COMING HOME FOR GOOD: Financial Management Tips For OFWs
VOL. 1 NO. 1 DECEMBER 2018
BY: MARIA AZALEA FLORENTINO
For millions of Filipinos working very hard abroad for many years, the ultimate goal upon coming home to their loved ones is to secure a financially stable future. The Philippine Statistics Authority reported that there were about 2.3 million Overseas Filipino Workers all over the world in 2017. In their search for better work opportunities and more financial advantages, even if it meant doing long, backbreaking and difficult jobs, their greatest desire was to spend the rest of their lives with their loved ones comfortably in their home country, Philippines. The goal of coming home for good and living comfortably is not just the OFWs sole responsibility. The goal is shared with the rest of the family. Hence, there should be cooperation and agreement among all family members to work together to protect and sustain the financial health of the family. When an OFW has achieved his or her financial targets, it is time to reap the rewards and face a new chapter back in the Philippines.
Kabayan shares five essential financial management tips on how to properly grow and spend your hard-earned money.
Even before coming home, you must create an outline of your financial plans in life to know how to mange your cash flow. Identify the monthly cash inflow like salaries and bonuses.
Then, make the monthly cash outflow projection for personal maintenance like food, house rent or mortgage, transportation, and utilities. The difference should then be allocated to emergency, savings, and investment.
EMERGENCY FUND ALLOCATION
The future is uncertain; hence, no matter how diligently one prepares for it, emergencies can occur. Set aside an emergency fund that's about three to six months' worth of your monthly income. The fund should be enough to cover medical expenses, unexpected home repairs, and other emergencies.
INVESTMENT OVER SAVINGS
Having extra money or savings is important. A big portion of your remittances should automatically go to a savings account. However, it is equally important to remember that even if your savings can serve as a buffer to avoid debts, it is not advisable to allocate all your income into savings due to inflation's effect on the future decrease in purchasing power.
Investing your money is another option. You need to have money to invest and the will to understand how investment works. You don't need a finance degree to learn about stock market trading. There are investment vehicles which are suitable for OFWs like the Mutual Fund, Unit Investment Trust Fund (UITF), stocks, and Personal Equity and Retirement Account (PERA)
A mutual fund is the simplest form of investment in which one can invest a certain amount. A professional fund manager will handle the investor's account to help it earn interest in pool investments.
Unit Investment Trust Fund (UITF) is similar to a mutual fund. The only difference is that it involves a per unit investment in contrast to mutual fund shares.
The Personal Equity and Retirement Account (PERA) is a voluntary retirement account in the Philippines. One's investment is placed in various bonds, mutual funds, UITFS, and stocks. The Bangko Sentral ng Pilipinas website (http://www.bsp.gov.ph/) includes PERA learning campaigns to help investors like OFWs and retirees understand the process
These are just some of the many investments to choose from. Banks that are duly authorized by the Bangko Sentral ng Pilipinas can help potential investors with different investment channels.
START A SMALL BUSINESS
Starting one's own business requires passion, hard work and discipline. The idea of starting a small business is preferable to most OFWs than finding a new local job. Some business concepts that can involve family are sari-sari store, grocery store, catering service, franchise business, internet café, and online selling. If you're setting up one, you must know how to the business works. You must also make sure that your family members cooperate and work on unified goals.
It will be helpful to know that the Overseas Workers Welfare Administration (OWWA) also assists in setting up and funding an OFW's enterprise through financial assistance with free entrepreneurship training in its Balik Pinas! Balik Hanapbuhay Livelihood Program. However, this program is not for OFWs who were unable to finish or complete their contracts abroad. You can approach partner banks of the government such as Land Bank of the Philippines and Development Bank of the Philippines. (DBP) for additional information on the Enterprise Development and Loan Program. You can also check out more details at https://www.owwa.gov.ph/.
INVEST IN YOURSELF
The most important element is investing in yourself to improve and to grow personally, professionally, and financially. Study the options. Ask all the questions and seek all the answers. Plan carefully with understanding and acceptance of the limitations, allowable actions and a realistic goal. The ultimate objective is, of course, to be with family who is as eager to have their own hardworking OFW back in their lives. [K]