“You work abroad? You must be rich!”
Such is the misconception about many overseas Filipino workers (OFW’s) and their families. Given how their remittances amount to billions of dollars every year and how a good percentage of them tend to splurge on doodads like widescreen TV’s, cars, and the latest smartphone, perhaps it’s no longer that surprising why a lot of people think so.
And yet, despite how many migrants make twice or thrice as much as their local counterparts (we have the exchange rates to thank, I suspect), many of our OFW’s still come home with little to show for their decades of toiling away abroad. Some of them even continue to be mired in debt long after their lucrative employment contracts end. With remittances hitting new record highs every year, it makes one wonder where all that money goes.
This is precisely why financial literacy is important for our migrant workers. No matter how much you might earn per month, it’ll all be for nothing if you don’t know how to manage your money properly. The following concepts might prove especially beneficial for OFW’s the world over:
1. Having Specific Financial Goals.
Ideally, an OFW’s goal should not be to keep working abroad, but to save up and invest enough so they can come back home and still be able to afford to live well.
It’s not enough to say you simply want your family to have a better life. You have to put that abstract thought into tangible figures.
For starters, how much would your dream house cost? PHP3 million? PHP5 million? On average, how much are your family’s monthly living expenses? PHP50,000? More? Now, add up all of that to arrive at how much you need to save up, and work on a plan and a timeline for that.
It sounds tedious, but without at least an estimated figure for your target net worth, your efforts to make money abroad will lack direction and any real sense of purpose.
2. Carefully Monitoring and Controlling How Remittances Are Being Spent Back Home.
Over-remitting has got to be the bane of an OFW’s life, and our non-confrontational culture makes it hard for us to say “no” to our relatives (and sometimes even to those who aren’t). The guilt that comes with being an absentee spouse or parent can also interfere with one’s efforts to discipline their partner’s and/or child’s spending habits.
However, none of these are good reasons for not sticking to an agreed-upon budget. You went abroad to provide your family with necessities and a few comforts, not to enable them to spend money like water.
If you’re having difficulties tracking how your family spends your remittances, consider signing up for online banking accounts, which will allow you to check if the money you sent has already been received and most importantly, what it’s being spent on.
You can then set aside time each month to review the account’s transactions and then to discuss if there are any adjustments that need to be made.
3. Setting Up an Emergency Fund.
Just one emergency can wipe out your family’s meager savings account back home and then some. If there is no fund set up for such a scenario, you’ll be forced to borrow money from family and friends, or worse, from lenders who might charge you usurious rates.
Bear in mind that to be truly financially stable, your emergency fund should be kept separate from your savings and investments. You wouldn’t want all that you’ve worked for to go up in smoke in one fell swoop now, would you?
The process of becoming a bona fide migrant worker is hard enough. There’s a maze of visa applications to muddle through, various documents to prepare, jobs to apply for, and housing to arrange, among many other things.
Being able to stay and work in Australia can also be quite challenging. The list of skilled occupations continues to dwindle year after year, and lots of OFW’s cope with homesickness to boot.
This might all sound discouraging, but it shouldn’t. If you’ve managed to get past all of the aforementioned setbacks and are earning fairly good money Down Under, that should be an even greater incentive for you to cultivate the right financial habits. You’ve already made it this far, you might as well see it through, kabayan.