One of the major exports of the Philippines for a very long time has been our Overseas Filipino Workers, or OFWs, mainly construction workers, domestic servants, medical professionals, and sailors.
The fact that they make an economic contribution through remittances is another reason why they are frequently referred to be “Bagong Bayani” or modern-day heroes.
OFWs typically make more money than their counterparts who work in the Philippines, which enables them to provide better lives for both themselves and their families. However, we are unable to avoid hearing the tragic tales of OFWs who, despite working hard for many years, have nothing saved to support them in their later years.
OFWs are the Philippines’ main export. Let’s talk about some financial management advice for OFWs and aspiring OFWs in this post.
Know Your Why. Plan Long Term.
Lack of a long-term plan for their lives as OFWs is one of the typical mistakes made by Filipinos working abroad. Usually, they simply follow the current.
When this occurs, our kababayans abroad are more susceptible to being persuaded by the new, foreign way of life, which results in lifestyle inflation.
Understanding your initial motivation for becoming an OFW is crucial. Why did you wish to work overseas, you might ask yourself? Are you certain that you will become a citizen there or do you want to return to the Philippines?
So what would you do if you decide to go back to the country? Are you going to start a business, make investments in other financial products, or become a landlord?
These inquiries will assist you in staying on track with your objectives, whether they are personal or familial. Make sure the goal is SMART.
Tell your family about your plans.
To give their family a better life, many Filipinos choose to work abroad and become OFWs. If they are married and have children, this becomes even more obvious.
The unfortunate reality is that they frequently turn into ATMs with the primary purpose of supplying, despite the fact that helping your family is a laudable goal and a fantastic chance for many.
Therefore, it’s imperative to let your family know what you have planned. Early on, establish rules and boundaries. Make decisions regarding your plans, the amount of money you’ll send home as remittances, and your length of absence.
You might consider taking your family if you intend to work overseas for an extended period.
Set a Deadline
It is imperative that you set a timetable if you decide to become an OFW with the intention of returning home soon, especially if you have families and developing children.
Because if you don’t set a timetable for your return, you might not realize how quickly time passes. Then you will realize that you have aged twenty years and that your kids are now grownups.
Your financial situation must be your top priority when choosing your deadline. What will you do once you return to the Philippines and how much money will you need to save to live comfortably there?
Think outside of the peso.
When negotiating or accepting their pay, Filipinos who travel overseas for work frequently have a bad habit of thinking in terms of pesos.
Will you accept, for instance, a salary of P100,000 per month (after conversion) if you work in a foreign country? Because that sum is already double the monthly salary of folks in the Philippines who make roughly P50,000.
What happens, though, if the cost of living in the country you’re considering moving to is roughly P80,000 but it’s only P30,000 here? If so, it is only a break-even situation.
Researching the cost of living in your potential country will help you choose how much to demand to make your sacrifices overseas seem justified.
Create a budget and follow it.
Another critical ability you must develop as an OFW is budgeting, particularly if your pay increases unexpectedly.
You can simply view your finances and won’t ever have to wonder where your money went thanks to a budget that will assist you decide where your money will go each pay period. Your budget can be managed with the use of a spreadsheet or app.
Family/responsibility funds, vacation funds, retirement funds, company savings, and many more are among the budget categories to take into account. So, if you want to return home sooner, save more.
Invest in assets, not liabilities.
I frequently notice that OFWs prefer to purchase liabilities over assets. Many would construct massive homes or cars they hardly ever drove.
According to what I’ve learned, some of them spend their money on mansions or automobiles that they’ll only use for a few weeks a year because they want to feel as though they have made a lasting legacy in the Philippines that will serve as a symbol of their achievements or prestige.
However, some people are wise with their money and invest in assets like real estate buildings that will generate a passive income or help them preserve money for a future venture.
Being an OFW in the modern day is advantageous because of the Internet. They are now able to purchase a range of investment items, including equities, bonds, MP2, UITF, mutual funds, cryptocurrency, and other financial goods.
Save Up Going-Home Fund
Going home to the Philippines to see their loved ones is something many OFWs who are fortunate to have extensive vacation days look forward to.
However, they frequently blow their whole savings on a two-week vacation. The cycle of working and saving will then be repeated after they return from their international trip. Therefore, it’s crucial to include a separate vacation fund in your budget categories to save your savings for your potential future permanent return to the Philippines.
Avoid vices like gambling.
Because they are so addicting, gambling and other vices are among the worst and riskiest money-wasting practices.
I’ve heard heartbreaking tales of OFWs who were deeply indebted as a result of their gambling addiction, which had negative effects on both their personal and professional lives. So, if you’re an OFW, resist the want to gamble and the pressure from your peers. It would be simpler to experience FOMO than the damaging effects vices can have.
Avoid Living in Luxury
There’s a phrase that says saving money is more important than how much money you make.
If you make P200,000 a month but spend P190,000, for example, you are just as affluent as a worker making P30,000 but saving P10,000. If you make P200,000 a month but spend P220,000, on the other hand, debt is progressively digging you into a hole.
Your habits and discipline will ultimately determine how well you handle your finances while living abroad. To be more in charge of your spending, learn more about the Kurot principle. Keep in mind that time may be either your best friend or your worst enemy. You wouldn’t want to live a luxury lifestyle abroad and then retire without any funds.
Be Wary When Borrowing
There is a presumption that if you work abroad, you are wealthy. Whether it’s true or not, members of your family, friends, and even strangers will ask you for a personal loan.
It is important to think carefully before lending in this situation since, more often than not, you might never see the money you lent again. Even if you have a big salary, you should use caution when lending money because it won’t last forever. You will eventually get elderly and have to retire.
Being referred to as a kuripot can occasionally be preferable to losing your hard-earned money to “professional borrowers” who don’t want to pay you in the first place.
Please read: TOP PAYING JOBS FOR OFWs
Conclusion
Working abroad as an OFW is challenging since you have to sacrifice time with your family to provide for their future. Consequently, it is imperative that you properly organize your trip. It would be ideal if you also had sound financial judgment. Save as much as you can, and start putting money into assets rather than liabilities.
Next, you need to look after your health because making sacrifices won’t be worthwhile if you use your funds to pay for medical expenses. Last but not least, constantly ask God to be with you and guide you in the correct direction.
