Money mistakes of OFWs
(OFW-Overseas Filipino Worker)
The painful truth is that many OFWs remain poor despite working abroad for so many years. Ask typical long-time OFWs about their savings, and if they answer you honestly—they don’t have much, or none at all. So, what went wrong?
Here are the top five money mistakes of OFWs.
- Instant upgrading of material things. Once they fly out of the country, many OFWs and their families immediately switch to more expensive stuff. They buy more expensive phones: iPhones instead of Androids that are just as functional. They buy pricier clothes, shoes, bags and cosmetics. They replace old appliances and furniture that they could have kept for a few more years had no one flown overseas. Money spent on expensive things could have been used to build up savings and investments. However, OFWs choose to spend it on things that depreciate overtime. If you can still use something, there is no need to replace it. You don’t only save money, but you also reduce negative environmental impact.
- Excessive “pasalubong” or gifts. As a way to compensate for their absence, OFWs buy a lot of “pasalubongs” or gifts. They give something to almost everyone, not just to the immediate family members but even to the remotest relatives. And don’t forget the neighbors, kumpares and kumares, inaanaks, and so on. The list is endless. What “pasalubongs” do they give? Chocolates, canned goods, shoes, perfume, bags, t-shirts, wine, and all other stuff. That’s a lot of money spent on “pakikisama”. Stop it. Give only to a few who matter most in your life. Learn to ignore “parinigs” and criticisms.
- Travelling and buying material things at the same time. You want to reward yourself, and you deserve it. But if you have no emergency savings yet, or you still have outstanding loans, you should not be shopping and travelling at the same time. In fact, even doing just one of them may still not be wise. But if you need it for your mental health, choose just one. And save for it first.
- Having only one income earner in the family. In many cases, the entire family depends on the income of the solitary OFW. From the family budget to the housing loan amortization— everything is provided by the OFW. This is so wrong—and risky. Other adult family members should be able to contribute financially, no matter how small. The wife can bake goodies. The husband can render repair services. Teenage children can sell something or do tutoring. Ideally, money for food and bills should be earned by family members in the Philippines. And the OFW’s income should be for long-term goals such as college fund, house and lot acquisition, and business capital. And God forbid, what if the breadwinner-OFW suddenly dies or gets incapacitated? What will their families do?
- Delaying savings and paying of loans. “I’ll save next pay day.” “I’ll do it next month.” (I’ll upgrade my phone first. Or, I will travel first. Or, these shoes are on sale. Ito muna.) And next month becomes next year. Next year becomes next contract. Next becomes never. So, what is the end game? Someone in your family gets sick, you borrow money. Your collegiate son or daughter needs money for thesis, you borrow money. You fail to pay your housing loan, and your house gets foreclosed by the bank. You fail to pay your car loan, the bank pulls your car. You suddenly lose your job, and you go home with nothing. In short, you’re still poor. Don’t postpone setting aside money for savings and investment. Don’t delay paying interest-bearing loans. Once you postpone one or twice, it becomes habitual. Once you skip one or two monthly loan payments, it becomes harder and harder to get out of debt.
Kabayan, being an OFW is a great opportunity that you should not waste. You have already sacrificed so much. Be wise with your money so you don’t go back to a life of poverty and debt.