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Health and Financial Wellness

Common Money Habits OFWs Should Avoid

Financial advisor talking to a couple

The road to coming home with financial freedom starts with the right attitude.

A balikbayan box is a symbol of love. These giant care packages from overseas Filipino workers (OFWs) typically contain gifts and random items for people back home—from children’s clothing to boxes of soap, from the latest pair of basketball shoes to cans of processed meat, and many more.

A balikbayan box is a symbol of sacrifice, too. All too often, sending a balikbayan box filled to the brim means working extra hours or using a credit card to afford everyone’s bilins.

Truth be told, the balikbayan box is just the tip of the iceberg. The story of an OFW toiling away in some obscure part of the world to pay for a sibling’s education or to fund a relative’s new business venture is all too familiar. While most OFWs generally earn substantial income, it doesn’t necessarily mean that they are not struggling financially1 - and it’s not surprising why.

Typically, families left behind think that those who are earning in a different currency have an endless supply of money. Whenever more funds are needed back home for “emergencies” or even for parties and celebrations, the one working abroad always comes to mind.

In the end, many OFWs struggle to manage their finances. While there are indeed successful ones who are able to purchase a home or start a business after working abroad for years, many OFWs still come home with no savings, or worse, burdened with debt.

A hero but not a martyr

Most OFWs working abroad will probably say that nothing is sweeter than coming home for good. But how can an OFW even think about coming home when he or she is living paycheck to paycheck?

The road to financial freedom starts with the right attitude—not only for the one abroad but also for the family members left behind. Both the OFW and the family back home should be committed to making healthy financial decisions that are fair and reasonable for everyone involved.

For OFWs, there is nothing wrong with wanting to help out but it is also important to learn how to say no when family members are starting to be too dependent. Be transparent about the cost of living abroad and the reality of making ends meet.

On the other hand, those at the receiving end should have realistic expectations about what kind of help they can receive from a relative working abroad.

Overall, OFWs and the relatives at home will greatly benefit by resisting the temptation of materialism that ultimately leads to a waste of funds. Instead, the OFW might consider building a savings and emergency fund that can help build the foundation of better financial health. Likewise, relatives in the Philippines might want to look into business and investment ideas that can eventually help lead to financial independence.

Money management for OFWs

Having a basic understanding of financial concepts can greatly help OFWs protect and grow their money. The right knowledge can empower them to make informed decisions on how to save more and even choose the right investment instruments while working abroad. Financial literacy can also help them avoid fraudulent schemes that promise high returns in a short amount of time.

It’s particularly important for OFWs to set a quantifiable financial goal while working overseas to help them focus and avoid overstaying.

An important part of that financial goal is having enough savings to be prepared for a comfortable homecoming. Money in the bank helps erase worries about short-term and medium-term financial needs. Saving money includes building a separate emergency fund for unexpected family expenses such as hospitalization or asset damage.

Additionally, OFWs can also consider life insurance products that can help them protect their finances when unexpected life realities strike. This is essential for those who will remain breadwinners even when they are no longer abroad.

OFWs who are looking to retire in the Philippines should also look at options that can help them build their retirement fund and provide additional money when critical illness strikes.

Investing is particularly important for OFWs who no longer want to work as employees when they return to the Philippines. A financial product they can consider is investment-linked life insurance which can help them meet long-term financial goals while having financial protection. OFWs might also want to consider starting a business or investing in properties for lease. The important thing is to look for ways to grow money instead of spending it all on consumer goods.

Strike a balance

Oftentimes, OFWs send balikbayan boxes and remit so much money as an expression of love to the people left back home. This kind of generosity is not uncommon in modern Filipino households. But preparing for a stable financial future is a better expression of love. Planning for long-term financial goals tells them that you care enough to think of the future.

This doesn’t mean that OFWs should never send goods back home anymore. What’s important is to strike a balance between spending and saving/investing to lead a financially successful future.

Talk to a financial consultant to help you manage your priorities and expenses.



Commission on Filipinos Overseas. 1 out of 10 OFWs financially broke: study - Macel Ingles.