There are 2.4 Million Filipinos working overseas across the globe. Most, if not all, remit huge sums of money regularly to support their families in the Philippines.
Even with their well-paying jobs, it seems that many overseas workers still need to learn the financial skill of saving money so that they can have a good life now and during retirement.
How much money do overseas workers really earn? Records show that for the month of April 2017 alone, the total remittances amounted to a staggering US$2.083 Billion. The sheer amount of remittances by overseas workers makes them literal heroes of the country. Through hard work and sacrifice, they are able to collectively remit billions of dollars that help keep the country’s economy afloat.
Despite their ability to work and earn large amounts of money, many of overseas workers are still financially challenged. It is not uncommon to hear of a retired overseas worker who has very little or nothing left even after 20 years or more abroad. Worse, some of them fall into serious debt even after earning good money from their overseas work. Their financial challenges eventually impact themselves and their families, and ultimately, the country’s economic situation.
Financial success, as one expert once said, is not about how much you earn… it is about how much you keep and how much you grow what you’ve earned. Sadly, not a few overseas workers have learned this truth the hard way. Some have accumulated tons of debt, others have lost their hard-earned cash because of frivolous spending, while others have remitted their money to the family which, in turn, wasted ever single cent.
Clearly, every overseas worker needs to be smart with money. Being smart with money starts with following these simple but indispensable tips to financial success:
Stick to a Budget. Sticking to a budget is a must not only for the overseas worker but for the rest of the family that receives and uses the cash remittance. Living abroad, the loneliness caused by separation from one’s family may cause an overseas worker to turn to palliatives to soothe the suffering. For many, this palliative is mindless shopping for one’s self and for the loved ones back home. While each and every shopping trip may be an act of love for one’s family, the package of presents later on become a gaping hole where money is lost. Having no control over one’s shopping habits also makes an overseas worker fall into the trap of excessive materialism, which also drains the purse. In short, knowing the difference between needs and wants must be the first order of the day. Strictly following a budget is definitely something what every overseas worker needs to do.
Pay-Off Debts. Having unpaid debt is like storing water in a bucket full of holes. It is wise to set aside money every payday to pay for debts. One cannot effectively save money if there is still debt that is not paid for in full. Specifically for credit card debt, it is best to pay off the credit card debt with the bank that has the highest interest rate. It is also advisable to research on debt consolidation so that you only pay one interest rate on a single debt instead of paying of several banks.
Avoid Debt. Logically, one needs to avoid incurring more debt. As mentioned above, one needs to stick to a strict budget to avoid spending more than what one has earned. For credit cards, some people have done the extreme of actually cutting off all their ‘plastic’. Some realistically just keep one credit card but only use for real, pressing financial needs such as a medical emergency and never for shopping, eating out, or going on vacations.
Invest. Once every single debt has been paid, an overseas worker can focus on growing his or her hard-earned money. There are many investment tools available that offer higher returns than the interest rates from the bank. Placing money on mutual funds and other paper investments are good options for those who have time to study these types of financial tools and platforms. For the traditional investor, buying real estate such as condominium unit or apartment that can be rented out is a good source of passive income.
Get Financially Educated. Getting rid of debt, managing one’s budget, and investing to grow money take financial education. Learning about how banks work, the different types of investments, or perhaps running one’s own business takes knowledge and discipline. Reading books, going to seminars, or even hiring a financial adviser are wise steps to take in order to improve one’s ability to build wealth over time. A simple but good example is knowing which is more efficient, sending money remittances via traditional banks or through established remittance companies like Cebuana Lhuillier. Comparing the transaction charges would clearly give an idea which one is more overseas worker-friendly.
By following these simple tips, an overseas worker regardless of profession or salary scale, can indeed stretch the money to meet present needs and better still, send more to the family so that could invest and prepare for the future.