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#Money4Life: Purpose of Buying Life Insurance

Nabentahan ka na ba ng life insurance o may nagbebenta ba sa iyo nito ngayon? Many of us have been sold life insurance and some buy it without a clear purpose. All we know is that life insurance allows us to leave behind a sum of money to our loved ones when we die.

This is also my experience. When I had a child, financial products like life insurance suddenly became relevant. What if mamatay ako bukas anong mangyayari sa anak ko? So when someone approached me to buy a VUL life insurance, I used my savings for it.

Types and Terms of Life Insurance

Some life insurance like the one I purchased can be a one-time purchase and have an investment component. This means that the money you put into the product will participate in the stock market. As long as you do not remove or withdraw your investment, you can enjoy the life insurance benefits. This benefit is usually a lump sum amount that your beneficiary can claim upon your death. The amount must be greater than your investment, some institutions offer 125%, some higher.

Other life insurance products are term, parang prepaid load. You will pay x amount to be covered for 1 year and when you die within the year, your beneficiary can claim a lump sum amount. However, if you die after your term insurance expires, wala ng makukuha ang pamilya mo.

There are other types and products that bundle life insurance component with them. Pwedeng health + life insurance, investment + life insurance, at iba pa. Para malaman kung ano ang maganda para sa iyong pangangailangan, dapat isipin muna kung ano ba ang gusto nating magawa ng life insurance. We need to go back and review what we want our life insurance to do for us when we die.

Purpose of Life Insurance

This is a personal view of what life insurance can be used for. Please consult a registered financial planner from a reputable institution.

1. Funeral expense – for some of us, this is the first purpose we think of for life insurance. We do not want to burden our relatives and our children to ask for donations just so we can be buried properly. Question to ask for this purpose is, how much is your expected funeral expense? Mahirap isipin pero hindi masamang gawin ito. Iba iba kasi ang presyo ng funeral packages at maaaring higit na sa kailangan ang iyong life insurance.

A year after I got my life insurance, someone offered me another type of insurance – yung St. Peter. This takes care of funeral expenses and will take care of all the preparations (hopefully) except if you like to be laid at a private cemetery, then you need to purchase your own patch of land.

2. Replace income and take care of family – when you die, can your family bounce back and recover financially? This is important to ask yourself, especially if you are the bread winner. Take into account how many months (or years) do you think before they can come up with their own way to earn money.

When I die, I want to leave something behind. Normal na na tanungin sa lamay kung “may naiwan ba sya?” at gusto ko ang sagot ay oo.

3. Child’s education – if you die today, will your child be able to go to school? In our culture, it is not unusual for families to take care of children who are left behind by their parents. This is fortunate if all your relatives are doing well and you are in good terms with all of them. Your life insurance can help support your child’s continuing education, the question to ask is – how much would your child need?

4. Payment for estate tax – last but not the least, your life insurance can help settle your estate tax. This is the tax on the property that you leave behind. For example, land aside from your family home, your savings account, and if you have other investments other than life insurance. Did you know? Hindi ito magagalaw ng mga kamag anak mo hanggang hindi pa nababayaran ang estate tax?

With life insurance that is exempted from this tax, your beneficiary can claim this financial benefit without any problems. Siguraduhin lang na maayos ang iyong papeles tulad ng certificate of complete payment, receipts, etc. Ayusin ito habang nabubuhay pa!

Your beneficiary can then use this amount to pay your estate tax and “unlock” the assets you left behind. This should equal about 20% of your total assets.

How big or small should your life insurance be?

Now that we reviewed some of the purposes of life insurance, we can now compute the correct value of our life insurance. For example, if putting in P100,000 in life insurance will give you a death benefit of P215,000 – will P215,000 be enough for your chosen purpose?

If not, then you should add and continue to put in money to enjoy a bigger benefit. If you are using term life insurance, review if your premium will yield the suitable amount for your purpose. You might want to increase or decrease your premium depending on your need.

All of us will die and my belief as a Christian is that we need to die to enjoy eternal life. Death is not all bad, it only becomes unfortunate when we are not prepared. We cannot control everything but we can take steps to prepare ourselves and our family in the event of our demise, this includes financial preparation. Being financially prepared will allow your family to focus on reflecting upon your life and death, receiving compassion from others, and heal emotionally when you pass on.

Do you have life insurance already? What are the areas that you wish to review about it? Share it via comments below :)

Mommy Lace is a blogger from the Philippines. She started this blog to share information on pregnancy, breastfeeding, childcare, family, and health.

Money4Life Challenge: 4 Month Progress

Money4Life Challenge is a program created by Sun Life Financial that I signed up for. It spans for 6 months and includes 6 sessions with financial expert Aya Laraya. If you are interested, please ask Sun Life about their financial education programs.

