Monday, May 20, 2024

4 Reasons Why Many OFWs Fail to Save Money

More OFW Updates

Contrary to many expectations that once a Filipino goes abroad and gets paid a salary higher than back home, many overseas Filipino workers go home and fail to save hard-earned money.

Why is it so?

In ideal situations, a Filipino spends a considerable amount of money on relocation expenses or paying agency fees during his first few months at work. After a few months, he begins to save money for the future. But in many cases, it’s far from ideal.

Unfair working contracts, exorbitant fees, or even illegal recruitment sometimes hound our OFWs abroad. They struggle at work, are unable to find sufficient rest time and enough food, and lack protection when getting sick. So when his contract expires, he may not have enough savings even to pay for airfare. Worse, he may be in deep debt as loan sharks take advantage of his vulnerability.

High placement fees

Going abroad is sometimes like a gamble, where an OFW has to bet through expensive agency fees, deal with multiple levels of bureaucracy, and sometimes unpredictable health conditions. Once the OFW gets the clearance to work, she starts to think about how much she can save monthly after considering debt payments and initial expenses.

- Advertisement -

However, once she arrives at the workplace, she realizes it is more expensive to live there and she, therefore, has to adjust her budget that her meager income is barely able to support. Other significant expenses include monthly long-distance calls and money remittances.

She could easily think that while she couldn’t save in the first few months because of necessary payments, she may not realize that until the last day of her contract, she barely saved at all.

As Filipino workers pay up loans used for placement fees, they fail to save for a while. This habit soon continues once they realize they’ve sacrificed so much and start to compensate by gifting themselves with material things.

Many Filipinos abroad fail to save money.
Many Filipinos abroad fail to save money.

Spending above financial means

One problem of some OFWs is the lack of fiscal discipline. Thinking that they have higher salaries abroad makes them think they can buy anything they want. Expensive phone, check. Unnecessary laptop, check. Designer bags, check. Ridiculously priced jewelry, check. It is NOT a bad idea to buy them, but only if they can afford them or have set aside an amount — no matter how small — for savings. These expenses are not investments that they can make money of.

- Advertisement -

The mobile phone breaks down and needs to be repaired. Laptop gets infected with spyware and rendered irreparable. Owners end up spending more to maintain these devices. Hence, the OFW once again fail to save due to these circumstances.

Overspending by beneficiaries

Sometimes family members of OFWs think that their brother or sister or son or aunt receives lots of money while working abroad that they spend remittance money like there’s no tomorrow. In the end, they end up asking for more to finance their necessities. As expected, the OFWs fail to save because of overspending habits that could have been controlled.

Sometimes it is thought that remittance will be an automated monthly bank transfer that when it does not arrive at the usual date, family members borrow money from loan sharks, assuming that the money sent to them from overseas will be used to pay the debts.

Infidelity and extra responsibility

When an OFW gets involved in an extramarital affair to address his or her homesickness, he or she is also adding more to the list of people to support. Additional responsibilities often entail additional expenses. If the forbidden love bears a love child, money will also be spent on caring for the baby. Not to mention the trouble and scandal to expect when the OFW returns to a legitimate family someday.

OFWs must be able to set ground rules for themselves and follow them religiously. This includes practices on saving money. If one can save a certain amount consistently in a month (ideally set aside this amount right after receiving salary) to a bank account, SSS, or other retirement contribution, this will definitely be helpful especially when times got rough.

Other reasons OFW fails to save money

OFWs and their families practice several money mistakes. Without proper planning on reaching goals at a realistic pace, reckless spending ensues once payday arrives.

Some OFWs have set unrealistic expectations and invest in things or businesses that can be considered impractical from their income standpoint. They try to make extra money but find them difficult to pursue.

The Philippine government is doing its part to encourage OFWs to save for retirement, but it can only do so much. Filipino workers have the last say on how to use their income.

At the end of their OFW careers, they realize how long they’ve spent abroad without saving up. They used to think they can save up because their salaries are higher abroad. But they found out later that it’s not about getting that high salary.

It’s more about saving as much as possible every time they receive their salary. Sadly, on many occasions, many OFWs find out too late and regret their past mistakes.

- Advertisement -
Email Newsletter
- Advertisement -
- Advertisement -

Latest Updates

Pinoy Royal Caribbean Cruise Staff Allegedly Installed Hidden Cameras in Bathrooms, Suspected of Spying on Guests

A Royal Caribbean cruise staffer is suspected of concealing cameras in passenger cabin restrooms to spy on visitors, especially...
- Advertisement -

More Articles Like This

- Advertisement -
error: Content is protected !!