"House or Money, Which Do You Prefer?"

     If you were to choose, would you rather have a house but has little money, or would you prefer to have plenty of money but has no house?

• Living from one place to another

    When I was 6 years old, my parents were able to build a small house for our family, thanks to my father's income from working abroad. But, when he returned here in the Philippines to pursue his teaching career, we moved out of our tiny house in the province to a rental house in the city. Though my father was a public-school teacher, I know that he could not afford to build a house for us because we could not even afford to pay our monthly rent, which made us transfer from one house to another until I was in college. 

    Based on this experience, I have then dreamt of having my own house someday. However, when I got married, my husband and I started living together by renting a house. We rented out a house for almost 3 years since we can't afford to buy or build a house of our own yet! Luckily, after 2 years, we were able to purchase a small lot and started building our dream house.

•      Building the foundation

      Since we do not have savings and we rely solely on our monthly salary, the only way in which we could start building our dream house was by taking out salary loans. At first, I thought that 250,000 pesos is more enough to build a tiny house (Well, I only want to have a small space where we could eat and sleep), but my husband insisted that we build a larger house which could live in for years. I ended up agreeing with him, so the inital amount we've loaned out was spent only on the house's foundation. After that, we had to stop the construction because we had to prepare for the coming of our second child. The spread of the coronavirus also confined us in the house, so we had no choice but to continued living in a rental house.

• From the ground to the top

        After a year, we've decided to take out more loans to finish the construction of our house. Our second loan was spent for the flooring, the third is for the walls, and the fourth one was for the slab-- we've actually borrowed from different banks and institutions to fund our dream house. Once our house was built, we borrowed for the fifth time to buy furniture and to paint the interior.  YES! Finally, we were able to live in our new, own home. But, do you know what's painful? My husband and I both ended up having 5,000 pesos monthly net pay-- when combined, we only have 10,000 pesos monthly income. 

• With a house, but has no money

        Finally, we have our own house... BUT, we now have to live with a 10,000 pesos monthly budget-- to pay bills, buy food, pay our nanny, and to buy milk, diaper, and different essentials for our three children!

        If you have already read my article on "Have I Only Kept My Pay Slip Virgin!", you will see that prior to marriage, I already have difficulty managing my finances, so it is not a surprise that I did not care whether or not we reach our limit. And now we're actually doomed!

        

                Read: Mammy Jean: "Have I Only Kept My Pay Slip Virgin!"

• If I could go back...

        God knows how grateful I am to have built a house I can call my own. But recently, I realized that we have actually rushed things and now we have to suffer the consequences. So, if you are currently renting or living with your relatives and you wanted to build or buy your own house, you can consider the following realizations I had:

1. We should have compared and listed the prices of materials, and considered which fits our budget.
2. We should have stuck on building a smaller house first (since we initially wanted to stop renting), and then plan for expansion once we have enough savings.
3. We should have avoided buying new furniture and used our old ones instead.
4. We should have stopped taking out loans and halted the construction when our deductions took more than half of our gross income.
5. We should have had a budget to know how much more can we spend.

        Since we cannot go back in time to do these things, all we can do now is to find an extra income to cover our monthly expenses. We might not have money now, but as long as my husband and I support and understand each other, we could overcome any obstacle.

        I will soon share the side hustles we've done to recover from this great financial burden. For now, let me tell you this-- whatever your choice is, whether you want to have more money or to have your own house, make sure that you are ready to face the consequences of your actions.

"Have I Only Kept My Pay Slip Virgin!"

If there is something that I regret the most about my previous financial decisions, it was when I lost my pay slip's virginity due to my lack of financial literacy. What I mean by losing my pay slip's virginity is by having it dented with salary deductions I've incurred from multiple loan applications.

• From Private to Public School

It was in 2015 when I left the private school where I was teaching to apply as a public-school teacher. From 9,000 pesos monthly salary in the private school, my pay suddenly increased by 10,000 as I luckily got an item to teach in a large secondary high school. The salary of Teacher I then was 19,077 pesos which gradually increased through the SSL V Program of the former President Rodrigo Duterte. 

• Upgraded Lifestyle

Though my salary increased more than a hundred percent, I started upgrading my lifestyle, so once I received my first payment (which was accumulated and was released after three months), I bought my new laptop, smartphone, bags, shoes, and clothes. I thoughtlessly spent everything in shopping and dining out with my family thinking that I will receive my salary regularly for the succeeding months.

After a few months of being a one-day-millionaire, we finally received the copy of our appointment. This made us eligible to apply for salary loan. This term is actually new to me, but as time passes, I started to rely on and get addicted to it.

• Introduction to Salary Loan

After a few months of spending my whole monthly salary, without saving anything, and just patiently waiting for my next pay, I happened to talk to my colleague (who was appointed to the same school together with me) and he shared how he was able to buy a new car and a laptop. That was how I learned that by presenting my appointment and 3 latest pay slips, I could easily apply for a salary loan in any bank with an interest that is as low as 7.5% per annum and payable for 3 years. 

• Salary Deductions

"Aha!" I secretly smiled and started thinking of how much I should borrow to buy the things that I really want to buy! That weekend, I was already in the bank together with one of my colleagues who will sign as my comaker. My first salary loan was 100,000 pesos which I spent in less than a month for material things. Looking back, I wasn't able to buy any valuable items or invest my money in some profitable investments. I only spent it on travels, eating out, buying clothes, and treating my friends and families. After 2 months, my pay slip was no longer as virgin as the monthly amortization for my first loan started to get deducted and reflected on my pay slip.

• Loan "Addiction"

Months passed by and I reapplied for an additional loan on the same bank. All I wanted to do was borrow money so that I could buy whatever comes in my mind. I did not care about the deductions until I realized that my net take-home pay is nearing the minimum which is 5000 pesos. That was when started to ask myself where I spent all those money, because after 3 years of being a public-school teacher, I was only able to buy myself a motorcycle, a laptop and a phone.

• Feelings of Regret

After accumulating too many loans, I started to regret applying for it from the very beginning. If I had only known how to use money correctly, by investing and saving, I should have been able to maintain my pay slip's virginity. Well, as they have said, "Nasa huli ang pagsisisi" (Repentance comes later), so now I had to face the consequences of my actions and I hope that soon, I could achieve financial independence.

• The Lesson

If I could go back in time and undo my "bad" financial decisions, I would definitely do the following instead:

1. I would never take out a loan for my personal consumption, unless I would use the money to generate more income such as starting my own business.
2. I would put a portion of my salary in time deposits which could generate more dividends.
3. I would spend money within my means and would strictly follow a budget.
4. I would learn how stocks, cryptocurrencies, and other promising opportunities works before investing my "extra" money on them.
5. I would engage with side hustles which could generate extra income.

Right now, I'm doing my best to get out of all the debts I've incurred, and one of the most helpful sources of the money I use to clear off my debts are my side hustles such as working with Quadrant Resource, Clickworker, Involve Asia.

Keep posted as I give regular updates in my journey into becoming debt-free!