Exactly 4 months ago, I set out a goal to save and invest for a trip to Australia. This was followed by tracking my expenses, creating a budget, looking for additional income, and enlisting the help of a financial advisor.

At first glance, the financial exercises I did are not new or never heard of. In fact, it is something we see and hear on Facebook, blogs, and TV shows. But the question is, ginagawa ba natin o bakit hindi natin ginagawa? These were the same questions that financial expert Aya Laraya would ask fellow participants of the challenge.

First session palang, I already decided for myself that I am either in or out. It is not a joke to travel from Cavite to BGC every Saturday, I told myself if I will not take it seriously and not practice what I learn then I will just be wasting my time and my P94 fare to and from BGC.

Money4Life Checklist

These are the things that I have started and continued doing since the challenge began 4 months ago:

  1. Set a clear goal
  2. Track my expenses
  3. Create a budget
  4. Always talk to my financial advisor
  5. Look for additional income

You can check the links above for a detailed blog post for each.

Something’s got to give


Investing is foregoing (sacrifice) something good for now, to gain something better in the future. All of these financial tips are just theory if I will not share with you the reality. Please know it is never easy to share anything related about money, money is very personal, but I also have a dream to inspire and empower ordinary women like myself. In the last 4 months, nobody was more surprised than I was. Kaya ko pala at pwede pala.

Here are the things I have learned to forego to achieve my goal:

  1. Unused and sentimental stuff – to jumpstart the first month of my journey, I started selling unused items around the house. Some belong to me like my favorite dresses but I never really wear anymore and some are sentimental items like my son’s stroller, baby clothes, etc.

    Up to now and whenever my room, especially my closet starts to look cluttered, I continue to pull out stuff to sell. Life happens and we will always outgrow some belongings that we no longer need but others who are in their unique stage in life might benefit from.
  1. Space- if time is money, I say – so is space! I gave up space for leasing opportunities i.e. bed space. It is something that I would not consider before (read: privacy) but I have courageously tried and now I am convinced that I made the right decision.In fact, I wish I have leased out space sooner. This is one of the new things that this challenge has pushed me to make, especially when we discussed about when a property becomes a real investment or an expense.
  1. Social media – before the challenge, I would spend hours scrolling down endless Facebook posts from my Facebook friends, some I don’t even remember meeting in person. I am also guilty of spending several minutes composing the perfect caption for my Instagram feed. Now I still enjoy social media but use most of my time for work and my family.
  1. Hobby 1: Gym – I use to spend 3 hours in the gym, three to four times a week. I value my health and are into body building, lifting weights, gaining muscle, etc. I did not really want to give up my gains BUT decided to cut training time to 2 hours. This means lifting heavier but with fewer sets. It is hard adjustment (I now lift 40lbs) but I am able to finish an hour earlier so I have more time for my online jobs.
  1. Hobby 2: Blog activitiesMasaya maging blogger, maraming events, activities at iba pa. I wish I can afford to enjoy being a full-time blogger but my budget says otherwise. When I began this challenge, I decided that I have to say “pass” to many blog related activities and focus on my online work for now.

  1. Hobby 3: Teleserye – aside from online work, I have committed to teaching my son the same lessons I learn from this challenge. Instead of watching teleserye, I continue to study and work for my online writing jobs PLUS finish the book Junior Ipon with my son. It’s a financial literacy text and workbook for kids. Money management is still not taught in schools so I am doing something about it. Like I said, time is the greatest asset to have and if my son will learn how to handle finances early, then it would be to his best advantage.

Work is really God’s blessing, kailangang alagaan at mahalin natin. Nobody knows when work opportunities will disappear, strike while the iron is hot kumbaga. I also believe that God is watching us and how we are managing the opportunities He gives us (including how we raise our kids!). That said, something’s got to give in order for us to fulfill our duties and at the same time, progress towards our dreams.

In short and uulitin ko, time is money. You cannot take back time nor buy it. Another thing I learned in this challenge so far is the real value of time. We can waste time dreaming, thinking of what ifs, and being afraid to try or start using time to make our dreams come true by praying, trying, and doing – most of the time dapat!

My 4 Month Progress

With all the things I learned and applied from this challenge, I was able to save and invest P10,000 every month, sometimes more than the amount, for 4 months. If you do the math, I have now set aside more or less P40,000 it may be small to many but for a mother like me – this is already a huge amount.

The plan was to save enough to travel to Australia with my son, there are two more months left in the challenge and by then, I hope to have P60,000+. It may not be enough to buy two round trip tickets (we also need our visas to be approved) but at the end of the day, I would still have funds that if I don’t use for travel – I can use for my son’s tuition fee or remain invested in Index Funds.

Index Fund Performance

Oo nga pala, I do not put the P10,000 every month in a coin bank or in a bank account. My SunLife Financial adviser recommended that I start and invest in the Index Fund. I began last June and regardless of whether the market is up or down, I still invest every month. By investing in the index fund, it is probable that my money will earn more compared to putting it in a bank.

