If there’s one thing every OFW must not lose sight of, it has to be their goal. Without a goal, working abroad can be extremely challenging, even loathsome to a point for others. But this doesn’t have to be the case. Taking into perspective the opportunities as well as the benefits of being an OFW, you will realize that you are much more blessed than you think – knowing that you are in the position to provide rather than receive and that your family is well taken care of, especially during these challenging times is a blessing in itself.
Also Read: 7 Benefits as a Member of SSS
That said, being an OFW is an opportunity and a blessing. But to be able to effectively live your life as best as you can even when apart from your family and loved ones, you need to be able to stick to your goals. This includes your personal, professional, and financial goals. In this guide, we will share some essential concepts for OFWs to effectively save up towards their financial goals even while working abroad.
OFW Money Matters: 7 Concepts to Reach Financial Freedom Through Saving Up
Before we get right into our list, let us first look at what saving up means and how it is properly done. You might not think it, but the idea of building wealth is quite simple: spend less than you make and do it for a long time. To help you make a strong follow-through with this concept, here are some helpful pointers you can apply in your daily life:
As mentioned, every OFW must set a goal for themselves, their families, as well as their finances. By having a goal, you can determine a lot of things. One of these is your target earnings. Another is the amount of time you are willing to work overseas. And finally, the amount of money you would like to have in ‘X’ amount of time, factoring your actual earnings and the amount of time you are willing to put into working to reach this goal.
Develop a System.
There are several ways on how you can save up effectively. However, one of the most recommended and tried and tested methods is the 50-20-30 rule. This is a moderate way of allocating your resources to ensure that you are able to use your money effectively, and not expend it without much thought. The rule goes like this:
50% is allocated to your essentials (food, housing, utilities, and transportation)
20% goes to your finances or savings account(s); and
30% is for your personal or lifestyle expenses. Because you also need to treat yourself every once in a while.
Note: These figures can vary depending on the goals you set as well as your target savings in a specific amount of time. The idea here is to limit the money you spend and make sure that a portion of your earnings will go directly to where it’s supposed to be. That way, you can ensure that none of it will be improperly spent or miss the chance to consistently grow your savings.
Invest, Invest, Invest.
Do we need to say more? As OFWs, remember that you are earning more than 70% of what most people back home do. Take that as an opportunity and a challenge to use your money wisely. And when there’s an opportunity, use your hard-earned money to invest in a house, a business, and several properties. Of course, if you’re not very familiar with the kinds of businesses or investments to make, you can always consult with banks or even the Overseas Workers Welfare Administration (OWWA) for ideas and ventures you can put your money into. If you make the right investments, you will see that your money can yield even bigger returns!
Multiply Your Savings.
One of the great things to do with your money nowadays is that you can easily multiply this amount by putting it in the bank or other forms of savings projects such as the Pag-IBIG Fund MP2 Savings. By putting a portion of your savings in the bank or in funds like the Pag-IBIG, it will continuously grow and flourish in time. Just make sure to allocate the funds you are willing to set aside, considering the guide explained in point #2, and then let time do its job. You’ll be amazed at how much your savings can grow, say in 5 to 10 years, without doing anything. How convenient is that?
Limit Your Spending on Unnecessary Things.
The secret to enjoying life is moderation. This also applies to your finances. That said, it’s important to moderate your spending because as you know, the money you earn or save in the bank is not unlimited. For this reason, the goal should be to make your flow of revenue continuous for as long as possible. And to make this happen, you need to have several streams of income. Increasing your income can most definitely make saving up much easier and faster as you can put in more funds into your savings account.
To achieve this effectively, make sure to dig in deep into point #s 3 and 4, as there are lots of ways on how you can diversify your savings and increase your streams of income nowadays. Just be careful not to fall for scams as there are also a lot out there! And they especially prey on OFWs… The main thing to remember here is that when the offer is too good to be true, then it probably is. Be careful as this is a clear sign of a scam!
Be Careful Not to Fall into Credit Card Debts.
Once you start working abroad, you’ll notice that almost everyone is using credit cards for their purchases. It’s very convenient in a way, but there’s also some danger in using credits for the money you don’t have with you yet. And if you’re new to using credit cards, make sure to do tip #5 – to be able to moderate your spending and not fall into the trap of accumulating debts from your credit card transactions. Credit card companies earn from the interests of the purchases you make using your card. This means that the more you spend, the more you will have to pay on top of what you got in exchange for the credits and convenience you used.
Here’s a gentle reminder, while the use of credit cards is not bad, make sure to only use cash when paying. This will ensure that if you do not have the means or the funds to pay for your purchases, you won’t have to get anything that you cannot afford to buy right then and there.
Practice Moderation in Sharing Your Blessings.
Many OFWs have this mentality that they can sacrifice anything for as long as it’s for family. While this, in itself, is not a bad thing, it can end up quite disadvantageous for the OFW himself and for his family. The general thought here is that you need to be able to save some for yourself or simply do not go overspending, as emphasized in points 4 and 5.
But if you decide to treat your family and friends, make sure to stick to a budget. Think about it: even if you only come home to visit once a year, do you think it’s worth it to spend 6 months’ worth of your savings just to treat your friends and family one time? Of course, it’s good that you can share with them your blessings, but not to the point that you’d burn a hole in your wallet, as this will only leave you feeling abused, taken advantage of, or worse, being needed for what others can gain from you. That said, the ideal option is for you to be cautious when using your money. In doing so, make sure to communicate your situation with your loved ones as well, especially when you yourself are experiencing some hardships from work or your life abroad.
These are just a few of the important concepts every OFW must learn in order for them to effectively manage and grow their savings. Remember, saving up is not a one-time thing you do when you just feel like it. There’s no assurance of what the future will bring, take the global crisis for an example. Nobody knew that this was going to happen and last for as long as did and still counting. Had you not made the decision to save up when things are relatively “easier” and “normal”, imagine how difficult life can be for yourself and even for your family back home. That said, all is not too late. And there’s always a second chance to do the right thing. If you can, will you start saving up today? Let us know what you think and if you have other tips you can share with our fellow OFWs, do leave them in the comment section below!