The danger of being a co-maker in a loan

I did a stupid thing five years ago: I became a co-maker in a co-worker’s loan. It was an act of kindness. Loans were extended to the employees of the company I was working for and since we’re in the Finance department, we were prioritized by the bank. So to race ahead of other employees, we signed loan forms right away. Since there were only four of us in Finance back then, we asked one another to become co-makers of each other. I was just unlucky to become the co-maker of this former staff of mine.

I, along with the other two of my Finance team, already paid the loan within the payment period given to us. Only one is still unpaid to date. My former staff, the one whose loan I was the co-maker of.

I thought she was able to pay off the loan two years ago. Apparently, after the last time I saw her, she stopped paying. Until I got a call yesterday from a lawyer handling her loan. This time around, I was lucky because my former staff is now working for one of my good friends. I was able to track her down easily. Today, she paid a percentage of her loan. I am monitoring her payments this time around. I was stupid not to have done this a long time ago. This time around, I won’t be the stupid one anymore.

I have an unsolicited advise to all of you (one I know most of you already know way back when): don’t be a co-maker to a loan! Because chances are, you will end up the loser in the whole deal. Unless, of course, you know the capacity of the person you are co-making a loan with. Otherwise, save yourself the headache and DON’T!

Last will and testament

With all the talks about Michael Jackson’s will, you are given the chance to realize that a last will and testament is very important. Regardless of how little you have, you need to be able to clearly define to whom it will be given once you are gone. It is better to be prepared for any eventuality so that the ones you will leave behind won’t have a hard time determining which is which and to whom it will be. Or worst, fight for the biggest chunk they can get from your estate.

This talk about a last will reminded me of a neighbor’s large family that he left behind. His children fought like dogs out for a large bone once he was buried. They were fighting for the house. It was determined later on that he left a last will stating that his house will be subdivided between his children and that should they continue to fight for sole possession of the house, it will be turned over to a relative that took care of him while he’s sick. That settled the issue.

Lesson learned: It doesn’t matter when you will die, or how much you will leave behind. Make sure you have a last will and testament that you will leave that clearly defines the division of your estate.

Do you have a savings account?

Do you have a savings account and do you have enough savings?

I was watching TV Patrol this evening and they reported that only 1 out of 10 Filipinos are saving something for the rainy day. Sad. But that’s the reality. A couple of people were interviewed and one of them said that what else can she save from her meager income if she is earning only a minimum wage and she has 2 kids to feed. She said that her bank account has zero balance and when you really think about it, she even has a negative balance if she can only make an overdraft.

It is so sad to hear that but it REALLY is the truth. When you are the breadwinner of the family, it is hard to save some money because there is nothing more to save in the first place. Most of the time, breadwinners incur loans and various credits just to make ends meet.

Do you know that I am one of those 9 people who does not save for the rainy day? Oops, wait. Did not. I am saving some now. Before I was introduced to monetizing blogs, I lived from paycheck to paycheck. Those entries I post regarding payday loans? Happened to me. A few days before the next payday, I always find myself short of budget and would be asking friends or relatives for a loan. And because I needed to pay for the loan, my budget would be short once again. It was a vicious cycle. Thank God for make money online programs, I was able to break free from the cycle.

And have you noticed that most Filipinos, when you ask them if they have a savings account, they will say yes but it really is just their payroll account. Most Filipinos who are not working or is being paid in cash don’t have a savings account. The reason is, they do not have enough money to maintain one. Most banks require a minimum maintaining balance of 5,000 pesos and that is a lot of money for an average Filipino.

Someone from the Finance Department was interviewed and he said that every Filipino should at least save 33 pesos a day and it will amount to 1,000 pesos a month. Hmm… it is a good idea for those people who can spare 33 pesos a day. I don’t think that those minimum wage workers can spare that much from their daily budget. Skip lunch or dinner probably? Or the government can probably lower the tax rates so we can save our tax payments instead. Good idea ‘no? 😉

I have started saving some money. And I plan to continue it. Saving is one of my goals for this year. How about you?

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