4 Effective Financial Tips for OFWs

To provide the needs and to secure the family's future. This is the most common reason why many Filipinos decide to work abroad. But as an Overseas Filipino Workers (OFW) working overseas is not just about securing our family's needs, it is also about protecting ourselves and preparing for our own future or retirement.

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For OFWs, saving money is not enough, we should invest and make our money works for us in the future. How can we do this? By hard work and discipline and of course by following this four effective financial tips especially made for OFWs.

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1. Money Management

Yes, your family back home needs the money, but it does not mean you will send all your salary to them. As the one who earns, it is important that you master how to segregate your earnings. Set a portion of your salary for your family, for your personal and basic needs like daily expenses, for your bills and the most important for your savings or emergency fund.

By doing this you need to master self-discipline when it comes to money. This is the number one key not just for your own personal protection as an OFW but also for your family's future.

Read: 5 Financial Tips for Families of OFWs

2. Choose Safe Channels When Sending Remittances Home

OFW send money back home almost every month. When sending your remittances, avoid these three things;

• Physical transfer through people or "padala"
• Sending money to your family through another person's bank account
• Sending money through the mail

There are many credible banking institutions nowadays that offer remittance services that you can fully trust. With this, you are not protecting your hard-earned money, but also yourself and your family back home.

Read: 7 Tips for OFWs to Save Money When Transferring Funds Overseas

3. Get a life insurance coverage

Have you ever wonder what will happen to your family in case of your disability or untimely death? This is the main reason why insurance exists. If you have financial protection, you are confident that your family is secured whatever happens to you while working abroad.

Read: Life Insurance For Only P150.00 Per Month

Read: OFW Medical Health Insurance Card For Only P1,600 A Year

Read: Free Insurance For The OFWs, Just By Saving And Sending Remittances

4. Save

This is a very common financial tip. To save for the future. But unfortunately, many OFWs end up without savings and still working in spite of old age because of the family back home that still depends on their earning. Do not ever think that working abroad with a big salary is forever! While earning big, save money for emergency funds. 

It is hard to be away from your family but it is harder if you cannot support yourself when you are old and no longer capable of working. Make sure to set aside even a small amount every month. Pay yourself first before paying for anything else.

SEE MORE:

Read: 10 Simple Tips for OFWs to Save Money From Monthly Salary

Read: Working Abroad? You Can Be A Happy and Healthy OFW With These 7 Tips

 Read: 7 Practical Tips for OFWs to Earn Extra Income

©2018 THOUGHTSKOTO

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5 Money Tips for OFWs + 5 Guidelines on Borrowing Money

As a Filipino that works abroad or OFW, how long would you like to work in other country and be away from your family? Do you have a goal to be able to come back in the Philippines for good, let us say, after 10 years of working?

Others may say, this is impossible because of too many spending to meet, especially with a family back home without a stable income.

But according to wealth expert Vice Rapisura, president of the Social Enterprise Development Partnership, Inc. it is possible for an OFW to set a goal to come back home.

He said the poor financial literacy, lack of a financial plan is often the cause why OFWs come home empty-handed despite the higher salary they get while working in other countries.

Sad to say, some OFWs are even poorer than before they left, he said.

Here are some tips from Vince:

1. Set a goal

OFW should make a goal to be able to come back within 10 years of working abroad.

He said it is possible with this process: 

• The first two years or the beginning state -This time, OFW should pay his debt first he incurred to be able to work abroad example the placement fee, plane tickets, etc. 
• The two-three years or the medium term - Here, OFW should focus on the basic needs of his or her family. 
• The three-five years of the long term -OFW should spend for their financial goals like being able to buy a house, open a business and many others.

2. Know where you are

Take the test to describe your financial practices. The rating scale will help you determine whether or not they are good practices.

You may take the test here.

3. Budget your money

OFW should follow the 5-15-20-60 budgeting rule

• 5% of the income going to insurance premium 
• 15% - savings 
• 20% - investments 
• 60% - expenses

(Watch: Budgeting Rule)

4. Clear your debts (The "utang" guidelines)

OFWs are not exempted to debts, in fact, there are many OFWs that sent into prison because of debts while working abroad. It is said that borrowing money is common among many Filipinos also with OFWs.

Vice suggest following this cardinal rules as guidelines on borrowing money

• Borrow money only when you plan to use it for productive purposes. This means using the money to finance something that creates income.
• Income from this project should be greater than the interest you will pay.
• Installment amount should not exceed 20% of your regular income.
• Do not borrow to finance wants. To be able to buy the things you want, save for it or create an investment portfolio that will provide you with a passive income.
• Lastly, borrow only from formal financial sources. This way, you can take advantage of lower interest rates and establish your credit history.

(How to get out of bad debt)

5. Invest

It is not true that investing requires a huge amount of money. This thing hinders many from investing.

