Don't want to be an OFW forever? Manage your money right
Some people belong to a family of doctors. Others, to a family of politicians.
How about me?
I belong to a family of OFWs. My parents are OFWs. My aunts and uncles are OFWs. My second cousin’s boyfriend is an OFW. Heck, even my neighbors are OFWs.
It’s no wonder why this is so. The Philippine government estimates the number of OFWs at 10 million. This means that the OFW population accounts for roughly one-tenth of the population of the Philippines.
If we look at the recent survey of the Bangko Sentral ng Pilipinas, 46.6% of OFW remittance-dependent families stated that they put a portion of the remittances they receive into savings.
Wonderful news? Absolutely.
But what about the remaining 53.4% remittance-dependent families? Roughly millions of OFW families don’t allocate a part of their remittances for savings.
This is one of the reasons why OFWs still continue to work abroad, even when they’re already old, tired and burnt out.
Yes, they send money, but it’s either they don’t save it, or their families don’t save it.
If you don’t save your money now, your money won’t save you in the future.
Aside from this glaring concern, there are 5 other money mistakes that most OFWs are prone to committing. Here they are, along with their corresponding money management tips.
Don’t just dwell on the problems. Focus on the solutions also.
1. Depending on their relatives to manage their finances:
Most OFWs tend to send majority of their income back home. While this is good for the economy of the country, it’s not recommended for an OFW’s financial future.
The family will continue to be remittance-dependent, thereby OFW-dependent.
On the other hand, the OFW will think his family can manage his finances, so it’s okay to be family-dependent.
See the cycle here? It’s a co-dependency cycle! Ultimately, it doesn’t benefit both parties. The family will be tempted to do reckless spending, while the OFW is lured to not do any financial planning.
a. Establish an arrangement with your family beforehand.
Work on a monthly budget with your family. Tell them your monthly salary and the monthly remittance that you’ll send home. Don’t be a human ATM. You’ve suffered and worked so hard for your money.
Let them know that you won’t work abroad until you’re 60! Make them understand the need to save for the future.
b. Do priority purchasing.
Instead of depriving yourself of your personal luxuries, do priority purchasing while still saving money. It’s all a matter of prioritizing. Spend on what you love; scrimp on everything else.
For example, if you love dining out in a restaurant, then do it. But be sure to cut back on electricity, cable, shopping, groceries and other budget items not in your priority list.
2. Believing that the OFW life will last forever:
Are you really okay with just seeing your loved ones for 30 days out of 365 days?
Right now, are you sure that if you stop working, you and your family can manage to sustain the lifestyle that you’re used to?
Life after being an OFW doesn’t happen magically – you have to prepare for it in advance.
a. Draft your life dreams and give them all a deadline.
Goals are just dreams with a deadline. If you can’t measure what you want, what makes you think that you can achieve it?
Start by enumerating what you specifically want to achieve, in what year you want to get it, and what steps you will take to attain your goals.
b. Work on a second source of sustainable income.
OFWs start their businesses after finishing their OFW life. This is not a good idea. Not to be a downer, but there’s a big possibility of you failing in your first business. If you fail, what happens, then?
Your savings can get wiped out. By that time, you won’t have an overseas job.
Start looking for business ventures today while you can still depend on your income to help you get back on your feet. As Google’s Eric Schmidt says, “Fail early. Fail without too much money. Fail without too much time.” Review and modify as necessary. Then, iterate.
Why? So you can succeed fast, too.
3. Taking on an overwhelming amount of (bad!) debt:
You know you need to stay away from bad debt like credit cards, right? But what about good debt?
Good debt can give you an investment that increases in value and gives you money in the future.
However, this doesn’t mean that you should hurriedly sign that real estate deal.
a. Do your homework; don’t just copy your seatmate.
Getting a loan for a real estate property is a good debt if and only if you know how it works.
Yes, it has the potential to be a good investment – but how good? Get the figures. Know the costs and the fees. Ask if there are hidden charges. Read the contract and ask about conditions that you don’t understand. Find out the real estate status in our country.
Don’t just get a home loan because your co-workers got one. Don’t just sign a contract because the agent says “It’s a good investment, Ma’am/Sir!” Don’t just borrow money and expect divine intervention.
As I always say, if you don’t understand, don’t shake his hand! – Rappler.com
Lianne Martha M. Laroya believes in better days. She founded The Wise Living to educate fellow 20-somethings on self-development and money management without boring them to girly tears. Hey, she's going to publish her book this year too! Connect with her on Twitter @MsLianneLaroya!