The OFW life is no shortcut to success. A common impression is that OFWs earn more and can send back generous remittances. But we tend to overlook the fact that OFWs have financial needs of their own. They endure the hardships of being separated from family to work hard, even to the point that they forget about providing for their own needs.
For most OFWs, finding a balance between supporting loved ones back home and saving for the future can be tricky. But all that sacrifice and hard-earned money should not go to waste. Here are some tips to help you better manage your finances and save while working abroad.
- Communicate with your family.
A lot of times, families of OFWs rely too much on their remittances. This stems from the mindset that OFWs earn a huge salary, and thus have extra cash to give away. In reality, this isn’t the case—in fact, local government agencies have launched financial literacy programs to help Filipino families better understand the sacrifices of OFWs abroad.
Letting your family know about your financial goals will help manage their expectations and encourage them to use your earnings wisely. Have a serious discussion and make them see the bigger picture: You need to save for emergencies and future goals like building a new home and funding children’s education.
With your family’s support and understanding, your overseas journey can be more meaningful.
- Invest in a unit-linked insurance plan.
The best way to turn your long-term goals into reality is by making your money work for you. Investing in a life insurance savings plan protects you and your family from unexpected events while building your wealth. And since you’re a Filipino working abroad, you would want to invest in an insurance company in the Philippines that you can trust.
BPI AIA’s bancassurance gives you all that and more with policies that strengthen your financial security. You’ll get expert advice on the best options for OFWs to maximize your savings and protection. One such example is the Life Ready Plus insurance plan.
This affordable insurance plan comes with an investment fund that allows you to hit two birds with one stone: build up savings and protect your family in case of an unfortunate incident. In the long run, you’ll achieve optimal benefits to help you match your long-term financial goals. You’ll have peace of mind knowing that your money is handled by experts you can trust.
- Pay and Avoid Debts
A financial mistake that OFWs tend to make is giving in to temptations—and credit cards are the most likely culprits. It’s okay to use credit cards but be moderate about it. Remember that the more you spend, the more you will have to pay on top of what you got in exchange for the credits you used.
As much as possible, use cash over credit to avoid incurring more debts. To focus more on saving money, work on paying off all your debts first, and do this as soon as possible. Start off with the ones that have the highest interest rates.
- Prioritize Needs Over Wants
It’s common for OFWs to scrimp on daily expenses while abroad, only to overspend when they go home to the Philippines for a vacation.
There’s no harm in rewarding yourself for your dedication and hard work. Spend for your vacation but know your limitations and live within your means. You don’t want to end up splurging on family dinners, short trips, and shopping sprees and be left with very little for your savings and expenses when you go back abroad.
A good way to practice discipline is to set aside an amount of money for your vacation. Make sure that you don’t exceed that amount. Stay away from vices—gambling, smoking, and drinking—that are detrimental to your goals, career, future, and life.
- Make a Budget and Stick With It
Take time to know where your money goes and create a system that allows you to manage and organize your income efficiently. Try to follow the 50/30/20 rule: 50% of your income should be spent on your family’s daily expenses, 30% is for leisure-related matters, and 20% goes to your savings.
List down all your expenses and figure out what a modest yet comfortable spending will be for you. You shouldn’t completely deprive yourself of basic comforts but cut down on unnecessary expenses. Practice discipline and invest in smart choices.
With these tips in mind, you can certainly build up your savings faster and retire sooner. All your sacrifices will take you to success if you are smart in managing your money. Prioritizing financial literacy goes a long way towards building a saving habit and securing a better future for yourself and your family.
Want to get a head start at achieving financial freedom? Maximize your opportunities by partnering with experts who will help you grow your fortunes and protect your assets. Talk to one of our Bancassurance Sales Executives at any BPI branch to learn more about the best ways to fulfill your financial goals.