According to Vince, you can start investing with small amounts by simply opening a savings account. As you get more money using your active income (salary, commission, etc), you gain the propensity to invest in other investment vehicles.

Just make sure you are investing in the right place. Study or do a research first before putting your money into an investment so that you won't be a victim of investment scams which OFWs are more prone.

MORE RELATED ARTICLES:

Read More: 7 Practical Tips for OFWs to Earn Extra Income

There are other ways to add income to a family by engaging in a small business.1. Online Selling - Online shopping is a trend nowadays. Fashion apparel, gadgets, processed foods remain the highest selling online item. It can be run 24/7 at home with low operating expenses. For the capital, you can borrow it from your OFW family member.2. The Carinderia or Food Business - Any business that deals with food are surely profitable for as long as there is proper management of the business. The food business will always be a popular business idea for Filipino OFWs.

Read more: http://www.jbsolis.com/2017/03/tips-for-ofws-to-earn-extra-income.html#ixzz4bFZWWyg7

READ ALSO: 9 tips to become debt-free!

Do you have piled up bills needed to be paid? Or are you able to manage your loans timely? Do you still consider yourself as a debt-free person? Well, one of the things that stresses us out or somehow gives us headaches is debt. Student loans, house loans, electrical bills are just some examples of debt that gradually consume your money in no time!In order to avoid that, discipline in spending money and prioritizing your needs are the keys. Hence, in a segment of Good Morning Kuya of UNTV, Ms. Riza Matibag-Muyot, a financial teacher, shared about tips on how we can be debt-free.

Read more: http://www.jbsolis.com/2016/09/9-tips-to-become-debt-free.html#ixzz4bFaaXOQl

Read Also: 7 Habits That Will Help You Save More And Live Providently

The thing we always say no matter how much income our household gets every month, "not enough". But why is that? There are some families who's monthly salary is less than what you are receiving and yet they manage to save and stay out of debt more than we do, or while they seem to have enough ours never seem to meet our needs. Here are some tips to save and be self-reliant.

1. Buy more of the fresh produce, a little at a time on the local farmer's market- We can always get fresher vegetables and fruits if we buy in the local market instead of supermarket, plus we can also haggle. Don't buy too much for what you need. Fresh produce are perishable and you don't want it to go to waste.

Read more: http://www.jbsolis.com/2015/04/7-habbits-that-will-help-you-save-more.html#ixzz4bFcYv9Ie

©2017 THOUGHTSKOTO

7 Practical Tips for OFWs to Earn Extra Income

In spite of working abroad, there are many Overseas Filipino Workers (OFWs) that still in debt.

Indebtedness is not new in OFW stories. From the start when OFW applies for a job abroad and sometimes until they retire working in other countries, some of them are still in debt.

They said it is because you need a "capital" if you pursue working in other countries.


This capital is a must so that you have something to use to process your documents and requirements, medical exam, big amount of placement fees and another related spending until you got hired.

To provide the needs of a family and for their better lives. This is the most common reason of Pinoy why he/she wants to work abroad. And because of this, even their small properties are put on risk when it uses as a collateral for a loan to have that abovementioned "capital".

Still, working in abroad is not an assurance that you will no longer engage in debts. There are many OFW stories where an OFWs puts into prison due to unpaid debts of obligations. This is why extra income for OFWs is a must.

Having or growing an extra income is not just OFWs sole responsibility even he or she is a breadwinner of the family. We must say, 50/50 - for OFW and his family.

There are other ways to add income to a family by engaging in a small business.

1. Online Selling - Online shopping is a trend nowadays. Fashion apparel, gadgets, processed foods remain the highest selling online item. It can be run 24/7 at home with low operating expenses. For the capital, you can borrow it from your OFW family member.

Things you need:

• A facebook will do. But a website is better.
• High Powered PC with internet connection.

2. The Carinderia or Food Business - Any business that deals with food are surely profitable for as long as there is proper management of the business. The food business will always be a popular business idea for Filipino OFWs.

(Image by blog.yuneoh.com)

There are a few ways an OFW can get into the food business:

• Start a carinderia.
• Start a bakeshop.
• Start a catering business.
• Start a food delivery business.
• Buy a food franchise.

3. The "sari-sari" store - This is a common business venture for OFW spouses in the Philippines. You can set it up starting with a small capital. This is a small business that can be run from home and considered to be a cash generating business for OFWs and its family.

(Image by Flickr)

To attract more costumers, you can add imported items from abroad such as clothes, toiletries, and canned goods. This will attract a more diversified market and potentially earn more income.

4. E-loading/Cellphone Retailer and Services - you can sell these from your home. The market for mobile phones will continue to be profitable until 2020 in the Philippines. That is why this is the best business ideas for OFWs.

