Handling Finances as an OFW

Posted by under Guest Posts, Personal Finance . Published: March 19, 2018

One common impression about Filipinos working abroad is they earn more compared to what they could earn in the Philippines. However, how many of them do you think are able to spend responsibly? Most often, only a few.

We’ve heard all those sad stories, whether on the news or even from a close friend or relatives that after living and working abroad for years – they are buried in debt and in a bad financial situation.

Living in the rat race is still the lives they live after all their sacrifices.

How can you avoid such financial mistakes and start making better decision with your money? I’m going to share with you the things I’ve done personally as someone who’s experienced being an OFW.

Having a Goal

The very first step in making sure that every money that you’ve worked hard is properly managed is to have goals. These will be your guide in making financial decisions once you move in a new country.

Your goals don’t have to be too perfect and detailed right away, as you will still have the time to refine them as you move forward. But at the very least you must already have some in your mind, and just revisit them afterward.

In my case, two months before leaving the Philippines I have already set some goals that I want to achieve. By doing this, it gave me a perspective on where I am headed to in my personal and financial life.

Working on your career is important but the same is true with your aspirations in life.

Share Your Goals with Your Family

After setting your goals it is important to share these with your family, especially those goals that would benefit them. Goals can be like building a house, or sending a sibling to college.

This will help them see the bigger picture why you have to work abroad. And avoid the misconception that you’ll be away just to earn money.

Talk about these goals with them before leaving the country as it provides them time to think. And it is much easier to have this conversation face-to-face as you can get real-time feedback on what they think about it.

Communicate Your Monthly Support

This part will be easier if you have done the previous one, especially for breadwinners.

Letting your family know about your goals of working abroad, will give them better understanding why you must set limit with the money that you have to send to them.

There are lot of stories that family members ask for more than what they supposedly need or sometimes relying too much for financial support.

By communicating to them the support that you can only provide you are managing their expectation beforehand. This way it avoids any conflict plus eliminating the possible burden of them expecting extra money from you.

Save for an Emergency Fund

Having an Emergency Fund is very important to avoid any financial difficulty that you might face when unforeseen expenses arise.

This is more important if you’re an OFW as most likely you are on your own. Searching for money is the last thing you would want to do if you are faced with an emergency.

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Track your expenses each day and get the monthly sum of it, multiply that by six months. And that’s your target emergency fund you need to save.

It’s important to note that as you start your life abroad there are one-time expenses that needs to be spent, like house furniture, kitchen wares, etc.; those shouldn’t be part of your emergency funds.

Automate Your Savings

If you are not used to the habit of saving, then you’ll need to fight a lot of inertia just to save. This is where most people fail, particularly OFWs, as it is more emotionally rewarding to spend than it is to save.

Thus, automating your savings is a sure way to protect your income from going nowhere.

Start with the automatic savings available in your company. For US-based employees most companies match certain dollar amount you saved if you contribute to your retirement plan, aka 401K. Before you even receive your income, a portion of it is already deducted towards your savings.

You can even go beyond this by setting an auto deduct on your own towards your other savings account, that you can use for your immediate goals like traveling or buying gadgets.

Avoid Having Debts

Saving for an Emergency Fund will prevent you from accumulating any debts. However, living abroad also exposes you to different temptations that may result in you accumulating debts.

With every End-of-Season or Black Friday Sale, you will be tempted to spend money you do not have if you do not have such control over your spending, especially if you have credit cards.

Plan your shopping lists ahead of time before heading out to the mall and see to it that you will follow whatever is on that list. Also, stick to the shops where you intended to buy to prevent you from seeing items that will tempt you to overspend.

Moreover, one sure way to avoid having debts is to pay with cash as you immediately feel the pain of letting go of your hard-earned money.

Look for Frugal Ways to Spend Free Time

One of the things that I appreciate living abroad is the absence of traffic going from and to work. That means you are left with so much idle and free time. And if you are not careful with that you might explore things that will cost you a buck, especially in the US where online shopping is so convenient and fast.

I encourage you to explore a hobby that will cost a little or even free. Visit a park and enjoy the nature, go to a library, or even explore a passion you love now that you have the time.

Have Friends Who Will Encourage You

There will be times that pursuing the goals that you have set will not be appealing especially when times are challenging, or things become routine. I feel this when homesickness strikes me.

That’s when having friends who can remind you of the goals you’ve set to accomplished becomes important. It’s not all the time you feel pumped up and excited to face each day, so it is very helpful to have someone accountable in case you’re out of your path.

Final Thoughts

Living away from home is a tough and challenging journey, especially when you know no one in the place where you will be.

Having a set of tools on how to cope up with these challenges will help you sail your way through the storm of life. Hope these lists will help you.

This article is written by Philip Dayrit. He is a Systems Analyst based in US, and an advocate of Financial Literacy at IMG Wealth Academy.




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One Response to “Handling Finances as an OFW”


  1. Rose says:

    This is very helfpul!

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