Aside from all these challenges, our OFs still have to pay off their debts and loans, send money back home for their family’s needs, and save some for themselves usually with what is left.
There are 3 common worries that affect OFWs like you, and here are practical tips to rise above them.
1. I am still paying off my loans and debts
Many OFWs fall into the debt trap thinking “Dollars naman ang kita ko, kayang-kaya ko bayaran ang utang ko agad.” In reality, this rarely happens because of lack of budget planning, losing track of payment schedules or soaring bills to pay. Another big factor is when unforeseen circumstances happen, such as sudden family needs, pay cuts or losing your job. With all the things you have to pay for and send money to, your debts are left hanging and accumulating interests.
That is why it is important for you and your families to set your personal financial goals; and this should include paying off loans and debts. You can create a list of your loans and debts and when you intend to finish paying it off. Include some unforeseen events and an action plan in case these happens. Assess your situation and your capacity to pay based on your contract, salary and your length of stay abroad.
Some questions you might want to consider are the following: How do you continue paying off your loans when you lose your job? Where do you get the money in case a family emergency occur? Involve your family and discuss these plans with key decision makers to prepare you and your loved ones to what might happen.
One solution is to get a life insurance product with same duration or longer than the loan, that can provide you enough funds to pay-off these debts. This will give security of your family in case something happens to you.
2. I am sick or there’s an emergency
Getting sick abroad or getting into an emergency situation like accidents and medical concerns can exhaust not only your health but your savings as well. Although most companies provide medical benefits, this is not enough to cover the expenses you have incurred. Being out of commission means no income, and no income means no remittance. Now you begin to worry not only about your health but about you’re the people who depends on you back home. And the stress continues.
Or what if a family member gets severely sick and needs medical attention? What if a family member dies back home? How do you address these unforeseen events?
The solution is simple. Aside from living a healthy lifestyle and taking good care of yourself, make sure that you are also prepared for emergencies by setting up a portion of your hard-earned money every month. You may follow the 50/30/20 rule where 50% of your income goes to your family, 30% to your personal needs, and 20% to your savings. Encourage your family members to do the same by setting aside a fraction from the remittances you send. It is also wise to bundle it up with an insurance protection that can lessen the impact of unforeseen events. Having this cushion will save you from a lot of anxiety and expenses so you can better take care of your loved ones’ needs back home.
3. I don’t have enough savings
Many OFWs do not prioritize having a personal savings because most of their earnings are spent paying off debts or are sent back home for their family’s needs. This challenge often results to staying longer abroad or taking another contract when the present one expires. It can delay your plans of coming #HomeForGood and be with the people you love again. But being an OFW should not be forever.
One solution is to start saving early. Setting aside a portion of your income in your monthly budget for saving will go a long way. This strategy will also enable you to fund additional investments whether in dollars or in pesos for your peace of mind.
As you continue to embark on your journey abroad, you need a partner that you can depend on, a partner to lean on in times of uncertainties and difficulties. Having a strong familial relationship is key to your worry-free OF experience. Proper financial planning with your family back home is crucial as well, and Sun Life can help with that. You do not need to do this alone. Our financial advisors are ready to answer your call. For more information, please check out Shine Pinoy Program for Overseas Filipinos.