No one ever dreams of becoming an OFW, not really. We might dream of traveling the world or working abroad, but I can’t imagine anyone willingly leaving their families behind to work in the US, Canada, or Australia for months, or even years at a time.
Filipinos become OFW’s for one reason and one reason only: to provide a better life for themselves or their families. The economy might be picking up, but there are still far too many of us who don’t feel the effects. Professionals like teachers, nurses, engineers, and even quite a few doctors are paid rather poorly here, so you can hardly blame them for bringing their talents abroad..
When every dollar you make translates to at least Php30 more back home and you’ve got three kids to feed, clothe, and send to school, you’d probably make the same choice.
Still, being an OFW or having an OFW in the family doesn’t guarantee financial security, at least not for the long run. As my Economics professor liked to say, it isn’t how much you earn, but how much you save. So, you can pretty much rake in a six-figure sum every month and still end up broke come retirement.
Now, what scenarios can threaten your financial future as an OFW, and how can you get around them? Read on and find out:
1. Assuming that the OFW life will last forever.
Regardless of how stable your job as an OFW is, it is but temporary employment. If your employer suddenly decides to downsize or if diplomatic issues cause your host country to revoke your working visa, you may suddenly find yourself out of a job.
How to deal: Stay informed and make a contingency plan. Pay attention to the goings-on in the company you work for and in your host country. If it seems that your employment status could be endangered by current events, come up with your own plan B.
2. Having no future goals.
Again, being an OFW should just be a temporary phase in your life. Those years you spend abroad should be a stepping stone to future prosperity rather than your desired destination. There’s no surer way to end up poor in retirement than having no plans whatsoever to provide for yourself then.
How to deal: Visualize your own comfortable retirement. Do you see yourself running a small-medium business back home or would you prefer to live off dividends from a pension plan and/or stock holdings? Whichever option you prefer, it’s advisable to start planning for it as soon as you get yourself a job.
Consult with a qualified financial adviser to come up with a figure that you need to have by the time you reach retirement age, and work on a feasible plan that’ll help you accumulate that amount. Consider the minimum monthly income you need, how much you need to set aside for yourself, and how much your family needs back home.
3. Depending on your relatives back home to handle your finances.
Look, OFW remittances are great. They support lots of our countrymen and boost the economy.
However, these can sometimes result in a vicious co-dependency cycle. Families on the receiving end can become dependent on the remittances while the OFW breadwinner leaves the management of the said finances entirely to his or her family.
How to deal: Actively discuss your financial plans with the family. Talk about how much they should set aside for emergencies, for daily expenses, and most importantly, for future business ventures or investments. You should also open up a bank account for each of these expenditures so that you can monitor where your hard-earned money is going.
Yes, you work hard to give your family a better life, but giving in to every single one of their whims is a different story. You may want to give your kids an occasional treat once in a while (e.g., for their birthdays or for achieving high grades in school), but you shouldn’t let them grow up expecting handouts from you to make up for your absence.
How to deal: Teach your family to save and make them accountable for their expenses, especially when they ask you for money after you’ve just sent them a substantial remittance. Resist the urge to give in just to placate them too. They might try to guilt-trip you into buying them the latest Nike trainers, but remember that being a parent sometimes means enduring your kid’s temporary hatred when you need to teach them a lesson.
5. Lifestyle inflation.
One of the wonders of living abroad is having access to things that aren’t available in the Philippines. Some items are also much cheaper abroad, so it’s easy to get carried away when shopping, even if you haven’t had a raise yet. That spanking new credit card makes it all too easy to forget how much you’ve spent on your shopping trips too.
How to deal: Just because you can afford it doesn’t mean you should buy it. Think long and hard before you spend money on something as frivolous as a designer bag or a piece of jewelry. If you need to dip into your emergency fund or reduce your contribution to your retirement savings to buy it, you probably shouldn’t go through with the purchase.
6. Taking on too many bad debts.
Not all debts are made equal, and neither are all of them necessarily bad. Getting a property or real estate loan for a budding business, for instance, is considered a good debt because it’s an investment that could pay off well in the future. Credit card bills for your latest online shopping binge are, on the other hand, a bad debt since you are buying things that depreciate in value, and with money that you don’t have to boot.
How to deal: Know the difference between a good debt and a bad debt (see above), and minimize your expenses on the latter. Keep your credit card at home when you go to the mall so that you won’t be able to charge unnecessary purchases to it so easily.
7. Keeping up appearances.
Long before Facebook taught us how to curate the best possible version of our lives, there was the “pasikat” mentality. Literally translated as “show-off,” this refers to the compulsion to prove that one is prosperous, whether that’s actually true or not.
Why else do most OFW’s have a grand homecoming where they shower their relatives with imported goods as pasalubong (hello, Victoria’s Secret and Bath and Body Works!) and treat the entire extended family to dinner at Vikings every night? Okay, so not every night, but you get the picture.
The exchange rate might mean that you have more moolah to spend during your vacations back home, but all those restaurant bills can quickly add up and you might end up being out of pocket long before you’re on the plane back to Oz.
How to deal: There’s nothing wrong with treating your loved ones to a good meal or a good time, especially when you’ve saved up to do so. However, as with anything, it would be best to stick to your budget. It might also help if you don’t tell the entire barangay that you’re coming back home so that they don’t line up at your doorstep with their palms held out.
The main point of your vacation is to spend time with your family and friends, not to ruin yourself financially by showing off to people you don’t really care much for anyway.
8. Putting all your eggs in one basket.
Tempting and easy as it might be, don’t pour all your money into one investment. Should things go wrong with it, you may be left with no recourse to earn it all back.
How to deal: Diversify. There are so many ways to grow your money. You can invest in real estate and rent out properties, speculate on blue-chip stocks, buy shares of mutual funds, or perhaps even put up a franchise to generate further income streams for you and your family. The more income streams you have, the sooner you’ll be able to achieve your financial goals and go back home and the safer you’ll be from inevitable fluctuations on the market.
9. Disregarding the need for insurance.
Life is unpredictable. You might be at the peak of your health now, but an unforeseen medical emergency might render you unable to work indefinitely and then, where would you (and your family) be?
How to deal: Get medical insurance as soon as you are employed. Most jobs abroad come with health insurance, so check with your company if you’re entitled to a medical plan as their employee. While you’re at it, look around for life insurance too so that your loved ones back home are covered in case the unthinkable happens.
10. Neglecting your health.
You can try to convince yourself that you’ll buy back wellness when you’re already rolling in the dough, but good health is arguably your strongest asset in the race towards your dreams. For how can you earn when you can’t even get out of bed?
How to deal: Take care of yourself. Eat well, and on time, and rest when your body is tired. See a doctor if and when you get sick, and go for regular check-ups.
Whether you’re an OFW or not, the road to your dreams is bound to be a rocky one. Part of the journey means making the most of what you have and keeping a clear head when faced with obstacles along the way.