5 Money Mistakes OFWs Should Avoid

There are over two million Filipinos working in different parts of the word, and the number keeps getting higher by the day. These Overseas Filipino Workers (OFWs) often leave the country in search of “greener pastures” as well as to support their families.

By the time their contract ends, some Pinoys are able to save and invest enough money for retirement. In contrast, some OFWs find that their situation has barely changed; they have very little or savings at all. How did this happen? More importantly, how can it be avoided?

Many OFWs commit mistakes with their hard-earned money.

5 Common Money Mistakes and How to Solve Them

Here are five of the most common money mistakes that OFWs make, along with their solutions:

#1 – Spending more than you can afford
This is perhaps the most common mistake that OFWs make. They feel obligated to send remittances month after month, without close monitoring of where the money truly goes. As the “highest earner” (or in most cases the breadwinner) in their families, they have no qualms about sending remittances. In the process, however, they fail to set aside money for themselves.

How can you avoid this trap? By making a budget and sticking to it, for one thing. Make it clear to your family that you are sending a specific amount per month, and no more. You can also ask your parent or spouse to set aside a portion of the remittance regularly into an emergency fund. Moreover, you can help them set up a small business to earn additional household income.

Don’t forget to save a portion of your earnings regularly.

#2 – Spending too much on yourself
This is another common money mistake. Because they are earning more, newly-hired OFWs also tend to spend more. They are suddenly able to buy things that they couldn’t afford with their previous salary. While there is no harm in treating yourself every now and then, you might be tempted to focus on acquiring “small luxuries” on top of your basic needs.

Here’s a tip on what to do with a higher salary: Instead of spending more, why not save more? This way, you are able to live within your means, while setting aside money that can be used for more important things or better investments.

It’s okay to treat yourself to a small luxury once in a while, but not too much.

#3 – Spending to impress others
Many OFWs get into the habit of bringing “pasalubong” (treats) every time they go home as well as shouldering expenses for lavish feasts or parties. After all, they would rather spend too much than be called “kuripot” (miser) by their families and friends. The fact that most Filipinos seem to think that OFWs are “rich” only perpetuates these habits

While there is nothing wrong with giving treats to your loved ones, spending all your savings on one “gimmick” after another is wasteful. You wouldn’t want to be broke after your vacation, right? Besides, your family and friends will understand if you’re not extravagant with money.

Many Filipinos seem to think that OFWs are automatically “rich.”

#4 – Not having insurance
Insurance seems like an additional expense to most Filipinos, including OFWs. However, you can never be too sure about the future. This becomes particularly important when you’re abroad and on your own. In case something happens, life insurance or medical coverage is a big help during unforeseen events. Consider setting aside a part of your income for insurance.

#5 – Not preparing for retirement
Most Pinoys shrug off saving for retirement, thinking that they still have plenty of time. However, remember that you will not be able to work forever. As early as now, you should be preparing for retirement, no matter how far off that may be. Check out retirement plans with your employer or your country of employment. See how these can help you save for the future.

OFWs should start saving for retirement as early as they can.

Regardless of how much money you make, always see to it that you do not commit these mistakes. In order to avoid making poor choices with your money, read about financial literacy and management. By doing so, you can be assured of a better future for you and your family.