We are a Community. Our mission is to encourage every Filipino to learn how to Save, Invest their money and plan for their Retirement.

Jul 13, 2013

OFWs Money Mistakes (Part One)

The BSP’s second quarter Consumer Expectations Survey for 2011 showed that the number of OFW households that set aside money for savings has grown to 44 percent – a very substantial increase from the 7.2 percent in 2007.  

However, since there are an estimated 8.7 to 11 million overseas Filipinos, we are still looking at millions of OFWs who don’t save at all.  This is very unfortunate because most OFWs have the capacity to accumulate adequate savings which can help them secure their families’ financial future.  

It’s really sad that many OFWs are still unable to significantly raise their families’ standard of living even after years of working abroad.   

I believe one of the main reasons why a lot of OFW families continue to suffer from financial distress is improper money management.   Although in some cases an OFW’s financial troubles may have been due to circumstances beyond his control (e.g. foreign employers not paying them, victimized by illegal recruiters, displacement due to “Saudization” of jobs, etc.), I’m convinced that most money problems confronting OFWs are due to financial missteps they’ve committed time and again.

Here are some common money-mistakes that OFWs (and millions of other Pinoys in the country) make and what they can do about it.  

1. Reckless spending.  My kumpare who worked in the Middle East for several years had this to say about OFWs and their money: “karamihan sa OFW nagugulat sa perang nahahawakan nila kumpara sa kinikita sa Pinas.”   The sudden and enormous jump in income also brings a feeling of empowerment.  

The OFW now feels he has the power to purchase the things that he and his family have wanted for so long.  And so he begins to buy stuff that bring instant gratification like furniture, appliances, computers and electronic gadgets.   

The family begins to engage in more leisure activities like eating out and going on vacation because they can now afford it.   There is nothing wrong with this as long as you keep it under control. 

Unrestrained spending, especially on things that you don’t really need, can lead to financial ruin.   Do not spend as if money will not stop flowing.  

Overseas work is supposed to be temporary.  Sooner or later OFWs will return home and the big income they’ve been accustomed to will stop coming in.  

What happens then if you’ve spent most your money on unnecessary things?  Just because you’re earning big doesn’t mean you have to become a big spender and start living a luxurious lifestyle.  

Exercise discipline in spending your money.  Do not let your expenses catch up with your income, otherwise the money you've worked so hard for will go nowhere.  

Even if you can afford it, do not spend too much on items you can live without because these will not help you secure your future. 


Read Part Two: OFWs Money Mistakes

Alvin T. Tabañag is a personal money management coach and registered financial planner.  He is a member of the US-based Registered Financial Planners Institute, the Financial Planning Association (USA) and the Association of Registered Financial Planners of the Philippines.  

He is also a member of the Professional Speakers Association of the Philippines.  He is the founder of Pinoy Smart Savers Learning Center, an internationally-recognized organization and “Best Provider” of employee financial education in the Philippines.  Mr. Tabañag’s center is at the forefront of a campaign to promote a culture of saving and responsible money management among Filipinos.   

Open A Binance Account Now!

Sunlife Life Armor - AVAIL NOW!

Mostly Read Today

© 2012. Powered by Blogger.