According to POEA’s latest OFW statistics, more than 1.8 million workers were deployed in 2015, which is higher compared to 2014. With millions of workers working overseas and earning in dollars for a living, how come more and more Filipinos are willing to seek for greener pastures and leave the country for better employment?
There are various factors for this phenomenon and one of this is poor money management. Blame it on the “culture,” but not all OFW families are able to put remittances in savings or investments.
Here are common money mistakes committed by OFWs – plus tips on how to avoid it: 1. Over-remitting
Most OFWs do their best to minimize spending and send a big chunk of their salaries to their families back home. Unfortunately, you don’t know where the money is going and yet, you keep on sending. In case something happened to you, you only have little left on your savings since almost everything is sent to your family.
How to solve it: Set a budget for yourself, your savings, and remittances – and stick to it. Don’t feel obligated to cover the medical or educational expenses of your mother’s cousin’s daughter. More importantly, encourage your family to invest the money or put up a small business you can all manage to reduce your remittances.
2. Keeping up with the Joneses
Working overseas increases your purchasing power. You are earning more than what you can earn in the Philippines, which means a new pair of sneakers or buying that watch you’ve been eyeing for years won’t make a big dent in your salary. Unfortunately, this mentality will lead you nowhere and before you know it, you are unable to save something for yourself.
How to solve it: Take it easy on your spending even if you are earning more. You don’t need a new pair of shoes or send Balikbayan boxes full of signature brands to your family every month. Remember, budgeting is key, so make sure you stick to that.
3. The pasikat mentality
Every time you go home, it’s a celebration. All your family, friends, and relatives will show up and ask you about life abroad. The harm starts when you always pay for everything – restaurant bills, tickets, and shopping with the family.
How to solve it: Being man of the hour is great, but you don’t need to answer for all the expenses while you’re in the Philippines. Go back to setting a budget before going home and make sure that all expenses are accounted for. You don’t need to treat everyone just because they get to see every two years only.
4. Wrong investment choices
Putting your money in a savings account is fine since cash is readily available. Nonetheless, placing your hard-earned money in savings alone will not yield extra income.
How to solve it: Don’t put all eggs in one basket. Explore various investment options such as UITF, real estate, or stock market, and know the corresponding risks and returns to help you find out the best ones for your money.
Remember that life as an Overseas Filipino Worker will not last forever. Take note of these mistakes and make sure you follow the how to avoid tips to help you save for the rainy days.