Working as an OFW in Dubai means having a high paying job. It also means living in a world-class city with a high standard of living and lots of things to spend money for. If you’re not careful, you might end up mismanaging your funds.
Indeed, it is important to know how to use your resources wisely. One way to do that is to identify your needs and your wants, which, in turn, will help you know what to prioritize in your list of expenses. This article explores, in more detail, the difference between your needs and your wants.
Disclaimer: The information posted here is based on the personal experiences shared by the OFWs in the video below. Please let this post serve as a guide only. If you have specific questions, you may ask the OFWs by commenting on their videos on their accounts.
How to Start a Priority List for Your Earnings as an OFW
The information in this article is shared to us by an OFW in Dubai through the YouTube channel Kakane. It talks about the clear difference between your needs and wants, and provides advice regarding how to manage your earnings as an OFW.
Typical Financial Mistake of OFWs
Kakane shared his financial mistakes during his first year as an OFW in Dubai.
Basically, he made some serious realizations after noticing that he has no savings in the bank after a year of working. Here are some of his mistakes:
- Extra money going to gadgets, expensive clothes and other luxuries.
- Having a wish list of things he wants to buy.
- Combining wants and needs in one list.
- Not knowing his financial priorities.
Needs vs. Wants
Kakane defines the two words as follows:
- Needs – the most basic things we need; what we should do first in order to survive.
- Wants – things that we think would be nice to have; extra expenses.
Three Levels of Needs
Kakane went further and categorized needs into three levels. You have to be sure you cover all needs in Level 1 before you can even think about spending for Level 2, and Level 3.
- Level 1 – these are the most basic needs. These include water, electricity, internet, food, accommodation, paying loans.
- Level 2 – If you still have extra money after level 1 (which you definitely should have), you can proceed to having an insurance, starting an emergency fund, and setting aside money for savings.
- Level 3 – If you’ve reached this far, then you should consider investments; investments are important to have a good life, which you will have if they start earning.
Some Examples of Wants
In the video, Kakane mentions the following specific examples of wants:
- Upgrading your smart phone even if your old one is still functional.
- Changing your smart phone every year because you want to keep up with the latest iPhone.
- Buying high-end gadgets that you don’t really need.
- Buying expensive cars.
Is it wrong to buy wants? Well, not really.
It’s okay to buy your wants, as long as you prioritize your needs.
Additionally: before you buy a want, you should plan and save for it before purchasing it.
Learn to Prioritize
As an OFW, or worker abroad, the NEEDS should be prioritized.
Because if we don’t do so, we will have a hard time living abroad.
You may have lots of extra money every month, but for how long? There is no assurance that your job will last.
Many OFWs lasted for only 1 to 2 years, without savings. By working hard and saving, you have a chance to make your investments even bigger.
These tips are very important if you want to have a wonderful career in Dubai. By following these tips, you get faster into getting to the point where you really don’t have to work abroad, and just go home to the Philippines to manage your businesses. Then you can use the money you get from your investments to buy your wants.