To date, there are over 2 million overseas Filipino workers in all parts of the globe- and the figures are still rising by the day. Filipinos are known to be hardworking and service-oriented individuals and so other nationalities recognize the value and worth of our skilled and professional kabayan to bridge the growing workforce demand in their countries.
Given this situation, many Filipinos find jobs and better opportunities away from home in hopes of financial stability and to provide better support for their families. But this is not always the case. Some OFWs are able to manage their finances well and grow their savings while others do not. Why did this happen? Let’s take a look at the five Money mishaps of OFWs and how to counteract them:
5 OFW Money Mishaps and how to Escape Them
- Overspending
Or in some cases oversending – yes, sometimes, OFWs don’t give much thought into this. Because it’s for family, some OFWs don’t mind sending as much money as they can without setting aside for themselves. While this kind of mentality gives priority to helping others, it’s also important to understand that living away has its own challenges too, financially. There are a few ways to escape this big money mishap… For one, OFWs need to create a budget plan and to stick to it. This entails communicating with your family back home as to how much amount you can send for remittances while saving some for your daily expenses. It’s also important to have someone back home who can handle the remittances responsibly – it could be your wife, your parents, or anyone you know you can trust your money with. Part of their responsibility is to set aside money for ‘emergency funds’ that in case something unexpected happens, you know that they have some money they can use right away. Aside from this, OFWs should look beyond their monthly pay checks and strive to help their families establish other sources of income, such as a small business to help with their daily household expenses.
- Splurging on oneself
Perhaps this is the most common trap which most new and some old OFWs still fall for. The obvious reason is the added 0’s in the OFW’s pay check. Instinctively, people tend to buy things which they couldn’t before all thanks (or no thanks) to the higher salary they earn now as an OFW. The shift in lifestyle especially when living in a cosmopolitan city can also influence OFWs on where and how they spend their money. The reality of it all is that treating oneself once in a while isn’t such a bad idea until it becomes a habit driven by the desire to live in luxury and utmost comfort beyond your means and capacity. In order to avoid this nasty self-indulging trap, one should realize that as your salary increases, your bank savings should too. That way you can manage your finances better and use your money for long-term investments instead of impulsive buys.
- Showing off
Whenever OFWs or balikbayans visit the Philippines, say, for a vacation or even just an event that they need to attend, it’s common practice for some to bring home pasalubong (imported goods) for their friends and relatives. Some even go the extra mile to take their families out on extravagant feasts or shoulder expenses for big parties and reunions just so they can show off their newly-embraced status as a well-off member in the family. The sad truth is that many Filipinos assume that OFWs are rich and this only gives added pressure to our kababayan who are working really hard to provide for their families.
Going out and spending time with loved ones is always a great thing for OFWs and their families but lavish celebrations aren’t always necessary because there are many other things where you can invest your money on; besides – money won’t make up for lost time so make the most of it without having to expend too much of your hard-earned savings.
- Doing without insurance
The worst thing that could happen to any person, OFW or otherwise, is to lose their finances over an unforeseen medical or emergency condition. So aside from taking good care of your health, it’s also actually very important to set aside some of your earnings to get a life or medical insurance. This is especially helpful for OFWs who are living alone and are far from their loved ones.
- Not preparing for retirement
OFWs should understand that working abroad is not permanent (unless migration is the end-goal). They take their retirement for granted because they think they still have plenty of years ahead of them. But that shouldn’t be the case. Part of your savings should be for your retirement. No matter how long you intend to work, consider doing some research about retirement plans you can avail while working abroad. Most companies offer retirement plans for their employee’s tenure so that should be a good place to start.
We’ve heard several success stories of people who worked abroad and those who ended up with little or nothing just like when they were starting out. But there is a way to escape the latter… and that is through educating yourself properly (through financial management and literacy) and doing the right steps to help you get where you want to be.