Top 5 Financial Goals for OFWs


With Php 1.20 trillion in OFW remittances sent last year, it’s puzzling why 1 out of 10 Overseas Filipino Workers (OFWs) remains financially broke. This is according to a 2011 study done by Social Enterprise Development Partnerships Inc. In addition, 80% of OFWs return to the Philippines with no savings. Despite them earning much more than their local peers, they are not immune to money matters and financial insecurity.


From sending a bulk of remittances to relatives to investing in idle assets such as houses, OFWs experience financial challenges specific to them. Before it’s too late and they return home with insufficient savings or investments, OFWs should maximize their time abroad. Here are five financial goals for OFWs:





Zero debt

Early last year, the Department of Foreign Affairs released an advisory warning OFWs in the United Arab Emirates (UAE) of unpaid loans and credit card balances. There have been instances where OFWs were detained in their country of employment due to defaulting and non-payment on loans.


What to do: While you’re in your prime years of earning, set aside a percentage of your salary for debt payment. Take it a step further and allot windfalls such as bonuses to debt payments to kill your debt faster. Also, interest on loans and credit cards may be higher than the returns on investments, so pay off the bulk of your debt before you invest.



Retirement fund

During retirement, you finally have control of your own time. There’s no need for you to join the 9-to-5 grind; however, with so much free time, you may fall into the trap of spending more. It’s difficult to enjoy your golden years if your retirement fund is insufficient.


If you want to pressure yourself into saving money, why not set a deadline for being an OFW? Being an OFW shouldn’t be the be-all and end-all of your career if you’re away from your family. With a deadline to come back home, you’re pushing yourself to make the most of the work abroad opportunity and saving money at a faster rate since you know you won’t be working abroad forever.


What to do: When it comes to growing your money, time is your best friend. Start growing your retirement fund the moment you start working. There are numerous online calculators you can use to compute how much you will need come retirement to live the lifestyle you want. Once you know your retirement number, set a portion of your salary for your retirement fund.



Diversified investments

According to the BSP Consumer Finance Survey, 70% of Filipinos own real property while less than 1% owns stocks, bonds, and other paper assets. Don’t put all your eggs in one basket: diversify your investments to both increase and protect your net worth. Investing in safer investments such as bonds and time deposits will protect you in the event of a real estate bubble burst. While investments such as stocks will grow your money and give you higher returns compared to low-yield investments such as time deposits and bonds. Diversification minimizes your risk by growing your net worth at the same time.


What to do: Open an investment account through your local bank or with brokerage firms. Banks offer a diversified selection of UITFs and time deposits. Insurance providers offer mutual funds. Stock brokerage firms let you trade stocks and participate in the stock market.



Multiple income streams

Why bother looking for more than one income stream if you are earning more than five times your salary back in the Philippines? That was the mentality of Emily when she used to work in Hong Kong. She could spend roughly Php 2,000 on a single dinner just for herself, and she wouldn’t think twice about it. Worse, investing never crossed her mind. She didn’t know there were such vehicles as UITFs and mutual funds. When she got back to the Philippines, she was inspired by her friends who had multiple income streams. Some started their own business and took freelance gigs during the weekends while others went into trading stocks.


What to do: Investing is one of the best ways to earn money since it is a form of passive income where you let your money work for you. Aside from investing in stocks and real estate, you can look for freelance opportunities where you can showcase your skills and earn at the same time. Use your network and online freelancing platforms to earn extra cash on the side.



Family members who don’t depend on remittances

As an OFW working in Singapore, Ben feels sandwiched by his parents and younger siblings. As the highest-earner in the family, he contributes the most in supporting his parents compared to his siblings who work in the Philippines. In addition to that, he also covers some of the expenses of his siblings. He has a younger sister who already has a family of her own, but since Ben earns the most, he pays for their monthly rent and the household help’s salary. He feels sandwiched because both his parents and siblings depend on him for monetary support.


What to do: Support your family by fostering their personal and professional growth. One of the best ways for this is through education. Putting your children through school is one of the best investments parents can make since they’re setting their children up for a brighter future. Aside from education, opening an investment account is another way parents can support family members. Instead of spending remittances on material items such as the newest tablet or phone, spend on investments. Instead of buying Apple products, why not buy Apple stock? You can also help them by encouraging them to start a business so they can have their own source of income.



Walang forever

A time will come when you’ll have to stop working. If you plan right, you can live the retirement you’ve always dreamed of, whether it’s jet setting around the world or reading a book in the convenience of your home. Either way, expenses won’t stop when you stop working, so it’s best to live your retirement years with a well-padded retirement fund. Make the most out of your high-earning years, so you can come back to the Philippines with savings and the freedom to enjoy the fruits of your labor.

*This article first appeared on MoneyMax.ph.