Eight Reasons Why OFWs Have A Hard Time Saving Money
Working as an OFW has its benefits. You get to travel to another country to pursue your professional aspirations, while also having the opportunity to work with others from vastly different cultures. One of the main issues many OFWs face is saving money while working abroad. It is possible to save money, and set yourself up for a strong financial future while serving as an OFW. This post will uncover the top eight mistakes OFWs make in regards to saving money. If you can avoid these mistakes, you have a good chance of being financially successful in the future. Below are the 8 Mistakes Many OFWs Make:
1. Believing You Will Be An OFW Forever
Being an OFW is an outstanding opportunity for you to advance your career and make good money, but keep in mind that being an OFW is considered temporary employment. This means you are subject to job instability. If a problem regarding your employment status were to arise, you could find yourself out of a job in an instant. If you don’t have savings built up, a situation like this could put a major financial strain on you and your family.
2. Not Having A Savings Plan
It’s essential you save money in addition to the remittance you send home. One great way to ensure you save is to open a savings account, such as a BDO savings account, before you leave the Philippines. Put a portion of your salary into a savings account, where your deposits can earn interest. Make it a habit to save before you spend.
3. Taking On Too Much Debt
Not all debt is bad, but there is such a thing as too much debt. It may be tempting to rack up credit card debt given your increased salary, but this type of debt can quickly become unmanageable. Consider taking out debt that could provide you with value in the future, such as a loan to purchase real estate for rental property.
4. Opt Out Of Having Insurance
A major mistake many OFWs make is opting out of insurance, viewing it as an additional and unnecessary expense. If you are uninsured, a medical emergency could result in a huge out-of-pocket expense, which could place a major financial burden on your family. Think of insurance as a necessity, rather than an option.
5. Not Looking Into Investment Options
According to the Consumer Expectations Survey for 2017, out of the 485 households surveyed that receive OFW remittance, only 6.2% have investments. Not seeking out investment options is a mistake that could have detrimental effects on your retirement. Various investment ideas you can look into include real estate, UITFs, mutual funds, stocks, franchises, and more. Think of investments as the key to financial freedom in the future. The sooner you seek out investment opportunities, the sooner you can relax knowing your hard-earned money is growing.
6. Letting Relatives Manage Finances
Many OFWs make a critical mistake when they let their family manage the finances back home. Many family members of OFWs do not know how to handle money, which can detract from your hard work as an OFW. If you are going to allow your family to manage the remittances you send home, make sure the person you choose is money-wise, and shares the same outlook on savings as you do.
Many OFWs and their families live pay check to pay check. Stop spending money on unnecessary things, and educate your family to do the same. If you can cut unnecessary spending, you will make great strides towards achieving your savings-related goals.
8. Having a “Pasikat” Mentality
When you go home, your family and friends will be excited to see you and hear all about your experiences abroad, but that doesn’t mean you must pay for everything. It’s ok to treat your loved ones, but when you start picking up all the bills that’s where the trouble starts. Living a lifestyle you can’t afford, and spending money you don’t have is a sure way to strain your finances and jeopardize your future.
You’re In Control Of Your Financial Future
Being an OFW provides you with an outstanding opportunity to improve your current and future finances. If you can avoid the eight common mistakes listed, it will be much easier to build your savings as an OFW. One of the best things you can do to build your finances is seek out investment opportunities. Consider one or more of these top investment ideas for OFWs to get started. If you make smart financial decisions while you are working abroad, you can avoid becoming another statistic.
This article is contributed by John from iMoney Philippines,the country’s leading financial comparison site. Our primary goal is to promote financial awareness by providing relevant and up-to-date information on financial products and services, its proper use, as well as general money saving tips and investment insights for everyone’s benefit.