Despite their hard work, it has been reported that one out of ten OFWs are broke, while most of the rest have no savings. Such stats only prove just how much Pinoys abroad need to learn proper money management. And one of the first steps to make when learning money management is knowing what mistakes to avoid. For your convenience, listed below are some of those pitfalls.
Not Making a Budget Plan
Just because you’re earning big abroad doesn’t mean you can forgo having a budget. In fact, the larger your salary is, the more important having a budget is! By crafting a budget plan and sticking to it, you’ll be able to monitor your cash flow and perhaps allow you to save extra cash for future use. Here’s a quick way to start: Itemize and list your usual monthly expenses. That way, you can set a realistic budget for yourself and your loved ones at home.
Living Above Your Means
Another mistake OFWs and their families make regarding money management is living above their means. Reckless spending won’t do you any good. In fact, it can lead to financial ruin for you and your loved ones. So while working abroad, discipline yourself to not spend as if your money will not stop coming. And ask your family at home to do the same. By living a simpler life, you’ll be able to better handle your cash.
Taking On Too Much Debt
OFW loans and financial instruments are there to help OFWs like yourself get a financial boost whenever necessary. However, you need to consider many factors before applying for one. Sadly, many OFWs fail to do this, incurring large debts even before getting deployed abroad. This results in many of them knee-deep in credit and working hard hours to repay it (not to mention scratching a living for their families at home). Incur debts only when absolutely necessary, and don’t borrow more than you can repay.
Buying a House
Technically speaking, there’s nothing wrong with using your OFW savings to buy your dream home. Take note, though, that the house you’re living in isn’t an asset. The nature of an asset is that it makes you more money, and any property you buy for personal use won’t fit that criteria. Again, there’s nothing wrong with buying a dream house. But if you can’t afford it (meaning you can’t pay for it in full in the long run), then better use your savings elsewhere.
Many Pinoys abroad and at home still frown upon investing today, thinking them unstable and too complicated. Nothing can be further from the truth! Not only is investing in stocks pretty straightforward (buy when stock prices are down, sell when they’re up), but it’s also one of the most stable investments you’ll ever make. OFWs like you shouldn’t be afraid of the stock exchange. Learn how it works, and see you hard-earned money grow.
By not making any of these mistakes and teaching your family at home to do the same, OFWs like you will be able to build a good financial nest, as well as enjoy thriving careers abroad.
Although he graduated with a degree in Electronics Engineering, Rory League has always been a writer at heart. When not working as a writer, you’ll find him binge-watching anime, movies, and TV shows if not playing with his lively canine Charlie.