Note that it is important that you understand the risk and not just the returns of investing. For one, the Philippine Stock Market recently dropped and other people have started to panic or create panic. Sabi nga ni Mr. Aya Laraya, aral muna bago invest.

I admit I was also troubled by the decline and felt a level of uncertainty, however I believe in my heart (and based on reading credible sources) that our economy will only get better in time. In our most recent session, I was very happy that our mentor discussed the issue and shared his own views. Including the analysis that historically, the market is down in the months of August and September (Ghost month) and start to pick up again by November-December (Christmas).

It made me feel more confident to continue working hard so I can continue to invest.

Stay tuned for the last two months of my #Money4Life Challenge, I thank God for the grace of attending all the sessions so far!

I look forward to the next sessions and hope to share a positive result of my #Money4Life challenge soon.

Mommy Lace is a blogger from the Philippines. She started this blog to share information on pregnancy, breastfeeding, childcare, family, and health.

How to Increase Your Income to Start Investing

Last month, I set a money challenge for myself and that is to save and invest for a trip to Australia. It is my first time to save for something specific. Many of us moms know how to save and be frugal in general but like me, choose not to have any specific goal.

Part of my challenge is to use an app called Wally and already, I have listed down every expense that I pay for: for myself, work, social, and family. Nagulat ako sa dami ng gastos. Last month, my expense almost matched the money I made. Wala na halos natira. Based on the app, 63% of these expenses are made for my family and 37% are personal or pang-sarili lang.

It’s easy to be discouraged by this situation especially when you know that you work hard, you are frugal, and you already limit your expenses. Still, your income is not enough. Remember, I need to save more or less Php 100,000 to travel to Australia with my son. Huwag nalang kaya at baka wala na akong pang tuition next year? Then I reread my previous blog post and felt my determination then to show everyone I can and I will.

Speaking with a Financial Advisor

Kendrick Chua, Sun Life Financial Advisor is teaching me what the Index fund is all about. He uses a newspaper to illustrate what companies are included in this fund. (I posted below his contact details).

The last time I met my financial advisor was December last year or should I say, only when I have extra money to invest. This happens rarely nowadays but that said, I guess it was time to receive money advice again. Like an old friend, I updated my financial advisor on my current situation plus the ultimate question: how can I save Php 100,000?

My target travel date is March 2017, he said that I have more or less six (6) months to make this happen. Here is his advice: I need to save and invest Php 10,000 every month for six months to reach my goal. Wow! P10,000, paano? Here are some ideas I came up with and have started doing.

Some ideas to increase your income (so you can start investing)

1. Sell your stuffalam ko na yan, pero kailan mo huling ginawa? Me – two years ago. Stuff easily accumulates in the house, most of them we don’t really need. I started taking photos of all the things I want to sell and posted them on Facebook for friends, neighbors, and colleagues to look at. Virtual garage sale!

Result: I keep all the money I made from selling unwanted and extra stuff. Now I have budget for the sari-sari store. Based on the Wally app, madalas akong bumili ng mga gulay at iba pang ingredients dito. Now that I use extra income to buy vegetables, etc. it is one less expense to deduct from my main source of income.

2. Upsell your skills – if you are a work-at-home mom like me, chances are you have other skills up your sleeves. For example, aside from writing you also know how to manage social media pages or even setup simple websites. To achieve my goal, I started offering other services to the people I work with. Maybe I can even look to apply for other part time online jobs!

If you are a working mom in an office setting, do explore other areas of the business operations where you might have the opportunity to help or add value. Also check if there are job openings within the same company that offer a higher pay. Do communicate your intent (and your goal) with your employer to give them the opportunity to help.

3. Know your value – it’s not enough to take on additional jobs, the jobs you take must be worth your time and effort. I read a similar advice from a fellow mom, published on Brighter Life. There are many potential part-time jobs but sometimes the pay is not substantial. Or, if you are already in this situation – don’t be afraid to negotiate a raise especially if you have established a good working relationship with your client. Sabi nga nila, hindi mo malalaman kung hindi ka magtatanong.

Tip: Use the Wally app to track your work-related expenses i.e. transportation, food, childcare (when you hire someone to look after your children), etc. to find out how much you really earn.

Changing our Money Mindset

Personal finance expert Aya Laraya once said that “mindset greatly influences behavior”. Before I set this challenge for myself, my mindset was that I am happy, I eat three times a day, I am okay and I do not need to change anything because I already know.

However, one month into the challenge, I realized I knew nothing about where my hard earned money was going (expenses) and how tight my income really was.

