5 Things That Drain an OFW’s Wallet
A larger income is touted as one of the benefits of working abroad. Most people who do work abroad fall to the perception that they’re living the high life abroad – if one were to take every post they make on social media seriously.
The fact is that working abroad is as much a struggle as it is working in the Philippines. If anything, an OFW is subjected to a different working culture and a different social culture. This in turn could affect the way they spend their money.
In the 2nd Quarter Consumer Expectations Survey for 2016 by the Banko Sentral ng Pilipinas, it’s been noted that 97.1 percent of households with OFW members use the remittances that they receive to purchase food and other household needs. Through that, only 38.6 percent allot an amount for savings.
There are things that drain an OFW’s wallet apart from the cost of living abroad and remittances. It could be said that anyone working also experiences this, though.
Most OFWs do save, in spite of the low percentage presented in the survey. The thing is that OFWs may choose to shelve saving in favor of other expenditures they find worthy, such as the purchase of a house, medical expenses, or education.
It’s ideal to set aside an amount as savings as soon as you receive your paycheck, and if you can automate your savings, that would make saving so much easier.
Living the high life
This is one of the quickest ways that an OFW might sap their funding. Having access to the latest and highest-quality items can often increase expenses. The sudden jump and increase in income changes a lot of things, and can lead to unrestrained spending.
It isn’t to say that an OFW cannot reward themselves with their hard-earned cash, but there needs to be a limit. When working abroad, instant gratification can lead to having little to no savings when an OFW eventually returns to the Philippines.
Should an OFW return, they also bear with them unprecedented buying power, given the exchange rate. It becomes an issue of wanting to keep up an appearance of extreme success – the arrival of an OFW immediately becomes an event.
While it’s great that they might want to take family and friends out to dinner, going out to every single spot – with all the drinks and food on the OFW – increases the odds that they overextend their funding, and end up going home more broke and stressed than when they came home to take a break from the stress of working abroad.
No concrete goals
Most OFWs buy homes for the simple fact that they have the buying power to do so. Often, the plan is to work abroad and eventually return to the country. Some eventually decide to settle in the country they’ve worked in for so long.
Having a goal focuses the way you save, and lets you prioritize which goals come first and foremost when it comes down to it.
Failing to educate family about money
An OFW typically leaves to provide a better life for their family; this is usually supposed to mean the nuclear family unless other arrangements are discussed. It’s the discussion that’s often left out before a member of the family leaves to work abroad.
Coming to a concrete arrangement with your family about how much money you are going to send home. If it comes to it, offer to set up a small business that will help augment the family’s income while you are away, instead of allowing them to rely fully on you.
A drained wallet can lead to an OFW drowning in debt, something that’s not ideal, regardless of where you are working. Having concrete goals, a work/life balance, and keeping track of your expenses can greatly help prevent financial strain and keep your financial house in order, no matter how long you plan on working abroad.
Kyle Kam is a Digital Marketing Specialist of MoneyMax.ph, a financial comparison website aiming to help Filipinos save money through diligent comparisons of financial products.