hubby ko na mahilig sa gadgets. Pwede ring biglang may SALE hahaha...

By the way, meron din akong sariling secret savings account  alam ko balang araw magsisilbi din itong EF.

Oo sis mag start na rin ako magtabi ng Tuition fee... for 2013-14 para mailipat namin si child #1 sa ibang school hehe  Hindi ko na tatanungin si hubby but, I'm 101% sure hindi yun papayag na ilipat yun bata sa school this 2012-13 kasi uuwi kami sa Pinas + wedding this year eh nandun na napunta ang pera namin

[sarahsensible]

^sis dito sa Pilipinas kailangan pinaghahandaan talaga ang job loss diba? kinekwento ko nga kay hubby eh sabi nya ".. at least sa ibang bansa mawalan ka ng work, may pake gobyerno sayo dito sa Pinas bahala ka sa buhay mo kung kelan kapa next makahanap" (democrats you know LOL )

[mameejhy]

^Mataas kasi cost of living sa Pinas. Let's say 8k Pesos salary mo hindi ka makakabili ng car; Dito sa amin yun ibang pinoy na 5k Riyals ang sahod may pamilya na sa Pinas may pamilya pa dito Sa Pinas yun Zara na blouse siguro 1500-2000 pesos dito 80-100 riyals lang.

[leelou]

^ natawa naman ako sis sayo about may pamilya pareho sa pinas at jan. may mga ganyan din kasi dito 

[freelancer_babe]

@mameejhy - ok lang na magkaroon ng mas konting bank accounts to simplify finances. If you need a new account, always have a heavy reason why you need a separate one.

Yung gift/donation, I agree pwede nga yun sa iisang bank account - unless you are able to give a heavier reason why it should be separate.

Yung emergency fund, though, is best left alone at hindi mixed sa ibang accounts.

I think it's better to separate retirement and investment. Investment is more of "play money" that you CAN AFFORD to lose, while retirement is long term fund that YOU CANNOT afford to lose.

You CANNOT always say job loss is near to impossible. The company that you are working for might not be telling you right away kung ano ang status ng company nila because they do not want their employees to panic - unless you belong to top management. You have wars, man-made disasters and natural calamities to consider and we cannot predict when these will happen - paano kung naging abo na lang ang company mo dahil sa terrorists? Paano din kung biglang bumagsak ang economy - like the US recession; US na yan ha, pero maraming kumpanya ang nagbawas ng tao at maraming kumpanya ang nagsara.

If those worse things above would happen (and yes, there IS a possibility these would happen), mahihirapan kayong magclaim ng 4x monthly salary as promised. I'm not sure though, kung libre pa rin ang hospitalization ninyo when those disaster strikes. If that's a nationwide or regional problem, then pareho pa kayong mawawalan ng work *wag sana*.

[freelancer_babe]

^sis dito sa Pilipinas kailangan pinaghahandaan talaga ang job loss diba?

The concept of building an emergency fund is not just from the Philippines. Emergency funds are also mentioned rin in US financial websites - existent na yan before that US recession happened. Popular advice din sa kanila not to rely on government savings programs such as social security and retirement (401K ba yun?). Pinaghahandaan din nila ang job loss.

I think napulot lang natin ang mga financial ideas sa kanila. Mas marami akong napupulot doon; dito sa atin simplified pa.

[mameejhy]

^ natawa naman ako sis sayo about may pamilya pareho sa pinas at jan. may mga ganyan din kasi dito 

Totoo naman... nakaka highblood!  Akala ko mas strikto dyan kesa dito?

I think it's better to separate retirement and investment. Investment is more of "play money" that you CAN AFFORD to lose, while retirement is long term fund that YOU CANNOT afford to lose.

You CANNOT always say job loss is near to impossible. xxx Paano din kung biglang bumagsak ang economy - like the US recession; US na yan ha, pero maraming kumpanya ang nagbawas ng tao at maraming kumpanya ang nagsara.

If those worse things above would happen (and yes, there IS a possibility these would happen), mahihirapan kayong magclaim ng 4x monthly salary as promised. I'm not sure though, kung libre pa rin ang hospitalization ninyo when those disaster strikes. If that's a nationwide or regional problem, then pareho pa kayong mawawalan ng work *wag sana*.

Oo nga, tama ka... Investment money should be separate from Retirement money. I made a separate envelope for that, after I read your comment.

As for the economy, I doubt it will fall. Qatar just become the richest country in the world, according to a recent news/ article. Infrastructures are being built in literally every corner. Sabi nga ni mister, yan bawat ginagawang kalsada na yan - yan ang bubuhay sa atin hanggang nandito tayo. Naiinis kasi ako minsan kasi matraffic kasi maraming road diversions.

If worse comes to worst, me and the kids will go back to Pinas and stay at our rental duplex (assuming a unit is vacant). Or, at my parents' house. Hubby will look for another job abroad while I start a business. That's actually our plan B. 