Let us change our mindset to believe that we can do more if we want to. It is not bad to be contented with what we have but it is not bad to dream of a better life either. Instead of dwelling about limitations like time, the new sacrifices we need to endure, and imagining the extra work we need to do to achieve our goals – let’s focus on the wonderful idea of having money for life.

Contact details of Kendrick Chua (Registered Financial Planner)
0917 521 2482

Do you have any more tips and advice on increasing income or reducing expenses? Please share them by posting a comment below.

Mommy Lace is a blogger from the Philippines. She started this blog to share information on pregnancy, breastfeeding, childcare, family, and health.

How to cope with family moving abroad

For 26 years, my youngest sister and I lived together. We shared the same house until I got married, gave birth, and when the time came – when she became a Mrs. herself. Her recent marriage was a happy day for me, it did not make a dent in my life because she and I would continue to live together – just like nothing happened. Her spouse worked abroad and flew a few days after the wedding.

My not so little sister Liza and her temporary home in Australia

For the longest time my sister and I happily shared stories and bills.  And when we were just getting the hang of being a financial duo in managing household finance from electric bills to Internet bills, her immigrant visa to Australia got approved. Suddenly, both my sisters are now in Australia. I, the middle child left all alone in a house that used to be filled with girl sounds of sisters chattering, laughing, and bickering.

Money changes when family members move abroad

No matter how hard I tried not to cry and be lonely when she boarded the plane, tears could not be controlled. What I can control though is my mindset and what better way to distract oneself than with the thought of saving more money. I love my sister but at this time, the thought of reduced electric consumption, trips to the grocery, and faster Internet connection were more welcome thoughts versus living in the past.

It’s just like how the song goes, now that you’re gone I have more room in my closet. In the case of bills, I’d like to think that having one less individual in the house would mean more room in my budget. If you are in the same situation like me, focus on this thought and not the thought of paying “all by myself”. Now that you are alone, you are more in control of the expenses and how you want to reduce them.

Some ideas:

1. Is it okay to downgrade your Internet connection now that there’s one less person using it?
2. Does your cable subscription need to remain on the same plan now that one less person is watching the TV?
3. Are you willing to rent out the now empty bedroom to a qualified bed spacer?

Using Apps to Manage Household Expenses

Although there is no app to cure the heartbreak of being left behind, there are now apps that can offer support in managing expenses. This app came highly recommended by personal finance expert and #Money4Life mentor, Aya Laraya. It is called Wally (available in iOS and Andoid) and it allows users to enter every single expense made on a daily basis. Aya says that listing down expenses is one of the first steps towards financial literacy.

I use Wally to record all household expenses, even purchases from the sari-sari store

My sister and I never listed down expenses, we were so focused on how to split and pay them. That is how comfortable living with siblings are, you know there’s always each other to count on (and blame) that you get away not paying attention to details. Well today, I no longer have the luxury to be lax about expenses.

Taking Financial Responsibility

With both my sisters now working abroad, it is always a passing thought that I lost the race, that relatives will see me at the odd one out. According to Aya Laraya, it is common practice for OFWs and migrants to offer financial support to family left in the Philippines. Many offer to support the education of nephews, nieces, and younger siblings.

Aya Laraya to OFWs: “It is not wrong to say no. Make relatives responsible for their own finances.”

While the prospect of lounging around the house doing nothing and waiting for money transfers and pera padala sound amazing, the more dignified road to take is one that develops responsibility and ability for one’s finances. There’s a saying, it’s not how much you earn but how much you save. Regardless of your location and the currency of your income, it is not impossible to improve your financial situation and quality of life.

Setting a Clear Financial Goal

Many of us already know how to save, maybe even invest in financial products like mutual funds. The question is, do you have a clear financial goal? I always told myself, I don’t have any goal because I don’t want to buy anything.  I just want to have enough for my son’s education, our healthcare, and my retirement. But how much would these costs? I am sure it would be a LOT of money, so huge of a number that I am afraid of even thinking about it – hence I always answered to my financial advisor that no, I don’t have a specific number in mind.

Now that I am in the cusp of change (much like our country with the new incoming president), change should also begin with ourselves. When it comes to financial goal setting, I challenge myself to start putting numbers beside each of my financial goals. #Money4Life coach Aya Laraya recommends to start with something small and rewarding, maybe a trip to Australia to visit my siblings?

Example of a short-term financial goal:

In the next 6 months, I want to have enough money to visit Australia with my son. For this I will need Php 100,000 (cost of 2 roundtrip tickets). I am willing to save x amount every month.

This will not only inspire me to be financially responsible but one that can allow me to actually be with the sisters I dearly miss. To be continued.

How about you, what do you want to achieve in the next 6 months and how much are you willing to save for it? How do you feel about investing? Please share your thoughts on your own financial journey :)

Mommy Lace is a blogger from the Philippines. She started this blog to share information on pregnancy, breastfeeding, childcare, family, and health.