Time really passed by quickly. I realized that I am working overseas for 5 years already. Through these years, I saw different faces in the lives of our fellow Overseas Filipinos. One of the common concerns of working abroad is the improper management of finances. I have gathered 6 regretful money mistakes that every Overseas Filipinos should avoid.
1.) Tendency to always borrow money. Some Overseas Filipinos think that they have enough resources to pay off their debts every time. This is the main reason why they always tend to borrow even if they don’t need those new gadgets and new appliances. They feel that they have money every month to pay of the debts. What if the unexpected termination from work happened? Where they will end up?
2.) 11 Months Savings, 1 Month Vacation Spending. Unfortunately, every time they go for vacation, the savings they accumulated for 11 months, they will just spend every thing in a month and worse is 2 weeks. Because of the fiesta culture mindset, they have the dilemma of giving a big party and gathering. What if the money was drain to waste already for 2 weeks and they still have 2 weeks to go to complete their 1 month vacation? What they will do next?
3.) Shouldering all the responsibilities of the family. Overseas Filipinos have the burden to provide everything for the family to the point that the family became fully dependent on them. They think that this is their responsibility because of the blessing they received working abroad. On the other hand, there should always be limitations so that the family will be self-reliant. What if the bread-winner cannot make money anymore? What will the family do?
4.) Weak financial foundation. Normally, Overseas Filipinos try investments like real estate, business and paper assets without considering to properly protect themselves and their family through life insurance/health care while building their wealth. They tend to look at these investments as status symbols which can be easily recognized by people around them. What if they got sick or something unfortunately happen to them? What will happen to their investments?
5.) No Emergency Fund. Emergencies can happen anytime and many times they don’t have the fund to cope with this unexpected challenges. They have no choice but only to borrow money from friends and worst, they give their ATM Card including passport and a 10% interest per month to the lenders. This will affect their finances dearly. What if they cannot pay for the debts anymore? How will they survive?
6.) Lack of financial literacy. People have the tendency to spend more when they receive more. Why? Because of the sudden change of lifestyle. They don’t know what to do with the increase in the income they receive. That is why they usually end up spending. They buy fancy clothes, gadgets and appliances that are not that important. It is essential to learn the concepts in managing finances. What will be the value of the expensive lifestyle compared to the potential returns of the money invested in sound investment facilities?
At the end of the day, these are the questions that need to be answered. What will they bring home when they return for good? Remittance receipts, mounting debts or hard-earned money that were accumulated through time? Building wealth is all about the decision to get rich and the discipline to reach that goal.