Budgeting 101: How to Live Financially Well as OFWs and Still Send Money Home


Budget. Source: https://www.flickr.com/photos/76657755@N04/

Most OFWs are working hard to earn money, so they party just as hard with the money left after they sent some back home. The ending? No savings to tide them over during the employment gap or to ensure their retirement. This is a common problem among OFWs, and is caused by several factors.

One of these is a misconception about life abroad. Your family back home probably thinks you’re well off overseas and having the time of your life, which is why they won’t think twice about asking for financial support. You might want to correct this kind of misconception. This may be hard to do and you might be perceived as selfish, but thinking about your financial future should be a priority.

To achieve financial stability, however, you must have a budget. There are plenty of tips and tricks that you can use, which is actually good news. With plenty of options, you do not need to limit the strategy you use.

The Percentage Guide

This tip may come in many forms: 70/20/10, 50/20/10 or 60/20/10/10, but they all share the same goal — to properly allocate your income. Ideally, you should set aside money for your savings account, your expenses (which include your remittance back home) and your tithes. Others also break down their budget among expenses, investment and for flexible spending. Whatever percentage rule you use, always remember to stick with it, no matter what happens.

The Envelope System

This follows the same principle as the percentage guide, except that you use envelopes to allocate money. You can assign one envelope for your expenses, support fund, emergency fund, retirement and tithe, a share you give to the community, such as to the church, charity and the like.

Develop a budget plan

According to financial experts, budgets must be renewed every month, since no two months are exactly the same. There could be a birthday one time and none the next. Since this can be time-consuming and daunting, create a budget plan that is applicable for the most part of the year.

  • Calculate your net income. Make sure to list all income sources you have, including those that give you sporadic earnings. It is common knowledge that OFWs find ways to make money on the side, so make sure to include those incomes, too.
  • Calculate all your expenses. Some OFWs are lucky enough to enjoy free lodging, meals and transportation, which mean they only have fewer expenses. If your case is just the opposite, all the more reason to list down all your expenses and then find out whether or not they exceed your income. If they do, you seriously need to start implementing your budget strategy.

Choose a strategy based on your calculations

Are you spending more and earning less? You might want to find ways to clear your debts, and start a new slate. Make adjustments to your budget in such a way that you can repay without starving yourself and your family to death. If you still have money left, you can decide which percentage you should allocate on your savings or retirement fund, but make sure you don’t go below 10%.

There are times when you might have to skip sending money back home so you can pay off your debts or start an investment plan. It’s a worrisome thought, but you have to remember that if you are the breadwinner now, you would probably still be when your contract overseas is over. What happens then if you didn’t have a penny saved up?



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