10 Money Tips for OFWs

Recently updated on: October 14, 2023

Our Overseas Filipino Workers, or OFWs, have been one of the biggest exports of the Philippines for a long time, particularly construction workers, domestic helpers, medical workers, and seafarers.

That is also why they are often referred to as "Bagong Bayani" or modern-day heroes because of their contribution to the economy through remittances.

Generally, OFWs earn higher salaries than their Philippine-based counterparts, allowing them to lead better lives for themselves and their families.

However, we can't help but hear the sad stories of OFWs, who, after working for decades, have nothing saved to sustain them in their older days.

The Philippines' primary export is OFWs. So, in this post, let's discuss some money tips for OFWs and OFWs-to-be on how they can manage their finances.

Ofw Waiting On The Airport
Photo By Kelly On Pexels.com

1. Know Your Why. Plan Long Term.

One of the common missteps of Filipinos working overseas is they don't have a long-term plan regarding their lives as OFWs. They just usually go with the flow.

When this happens, our kababayans abroad can easily be swayed by the new and foreign lifestyle leading to lifestyle inflation.

It is important to know why you become an OFW in the first place. Ask yourself, why did you want to work abroad? Do you intend to return to the Philippines, or are you determined to be a citizen there?

Then if you intend to return to the country, what will you do then? Will you open a business, invest in various financial instruments, or become a landlord?

These questions will help you stay on track with your goals, whether for yourself or your family. Make sure that it's a SMART goal.

2. Communicate Your Plans To Your Family.

A common reason why Filipinos decide to work abroad and become OFWs is to help their family have a better life. This is even more pronounced if they're married and have kids.

While helping your family is a noble goal and a great opportunity for many, the sad truth is that they often become ATMs with the sole purpose of providing.

So, it's crucial to communicate your plans with your family. Set expectations and boundaries early on. Decide how much you'll send home as remittances, how long you'll be gone, and other plans for the future.

If you plan to work abroad long term, you may also talk about bringing your family.

3. Set a Deadline

If you become an OFW with a plan of returning home soon, it is crucial that you put a deadline into it, especially if you have families and growing children.

Because if you don't place a specific deadline on your return, you may not notice how fast time flies. You will then realize that you are already twenty years older and your children are already adults.

When deciding on your deadline, you must include your finances as your primary consideration. How much do you need to save to live comfortably back home, and what will you do once you're back in the Philippines?

4. Don't Think in Pesos.

A common habit for Filipinos going abroad for work is they often think in terms of pesos when negotiating or accepting their salaries.

For instance, if you work in a country that pays P100,000 per month (after conversion), will you accept it or not? Because for those earning around P50,000 monthly in the Philippines, that amount is already twice their income.

However, what if the cost-of-living expenses in your prospective country are around P80,000, while your cost-of-living expenses in the Philippines are around P30,000? If that's the case, then it is just a breakeven.

So, it is important to research the cost-of-living expenses in your prospective country so you'll know how much you need to ask so your sacrifices abroad will be justified.

5. Have a Budget and Stick To It.

Budgeting is another important skill you need to master as an OFW, especially if you suddenly start earning a lucrative salary.

A budget will help you decide where your money will go every pay period, so you'll never have to ask yourself where your money went, and you can easily visualize your finances. A budget spreadsheet or app can help you with your budget.

Some budget categories to consider are family/responsibility funds, vacation funds, retirement funds, business savings, and many more. So if you plan to go home sooner, increase your savings rate.

6. Buy Assets, Not Liabilities

A common observation I have with OFWs is many of them buy liabilities over assets. Many would build large houses they seldom live in or cars they rarely drive.

From what I learned, some of them buy houses or cars that they'll only enjoy for a few weeks a year because they want to feel they have established something tangible in the Philippines that will be proof of their sacrifices or status symbols.

On the other hand, some are smart with their money and buy assets, like real estate properties, that will deliver a passive income or save up capital for a future business.

The good thing about being an OFW today is that we now have the Internet. They can now buy various investment products, like stocks and bonds, MP2, UITF and mutual funds, crypto, and other financial products.

7. Save Up For a Going-Home or Vacation Fund

For OFWs who are privileged with long vacation days, going home to the Philippines to visit their family and friends is something they look forward to.

However, often, they spend months of savings on a two-week vacation. Then once they return abroad, they will repeat the cycle of working and saving for another round of vacation expenses.

So, having a separate vacation fund in your budget categories is important so that your savings will be intact for your eventual permanent return to the Philippines.

8. Avoid Gambling and Other Vices.

Gambling and various vices are some of the worst and most dangerous money-wasting habits because these are highly addictive.

I heard sad stories about OFWs who fell into the debt trap due to their gambling addiction, leading to unfortunate consequences in their personal and professional lives.

So, if you're an OFW, avoid the temptation and peer pressure to gamble. It would be easier to feel FOMO than experience the negative impacts vices can do.

9. Avoid Luxurious Living

There is a saying that it's not how much you earn but how much you save.

For instance, if you're earning P200,000 per month but spending P190,000, you are just as wealthy as an employee earning P30,000 but saving P10,000.

However, if you're earning P200,000 per month but spending P220,000, you're slowly digging your hole because of debt.

At the end of the day, it will be your habits and discipline that will help you manage your income while living abroad. Learn more about the kurot principle of spending so you'll be more in control.

Remember that time is your greatest ally or worst enemy. You wouldn't want to retire without savings because you lived a lavish lifestyle abroad.

10. Be Careful With Lending

If you're working abroad, there is an automatic notion that you are rich. Whether true or not, family, friends and even acquaintances will approach you for a personal loan.

When this happens, you need to have some considerations before lending because, more often than not, you may never see the money you lent ever again.

It is important to be wise when lending money, even if you're earning a high salary, because that will only be for a while. Eventually, you will get older and will have to retire.

It is sometimes better to be called a kuripot than to lose your hard-earned money from "professional borrowers" who have no desire to pay you in the first place.

Final Thought

Working abroad as an OFW is difficult because you'll sacrifice your time with your family in hopes of a better future for them. So, it is essential that you carefully plan your journey.

It would be best if you also were smart with money. Save as much as possible and start investing in assets, not liabilities.

Next, you must take care of your health because your sacrifices will not be worth it if you spend your savings on hospital bills.

Finally, always pray to God that He will be with you wherever you go and always lead you on the right path.

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