Simple Financial Tips for OFWs

Just simple financial tips for those fellows who are working overseas for the first time.

1. After paying off your debts at home (I'm sure you do), save as much as you can.

2. Aside from your compulsory savings by your employers (if you have this scheme), save at least 5% or less from your salary. If you are sending money at home, save some amount for yourself- set a target. Having a target will make you oblige to do such.

3. Try not to be a compulsive buyer. Only buy the things you needed and can bring home. A "little" luxury is alright if done minimally. Have you counted how many pairs of shoes you have, how many winter clothes (you can't bring them home, for Pete's sake), how many pairs of Levi's jeans? You might be putting up a boutique with your collections.

4. This works for me: every time you buy, convert that amount in Pesos, and that will have a kind of psychological effect (I am buying this thing for this amount?! Geez!).

5. Talk to your family at home to be economically responsible. Tell them the truth that burning your ass abroad is no easy task. Let them help you spend your money wisely. You are not just plucking dollars from a tree. You work for it!

6. If you have enough savings, do a little marketing study. Invest your money so it will grow. Don't just put it in your piggy bank.

7. If you don't want to take the risk of having a business, buy something that will last - land, properties. Don't buy a "bahay kubo".

8. Ask your family to start a business of its own so they won't be dependent on you. On top of the money you are sending, they are earning, as well.

9. Be practical. If you are sending packages at home every month or every other month, then stop! Don't you realize that you are paying double or triple for that Barbie doll or box of chocolates (unit price + currency valuation+freight cost+effort)? Tell your family not to envy your neighbours who are receiving packages every month from their "financier" abroad. You'll have your packages in due time as well.

10. LIVE NOT FOR TODAY, LIVE FOR TOMORROW.

How to Get Financial Assistance from OWWA

This is a monetary assistance granted to landbased or seabased OFWs who suffered illnesses/injuries which are neither contract related nor sustained during overseas employment and were contracted on or after 01 May 1982. These are cases that do not fall under the regular disabilities assistance program.

OWWA's medical consultants will assess the OFW’s disability using the Schedule of Impediment Grade provided for under the program's implementing guidelines. The amount will range from Php 1,000.00 to 1,500.00

Requirements for Financial Assistance Application

Accomplished application forms Original copy of medical case history certificate issued by attending physician ( local and abroad ). Passport / Seaman's Service Record Book OFW / Seaman's Information Sheet, Certificate Of Coverage (COC) and Overseas Employment Certificate (OEC) processed and approved by POEA Duly notarized Letter of Authority (LOA) duly signed by both the applicant and the authorized representative with recent 2" x 2" picture of the authorized representative with signature on the bottom side of the picture and proof of relationship (In the event that the OFW/Seaman-claimant is physically and/or mentally unable to personally claim the disability assistance.)

Guide To Success Part 2

1. Apply the job without spending a fortune. It is not practical to spend a fortune to land an overseas job, no matter how high-paying it promises. Many Filipinos take the radical route of selling farming lands, houses and other family properties to pay for placement fee for a job that pays only a fraction of that amount. While you successfully get the job, your family’s livelihood or convenience is compromised, putting you in a bind to contribute a significant amount of your earnings on a regular basis. This becomes the main reason why OFWs are unable to save for themselves.

2. Save before you spend. The fact that you are receiving much higher salary abroad than what you did back in the Philippines is a big temptation to spend more. After all, you have the money to spend, right? You might say you deserve a new car or a fine piece of luxury jewelry after all the hard work. That’s not a problem only if you already managed to save a reasonable amount on a regular basis. That amount may be from 5% to 15% of your monthly income. Many Filipinos want a taste of luxury even for a short while, only to regret what they did. You can be like them, but make sure you put money into the piggy bank first.

3. Become a property investor. Investing in farmland, house for rent or lots is a wise investment with guaranteed yields better than passenger jeepneys or sari sari store because they require a bit less maintenance and whose value doesn’t depreciate as much as others.

4. Invest in retirement savings plan, educational plan or life insurance. Even when you’re working abroad, be diligent in contributions to SSS, Pag-Ibig Fund and educational fund for children or future children as well as health and life insurance to safeguard financial security during challenging times.

5. Educate your family members on spending your remittance. Don’t make your beneficiaries think making money abroad is an easy task. Instill in them the value of saving and less reliance on your money remittance (or balikbayan boxes). By doing so, family members are motivated to help stretch the budget and save whatever you send instead of immediately seeking help from you for financial assistance.

