Mistake # 1: Not planning your household expenses. One of the main reasons why Filipinos choose to work overseas is to be able to afford paying their bills, groceries, and other household expenses on time. But if you do not take into account how much you and your family spend and set up the right budget to run your household well every month, you will end up overspending or wasting money on unnecessary expenses.
How to avoid the trap: Itemize and list your usual monthly expenses so you can set a realistic budget for your family. Remember to be prudent about your expenses so you can set aside an amount for emergencies that may arise and for investment. A larger income should not be an invitation for you and your family to spend unnecessarily.
Mistake # 2: Living large while incurring or not settling your debt. You may have had to borrow money to finance your job application abroad. Be mindful of the effects of not paying your debts as soon as possible. As soon as you earn your income, don't be tempted to keep up with the Joneses--buying the latest gadgets and splurging on new shoes and clothes.
How to avoid the trap: Live simply and honor your commitments. If you had to borrow money, allot a portion of your income to debt payments so you can settle them in the soonest possible time. There is no need to impress anyone or flaunt your new wealth. The benefits go a long way in investing your income wisely and ensuring your family is taken care of in the future.
Mistake # 3: Not planning for health-related emergencies. As families struggle to balance their bills, setting up a budget for health emergencies sometimes gets passed over for other immediate expenses. But part of keeping your family’s health and safety is being financially ready for any illness or accident that might happen. It is important to have some form of protection for you and your family so that these kinds of emergencies will not break your budget.
How to avoid the trap: Include your life and health emergency plans in your monthly budget. How will you fund health emergencies in the future? An ideal way for you to prepare for these unforeseen expenses is through BPI-Philam’s Dollar Protect Plus, which allows you to grow your US dollar portfolio while at the same time protecting your income through its life insurance component. Optional riders include accident and health coverage plus medical reimbursement, which prepare you for health-related expenses.
Mistake # 4: Not preparing for retirement. One thing that any working individual—an OFW in particular—needs to remember is that you cannot work forever. Time will come when you must stop and rest and enjoy the fruits of your hard work. When that time comes, OFWs like you must have enough funds and a form of insurance or protection to help you live comfortably in retirement.
How to avoid the trap: Set up your retirement fund--and start early. Grow your fund beyond the usual savings account by investing it in different financial channels such as mutual funds or stocks.
Mistake # 5: Not making financial literacy a priority. Financial literacy means being able to understand how your money works and having the skill and knowledge to make informed decisions concerning your finances. It is a must to know that there are several opportunities to grow your money, one of which is investing using the currency that you earn.
How to avoid the trap: Seek the guidance of an expert who can help you look over possible investments and evaluate them so you can choose the right product for you. Don't be afraid to ask questions and keep yourself updated and informed with news and info about the financial product of your choice.
With your income as an OFW, you are a step closer to achieving financial freedom for you and your family. Maximize your opportunities with Dollar Protect Plus, an affordable plan that allows you to fulfill your goal of providing for your family, providing life and health protection, and growing your foreign currency income through investment.
Not sure how to start? For more information, visit the nearest BPI branch and talk to a Bancassurance Sales Executive.