If Your Income Stopped Next Month: 3 Numbers Every Filipino Family Should Know

Imagine the main earner in your household cannot work for a few months. Maybe it is an illness, an accident or a layoff. Rent or amortization, school fees, groceries and electricity do not pause.

Most families have never put numbers on this. You do not need a spreadsheet or an insurance product to start. You need three numbers.

Number 1: Your monthly must-pay costs

List only what must be paid even in a bad month:

• Housing (rent or loan amortization)
• Food and utilities
• Tuition and school expenses
• Transportation to work and school
• Loan payments and existing premiums
• Medicines or other regular health costs

Leave out dining out, subscriptions and extras. This total is your must-pay month.

Number 2: How many months your savings can cover

Divide your cash on hand and easily accessible savings by your must-pay month.

• Under 3 months: your family is exposed to a short disruption.
• 3 to 6 months: a common starting target for an emergency fund, but your own situation may call for more or less.
• Beyond that: look at longer-term needs such as children's education and retirement.

If this number is low, building the emergency fund comes first. Our guide on how to build your emergency fund walks through it.

Number 3: What you are already covered for

Gather what you actually have, in writing:

1. Government benefits you contribute to, and what you need to file a claim
2. HMO or group coverage from your employer, including limits and what happens if you resign
3. Any individual life, health or critical illness policies, with the benefit amounts and the policy contract

Mark each item as covered, partly covered or unknown. Unknown items are the questions to take to your HR department, your insurer or your advisor.

Put the three numbers together

Your must-pay month, your months of savings and your list of known coverage give you a first picture of the gap. If the gap is large, you can decide what to fix first: cash reserves, health coverage, or income protection for dependents.

The Protection Gap Calculator can give you a rough estimate to start the conversation.

A useful next step this week

Set aside 30 minutes. Write down your must-pay month, divide your savings by it, and list your coverage. Do it together with your partner if you have one. A shared picture makes the next decision easier.

General education only. This article is not a quotation, confirmation of coverage, or financial, legal or tax advice. Benefits, eligibility and premiums depend on the provider, the product and the contract.