6. Don’t pretend to be a millionaire when you’re not. Sometimes, neighbors have this mentality that if you are on vacation, you are poised to give away stashes of money or bags of chocolates. And many OFWs oblige to avoid being maligned as too prudent and don’t know how to share. Sharing what you have is a good gesture but it does not need to be too extravagant that it’s like starting from scratch when you return to work abroad. What about if your company suddenly shut down or have to let go of people (you included) due to financial difficulties? Or you got sick and unable to go back to work?

7. Think of a good investment while you’re abroad. If you are business-minded you can think of ways to establish business in your home town. Internet cafe for computer-literate family members, eatery for cooking mothers and siblings or a business center offering photocopying, typing, and book binding near a school. Don’t invest on a business you have no idea how it’s run. You better save your money in a bank than get involved in a highly risky business venture.

8. Think of acquiring new skills. Acquiring new skill can be accomplished through short-term courses such as dressmaking or cooking courses. Or maybe enroll in a distance learning institute. Other skills are not necessarily for livelihood but are good to have, such as guitar or karate lessons. Being an OFW should not limit you to be part of working class only.

9. Set short-term, middle-term and long-term plans. By planning on a short- (within the year), medium- (2-4 years) and long-term (5 years or more) plans, we are more focused on what we can accomplish on a daily basis. Do I want to own a new house within two years? Do I want to go back home in five years? Can I establish my own business before I reach the age of 40? Draft your own plans first and you’ll be able to steer towards a clearer direction.

Guide To Success Part 1

There are many Overseas Filipino Workers who work abroad for many years but are not successful and no investments were acquired by the time that they have already retired.
The worst situation is that there are some OFWs who have been in an accident overseas which prevented them from working again. Regardless of working in or outside the Philippines, Filipino worker should know how to value his labor and sacrifices while aiming for his dreams.
The following tips are worth reading that will serve as guides for typical Overseas Filipino Workers. Information given is based on my own experiences and from the experiences of other fellow Overseas Filipino Workers.

1. Do not spend too much of your income. Not because you are earning big now and you have extra money, you are going to spend too much for your vices and unnecessary things. Some Filipinos who are only on a temporary working visa are buying luxury and brand new cars which I think is not necessary. If your earnings are high, it should be okay but I know some Overseas Filipino Workers who buy expensive and brand new cars but do not have any investment on important properties yet. They could not even eat proper meals anymore as luxury is more important to them. They are not thinking that their job abroad is just temporary, anytime they can be sent back home if some unpleasant situation happened such as war, bankruptcy, slow economy or as I have mentioned above, when they become paralyzed and couldn’t work anymore after an accident.

2. Always keep some income for savings. Save some of your income in Philippine banks as well as banks in the country where you work. And because you will stay abroad for about two years or more, it’s better that you’ll keep your money in a term of savings where you can earn more interest such as Time Deposit or Funds. Some Philippine banks offer special savings program for Overseas Filipino Workers and their beneficiaries.

3. Obtain pension plans for retirement, savings fund, children's educational plan, health insurance or life insurance. Get more if you can, although you already have the OWWA Benefits or Social Security Insurance (SSS) or Pag-Ibig, it is also better to get another one from private insurance company.
It is not always safe to work anywhere, you will never know if you can have an accident in the future that will prevent you to engage in any kind of jobs again. Having some insurance is always a big help.

4. Once you start receiving your salary and suppose you have no debts to pay anymore, make sure you would invest in a property first. If you will buy some property, its’ value does not go down; it's always accumulating or increasing every year. House and Lot or Lot is the best investment of all.

5. If you want to build a house, unless you already got many houses, it is better to build an apartment first to have some additional income. Your wife/husband is in Philippines can take care of your property in case you want them to be a commercial or residential apartment for rent.
If you are earning from the rental of your apartment, you may now save your income and with some additional money from the last few years of working abroad, you can build a new house again for your family.

6. Do not give so much allowance to your beneficiaries that could only make them spend your remittance for unnecessary things as well. You should let them know how hard it is to work in a foreign land and earn that money that you are sending for them. You should let them know how to spend wisely as well.
Do not stay quiet or ashamed to tell and explain how hard it is to work as Overseas Filipino Workers abroad to your family. If they do not know about your real situation, they would just think that you are just "collecting" money while you're walking on the road. So, they would just spend your remittance on things that are unnecessary.

7. If you cannot bring your family while you are working abroad and your vacation is not yet due, why not try bringing them to your country of work. Sometimes, you need to spend a little to maintain the relationship and bonding of your family.

8. If you are on vacation, do not spend all your savings thinking that you still have a job in abroad upon returning there. It is not always like that. I have someone that I knew, who had bought brand new car, spent most of his savings while on vacation but by the time that this fellow overseas Filipino worker is now going back to work abroad, his employer's company suddenly closed. He did not know that the company was already failing and facing bankruptcy.