You can offer services and products such as;

• Cell Phone loading services
• Selling pre-paid cards
• Cell Phone accessories
• Repair services
• Upgrading services
• Unlocking services
• Retail of new and old models
• Retail of brand new and second-hand models

5. Real estate - Another opportunity but may take more time. A property’s value may increase between 20 to 50% in a matter of five years, depending on the location. 

Since OFWs are earning 10x more in abroad, they can easily invest in condo units if financial management is good. Condo investing has been a trend for some time now. They can earn from having it rented.

6. Mutual funds - this type of investment takes away the trouble of having to constantly check on the progress or development of the investment through the help of a fund manager. 

7. Bonds - This type of investment is offered by large corporations and government offices as a means of raising funds by borrowing from the public. They have a fixed maturity date and offer different rates that depend on the length of investment. 

There are many opportunities for OFWs and its family to earn and grow extra income. But they said, investing in small or big business venture, it requires the same discipline: the will to start the business, to learn the ins and outs of the business, and to create strategies that will ensure profitability. 

In such ways, OFWs can avoid debts since the family has an extra income at home. Other than this, OFW can retire early and come home for good together with his or her family.

SEE MORE:

17 banks offers savings account for kids, teenagers

5 Financial Tips for Families of OFWs

Senate Approves 120 Days Maternity Leave

7 Reminders for OFWs who are Leaving Saudi ArabiaSSS pensioner will received P3,000 this March

©2017 THOUGHTSKOTO

5 Financial Tips for Families of OFWs

Regardless of how big or small the earning of an Overseas Filipino Workers (OFW), it is important that he/she knows how to save and learn to properly manage their hard-earned money.

According to Senator Cynthia A. Villar, this is for the good of OFWs and their family, in case an OFW will retire and stay home for good.

As an advocate of OFW welfare and protection, Villar said, OFW must be armed with right know-how on how they can grow and use their savings to ensure the good future of their families.

“They worked hard and sacrificed their time with their families so they will have a bright tomorrow. It will be disheartening, and more so frustrating if they do not use their savings wisely,” Villar said.

“Our workers need all the help and support when it comes to handling their savings. It is heartwarming to hear their success stories, and it is with pride that I align myself as among the many protectors and supporters of our OFWs,” she added.

On the separate report of Philippine Statistics Office (PSA) in 2014, it says that only two in every five overseas Filipino workers (OFWs) are able to save from their cash remittances.

“Regardless of the amount of the cash remittances sent, for every 10 OFWs, six [61.7 percent] were able to save less than 25 percent of the total amount received, two [21.6 percent] were able to save from 25 percent to 49 percent of it, and about two [16.7 percent] saved 50 percent or more,” PSA added.

On the other hand, OFW are not just the one who needs to save or to learn how to manage their hard-earned money. It is because the biggest part of OFWs salary goes to their family at home.

So while the OFWs are saving for themselves, it is also vital that the family of an OFWs knows how to manage the money they received.

In Inquirer article dated June 19, 2015, financial guru Dennis Sy, author of Rich for Life gives financial tips for families of OFWs.

Here are the five useful tips to consider if you are a family of OFW and the one who receives monthly remittances.

5 Financial Tips for Families of OFWs

1. Remember that the remittance is a privilege, not something you are entitled to

As a family, it is important that you understand that remittance is a product of someone else's hard work. You need to keep in your mind how much sacrifice made by your OFW son or daughter or relatives made in another country just to send money home.

As the one who receives the remittances, it is important to see ourselves as recipients of a privilege and not something owed to us, we put ourselves in the right mindset to make better choices, especially on our spending.

2. Put a name on every peso you receive

This is budgeting. The budget includes savings, investment, and monthly expenditures. People who receive money from OFWs tend to splurge because they didn't work hard for it. Discipline yourself on how to budget the finances given.

3. Make money work for you

Find ways to start a small business, since the money you received is from the hard work of our family members. It would be wise to make the money continue to work for you rather than just spending it outright.

4.Decide who really needs the money

Know the priorities. Gather your family and have a good talk. Discuss who gets the money and why. First priority should be the spouse and their own children. Second, the parents who are not able to work anymore. Outside of that circle, you should revisit why the money is allocated that way.

When money comes easily, especially through a monthly remittance, people tend to slack off and lose their drive to earn their own living.

5. Be financially literate

Continue to learn on how to be financially savvy. There are countless books on finance in the market by local authors who understand the context of the Philippines like Bo Sanchez on how to invest in the stock market as well as reading blogs online.

It is not easy to be an OFW, they need to endure homesickness, and different culture also embraces different kind people that are why as families, we have to help manage their finances well so that they will not grow old working in other countries but remain poor when they retire.

SEE MORE:

Senate Approves 120 Days Maternity Leave

Clinic with all Filipino Staff, opens at Abu Dhabi

7 Reminders for OFWs who are Leaving Saudi Arabia

SSS pensioner will received P3,000 this March

TESDA to give more than 400,000 scholarship this 2017

©2017 THOUGHTSKOTO