Put yourself at ease by protecting those you love
18 October 2017
If you’re working overseas, then you are part of the approximately 2.2 million OFWs who are responsible for contributing at least $2 billion per month in remittances. You’ve seized the opportunity to work abroad—and have endured the challenge of being away from home—to give your loved ones a better future. With what you do for your family and your country, it’s no wonder you’re often referred to as modern day heroes.
What is unfortunate, however, is that despite the remittances and sacrifices, a study by the Social Enterprise Development Partnerships Inc (SEDPI) in 2011 revealed that 8 out of 10 OFWs return home with no savings despite earning and spending many years away for work. This alarming statistic should serve as a wake-up call not only for OFWs like you, but also for your family.
If you’re motivation is to uplift and improve the family’s financial standing, your family must understand that they are all stakeholders and each one plays a role in making the most of this opportunity and great sacrifice. Below are some principles to adopt and tips to consider.
Most OFWs deal with an indefinite timeline of when they can afford to return. However, discussing a target “return home” timeline with your family will help set everyone’s eyes on the family’s financial objectives and the required commitment to make it as short as possible.
Involving family members to ensure that everyone understands the primary objective and importance of their cooperation is needed. This will help establish manageable expectations with regard to money matters like the household budget, remittance schedule, and a savings and investment plan.
With the right mindset and correct approach to savings and investments, you don’t need to stay and labor abroad for too long. A good plan gives your family the priceless gift of presence instead of indefinite years of material presents. Talk about your family's goals and enumerate what steps to take in order to achieve them.
Overseas workers have different financial needs at different stages of their journey.
Before leaving, OFWs usually face steep onboarding expenses like placement fees, which are commonly funded through loans and then settled once the OFW is placed abroad and receives his salary. Loans of this nature are typically costly and settling its full payment should be your immediate priority. Your family members should also keep this in mind so that they stick to an essentials-only budget.
As you settle-in abroad, you should remember the cliché—pay yourself first. This means that personal savings should be set aside ahead of allocating funds for spending and sending home. Expenses during the first months will be costly: housing deposit, housing rental, and buying supplies. Build a robust emergency fund to cover for unexpected financial needs so as to avoid getting into the habit of borrowing money from friends, colleagues, and loan sharks.
While emergency funds are established here and abroad, your family should look into investments and opportunities to wisely appropriate the remittances you send as capital for growing wealth. Find a second source of sustainable income. Many banks offer OFW-friendly products with low transaction costs and provide access to financial experts' guidance.
The goal is for OFW families to use remittances wisely, breaking away from the stereotype of the usual stories of remittance-dependency. Committing to a savings and investment plan allows OFWs to come home and enjoy the fruits of their labor with the people they love the most.
Aside from sticking to a financial plan, your loved ones should steer clear of having vices, as these are not only unnecessary and costly, but is detrimental to their health and may deplete hard-earned savings. In the same way, your health should be a top priority. You will highly benefit from getting insurance protection, because as breadwinners, any risk to your health directly affects your families’ financial standing and future.
BPI AIA’s Life Ready Plus is the perfect insurance partner for the hardworking modern day heroes. While you work hard and look after your family’s financial welfare, Life Ready Plus ensures that premiums are saved and invested, while insuring you against life’s risks. Like OFWs, Life Ready Plus works to ensure that the OFW families’ dreams are protected against uncertainties. It complements your dreams and hard work, helping you save and invest easily, is customizable to suit your needs, and rewards you for being healthy. On your 15th policy year, it further rewards you with a One Time Bonus equivalent to 50% of the regular premium to be used to buy additional fund units.
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