9. Rather than spending too much of your savings on less important things, just improve your skills. You will never know that your current job will still be on demand after one or two years. You should try to be knowledgeable of other types of skills and profession.
If you are a carpenter, acquire some skills that could help you to become a contractor just in case you want to have your own business and would like to get your own carpenter to do the jobs.

10. Do not start your own business if you do not have any idea about the business. Do not just listen with other people’s suggestions, think about it. It is not because having an Internet Cafe is one of the good businesses these days, you will engage yourself with that same business even you do not know anything about computers.
If you have an experience in carpentry jobs, start business that is related to carpentry such as cabinet making, construction materials retail, painting etc. Do not engage in other kinds of business unless you have also experienced it before. This is not the proper way to do business. Put up a business that you are familiar with and that you most love to do.

How To Spend Money Wisely

We hear it all the time. Filipinos complaining that they are unable to save because their income is barely enough to provide for the needs of their families. In fact, many grumble that they are neck-deep in debt. We have also heard of stories about seemingly ‘rich’ people who have 6-digit monthly earnings, nice, big houses and flashy cars yet are in a financial mess just like many of our poor kababayans. This just goes to show that anyone can be broke at any income level.

On the flipside of this sad reality is an encouraging fact; that almost everyone has the ability to become wealthy or at least financially stable, even the low-salary, ordinary employees. Unfortunately, only a few have the discipline and dedication to actually go for it. Majority of Filipinos have very poor spending habits and seem to have been programmed to spend & spend. They need to break out of this habit in order to start saving, which is the foundation for building wealth. Without any savings there’s no way that you can become rich or even financially stable.

Filipinos are so used to living from payday to payday that they have become quite “skilled” in spending all the money that gets into their hands even if they don’t need to. The huge billboards along EDSA, enticing print ads & the cool commercials with catchy tunes on TV and radio aggravate this culture of careless spending. One newspaper ad even elevated splurging to a divine act. It is no wonder then that people spend first before saving anything. This is a recipe that can lead to financial disaster. Almost always there’s too little or nothing is left to save after making all those payments and purchases.

There’s no magic formula for having enough money to save, only one simple solution: spend less than what you earn. In an environment that encourages spending this is easier said than done. Nowadays, it’s even possible to spend more than what you earn with that “plastic” inside your wallet. If you do not keep your expenses from going through the roof, not only will you have zero savings, that scuttles any chance of you getting rich, but you could soon find yourself in a debt hole that’s very difficult to escape from. Fortunately, there are practical & “common sense” measures you can take to help you control your expenses and start living beneath your means.

First, take a long, hard look at your current lifestyle. Many people have a lifestyle that they really can’t afford. Many supposedly “rich” people have become a financial wreck because of their extravagant lifestyle. If you regularly find yourself unable to make ends meet or you’re sinking deeper and deeper into debt despite a big income, a change to a more modest lifestyle may be necessary. Often it will just take little changes to get you on the path to financial stability.

Second, know what you are spending on. You can’t manage what you don’t know. Try to list down your expenses for the past 2 months. If you can’t accurately recall them you need to keep track of your daily expenses for the next one or two months to give you a good idea of where your money is going. Every day record every expense you make including even the small items like candies, sticks of cigarettes and jeepney or bus fare. At the end of one month examine your list. You will probably be surprised or shocked to find out that you are spending way too much on things you can do without.

Third, cut down or eliminate unnecessary expenses and you’ll have instant money available for savings. Smoking a pack of cigarettes a day may not seem to cost very much. But it would add up to about P1.2 million in 30 years if you save & invest the money. Do you really need a daily dose of high-priced cappuccino? Cut in half your craving for it and you’ll be more than a million pesos richer 30 years into the future. There are many other things you can live without: alcohol, drugs, designer wear, excessive chatting, gaming & texting, all forms of gambling, expensive hobbies, etc. Do your health and your pocket a big favor by getting rid of these.

Fourth, create a budget and stick to it. A budget helps you control and manage your personal finances. From the list you made categorize your expenses and allocate a reasonable amount for each category. But before anything else make a budget for your monthly savings. Start with a manageable figure, say 5% of your income, and gradually increase it once you get the hang out of saving. Building wealth doesn’t mean you will have to be a miser the rest of your life so set aside a little amount for leisure activities and some “nice to haves.” A budget will be useless if you don’t stick to it. Make every effort to stay within your budget and do not overspend.

The road to financial stability and wealth is not an easy one. Learning to spend wisely will make your journey a little easier. Remember, almost everyone has the ability to become rich and the choices we make today will determine our financial health in the future. Make the right choice!