IMHO, the 3-6 mos rule does not apply to everybody. For example, yun mga kumikita ng atleast 200k Pesos (combined income) per year na minimal lang ang living expenses. Hindi kami ito, ha? May mga kilala ako na ganyan. Tinanong ko sila about emergency fund (chismosa lang ), wala silang ganun, kasi daw pag may pera sila diretso bili ng stocks, mutual fund o properties pag may pera sila enough for downpayment. Tinanong ko rin ang nanay ko, sabi nya pag may big amount of money sila, binibili agad ng lupa (province).

I personally plan to just save 1 month worth of our combined income as emergency fund. I will keep 1/2 of it in an account here; the other half in a Phils. account. We're slowly building up our EF now and if it's continuous, we might fulfill the goal by Dec 2012.

I plan to invest the rest on mutual funds, UITFs and rental properties.  Good luck to me and Good luck to all of you!   

[freelancer_babe]

^ Nice sis. In any investment and money-planning we usually make assumptions - such as what you had said about Qatar's economy being so stable.

Maganda nga ang may fallback plans. I'm currently making one now - career-related. Mahirap din ang freelancing and in IT, it will be difficult for me to learn new programming languages in my 40s or even 50s.

Ako rin, 3 to 6 months is not applicable for me. Mas malaki sa akin, mga 9 to 12 months because of my unstable income as a freelancer, and I could not find a good HMO that covers all plus senior citizens. But because we have people asking how big should an emergency fund is - then those 3 to 6 months are pretty much the rule of thumb. Yun lang, there is that thing that is called "too much" and "too little". Pero given those figures we could always adjust.

[izzybaby]

this is so possible if there are at least 2 people working in your family. i've been super frustrated trying to start with level 1 but things just get worse. remind you i'm single and youngest in the family. but i'm just so "lucky" inheriting the misfortune of my parents and siblings.

wow, it's been 10 months since my last post. I'm happy to say that I have saved one month worth of my disposable income for savings and 3 mos worth for my emergency fund. I promise myself not to overspend and maintain my discipline. I still have few liabilities but will end within the year. Hope there will be no need to take out new loans etc.

God is great!

[chefron]

wow, it's been 10 months since my last post. I'm happy to say that I have saved one month worth of my disposable income for savings and 3 mos worth for my emergency fund. I promise myself not to overspend and maintain my discipline. I still have few liabilities but will end within the year. Hope there will be no need to take out new loans etc.

God is great!

congrats sis! mabuti ka pa.

[rodcielle07]

hello mga sis!

I have question regarding emergency funds.. san ba ito iniinvest? bangko ba o sariling ipon? sensya na bano mode eh.. tsaka tamad na magbackread.. sakit ulo ko na kasi hehe..

thanks

[mameejhy]

^At least 6 months worth of expenses placed in a savings account or Time deposit.

Please backread for more info/ suggestions. 

[babythug28]

Question: advisable kaya na kumuha ng credit card para gamitin in case of emergency? and by emergency, i mean hospitalization, mga ganung expenses.

we don't owe one since both hubby and i think na hindi naman namin need for shopping purposes. we're not rich ah if we want something, pinag iipunan talaga namin so we can pay it in cash.

pero ngayong priority namin eh mag ipon and mapalago yung kinikita nya, iniisip ko magkaron lang sana ng backup in case na may ganung pangyayari or emergency nga (na sana naman wala)

[mxherr5]

Well how do you plan to use it?

To pay for any unforeseen expenses ba na your emergency fund
cannot absorb?

I for one would think it would have been
very convenient if I had one when my wife was
was rushed to the hospital due to a pregnancy
related concern(And thus was not covered by
our HMO)

I had to withdraw a relatively big amount
at an ATM.. late at night for "down payment" to the hospital.

It would have been less of a hassle if I had
a credit card.. Then I could just pay it off later..
Online pa. No need to withdraw a big amount of money   

[mameejhy]

^Totoo yan ganyan... When I gave birth sa Pinas nasa abroad asawa ko, I had an ATM naman pero ayoko ubusin ang laman kaya 1/2 atm at 1/2 credit card ipinangbayad ko then binayaran ko yun credit card nun nagpadala ng pera ang asawa ko

[lonelymiss28]

i use 2 banks yung isa sa savings, retirement, saka emergency fund, yung isa naman yun yung ginagamit ko to balance my money saka panggastos ko saka andun yung checking account ko but lately lang nag open din ako dun ng extra emergency fund just in case mas maganda maraming emergency fund just in case since my mom passed away last feb di mo talaga masasabi kelan mo kakailanganin ang pera and the more may extra money ka mas kampante ka sa gastusin.

[babythug28]

^ salamat sa mga input..baka nga ganyan na lang din gawin ko, will apply for a credit card but will not use it unless emergency..mahirap din magbayad ng credit card lalo na mataas yung interest