Today, around 1.77 million Overseas Filipino Workers (OFWs) support dependents back home while making a living abroad. While many OFWs shoulder this additional financial responsibility, they are not immune to the sky-high inflation and rising prices felt around the world over the last few months. This macroeconomic circumstance combined with a personal obligation to loved ones may make the practice of setting aside personal savings challenging.
Only one in three OFWs are able to accumulate personal savings. While inflation is likely to remain high for the remainder of the year, money management and budgets are increasingly important.
The following are four savings tips from leading global payments company WorldRemit.
1. Make realistic budgets
Have long-term or short-term financial goals in mind? It’s important to set goals and amounts that are achievable when creating a budget. Monthly bills, remittances, and savings all must be prioritized, but discretionary spending can be factored into budgets as well. That is, as long as these extras don’t go over budget.
The reason why savings are so important to one’s budget is because of their long-term value.
While it is important for OFWs to make sure that they are making ends meet for themselves and their families, setting aside a portion of their income for the future can go a long way to making their dreams come true—whether they choose to stay overseas or return to the Philippines.
2. Create a savings pot
One of the simplest ways to manage money is to create a savings pot. These are specific accounts where people can portion out their savings in order to budget more effectively. This means, once an OFW receives their monthly pay, they can put aside money into savings and not touch it again to build interest and wealth.
3. Pay down debt
Related to tip number two, OFWs will want to consider regularly allocating a portion of their expenses to any debt they owe.
While borrowing money is sometimes necessary, it’s important to pay it off as soon as possible to prevent accruing interest and increasing debt even further.
4. Monitor exchange rates when sending money back home
Sending money from overseas costs money, too. To ensure that one maximizes the amount they are sending, users should choose a service with competitive rates and minimal transaction fees.
Physical exchange services typically have low exchange rates but higher transaction fees, so it’s worth considering online alternatives. WorldRemit, for example, offers zero fees with new users’ first three money transfers.
After their first three transfers, the digital payment service continues to offer competitive exchange rates and different ways for their family to receive money in the Philippines.