OFW Money Traps: How I learned from It

For starters, OFW means Overseas Filipino Workers. They or WE are the living heroes of our country (Philippines) as we send money to our family back home which results to a good economy. 

In the Philippines, when people talk about OFWs abroad they think that those people are living their dreams and are enjoying a good life. BUT sadly that's not the case, most of us were blinded by that idea that's why some of our loved ones are suffering abroad but unable to go back home due to lack of financial literacy and discipline. 

In this topic, I will share you what I learned financially speaking in my 4 years as an OFW. 

First, Let me tell you my story... 

I had 3 years of working experience in my home country as a nurse which pays me around 4500php a month (roughly 321aed). I live with my family and I am the eldest of 4 siblings. My mom is working as a government hospital nurse which pays her well but my father doesn't have any fixed income. During my college years, my grandparents were the one who financed my tuition fees and they helped me until I was able to work abroad (Thank you so much Lola Mila and Lolo Rito. I love you both). I remember having a side income of tutoring my cousin during my early college days and selling prepaid mobile network load during the later years. I used to make sure that I always have enough left until my parents would give me my allowance for the following week as I might not know if they will give me on time because I still have my younger siblings for them to take care of. 

Flashback in my early days as a kid, my parents used to buy us some customized piggybanks that we will only be able to open once. My grandmother also taught me and my cousins the idea of delayed gratification at an early age. She would buy us one piggybank each and we would  all put coins in it until the end of the year and we would all go out and spend it during my grandfather's birthday (Dec 24).

My grandma used to have this big red piggybank and she would have loads of coins at the end of the year and share it with us. 

At the age of 24, I was able to work as a nurse in Dubai. My income from the Philippines was multiplied by more than 10 times. Come to think of it, I already have a saver's mindset but because of lack of financial literacy, I was unable to save anything 4 years down the road. Because it is Dubai, I didn't become a crazy spender, I was just not able to plan and put my money wisely. 

So these were my learnings along the way.. 

*Pay God first and yourself second

I know many will disagree with me, but as a Christian I have learned from the Bible that you should give to God first before any other bills that you need to pay for. It only means that you honour Him and you are giving back all the blessings that He had given to you. 

After that, pay yourself. Paying yourself doesn't mean that you have to buy a new mobile phone or get the latest gadget. In that way, you are not paying yourself but you're actually paying the mobile phone company. It means, keeping it and making it grow through investment. 

*Learn to make a budget

I know some people who doesn't want to hear this word. I think they have this thought that they don't want to deprive themselves of happiness but in reality, money is already controlling or enslaving them.

During my early OFW days, I was able to send money to my family and pay the bills but I was so blind in terms of finances because I dont have a written budget to track my expenses. So, I wasn't able to save any. 

When you have a written budget, you will be able to allocate all the needed expenses plus you have saved for yourself. I believe that it's not because of low income or high cost of living that's why we cannot save. It's just because of the wrong mindset and unwillingness to strive for a good future. 

*Never ever use a Credit Card

Have you ever heard somebody telling you not to ever start having a credit card? Well, they are 100% correct. It seems that OFWs have easy access to shopping through this way but take note that credit cards will give you happiness now but you will have a hard time in paying it plus the interest later on. 

According to the Bible: the borrower is slave to the lender. 

If you already have one and have a big amount of balance, I suggest to try your best to pay it off as fast as you can as compared to just paying the minimum because you are only basically paying off the interest and it will take you a long time to finish it off. 

I only used my credit card when I had an emergency in the Philippines few years ago. My wake up call was when I realized that I had already maxed out. I tried my best to live in a very small allowance and was able to pay off the balance within the end of the year. I called the bank and cancelled my credit card. The following year, I tried to live within my salary and pay everything by cash. By then, I was able to breath and feel free. 

*Make an Emergency fund

Think about this, if you have extra money in your account you will never ever have to use a credit card in case of emergency. Some financial advisors suggest that you should save around 3-6 months worth of expenses. 

At the moment, we still don't have an emergency fund but I am praying that we will be able to achieve our goal by this year. 

*There are good and bad debts

I noticed that other nationalities tend to take some loan but they use it for buying a land or building a house in their home country or starting a business. Now, that is called a good debt. It is when the money that you borrowed will give a return after some time. 

Filipinos tend to make consumer debts like taking up loans for personal consumption like: 

-to have enough budget for the annual leave

I know how it feels when you go home and all your friends and relatives will expect you to invite them to eat out. They don't have any idea that your leave is just your long rest from a year's hard work and you already used most of your money to help the family throughout the year. 

-to have enough budget to fill up the 'balikbayan box' 

Now, this is a very long tradition were OFWs were expected to send big boxes full of gifts for the family and even the distant relatives. I did this once when I still have the common OFW mindset but when I was already in the road to financial independence, I was able to stand up and just not think about the embarassment in not being able to give anything when going home to Philippines. FYI, most Filipinos tend to use credit cards or loans just to fill up these boxes so I am blessed to have an understanding family that doesn't push me to follow the same tradition. 

-to be able to pay off the existing credit card bill but ended up with another plan (now credit card bill has an additional loan payment) 

Well, there are times when you are already tired of the high interest rates of the credit card that you took up a loan and then ended up using it in some other thing and now you have two payments instead of only one. 

*Don't keep up with the Joneses

Dubbaaaiii.. Well, its a fast growing tourist destination and you will easily see how many luxurious items are at hands reach. As long as you have a good paying job, bank agents will flock at you and offer you loans and credit cards. You can easily have a car and just have a car loan. Get the latest mobile and pay it off monthly. 

Easy right? Now, add all those monthly payments and you might not have anything left so you will end up borrowing some more. Especially if you like eating out and trying all the amusement parks available here. Now, there's nothing wrong with that as long as you're paying it by cash, its part of your budget and you're not compromising the other plans in your life. 

*Giving is hard if you don't have anything to give

Tough times..... It is when you want to go to a friend's place for a celebration or you want to give something to a friend who needs money but you yourself doesn't have anything to give until the next paycheck (if you have anything left after the bills are paid in that month). 

Looking back in my younger years, I used to give gifts even if those were just chips or candies or small things for my family. Now that I have some responsibilities on my shoulder and bills to pay, I can't even afford to go to the supermarket unless its the monthly grocery for stocking up food. And the only cash I have for the month is what I use for giving to the offering bag at church every Friday. I know, it's a lot of sacrifice but we are aiming for a fast pay out plan. 

*Don't wait for tomorrow, start now

I know how stressful it is to live paycheck to paycheck. Especially if there are emergencies along the way. But I thank God that He gave us the wisdom and courage to step up with our financial problem and now we are on the road to financial independence. 

You don't have to wait for a promotion or to have a high paying job. All you need to do is pray, ask for His guidance and have a lot of patience in enduring all the sacrifice that you need to make. Remember, He is always at our side. We should just LIVE WITHIN OUR MEANS. 

#debt #finance #savings #creditcard #ofw #balikbayan #loan