Spending Money Wisely

Filipinos working and living abroad are saving and investing less as they prioritize spending on living expenses despite the commotion in the global financial market. According to a study conducted by Bangko Sentral ng Pilipinas (BSP) for the first quarter of 2016, Overseas Filipino Workers (OFWs) spend on material things to compensate their loneliness and homesickness and to reward themselves for their hard work.

Bangko Sentral ng Pilipinas Consumer Expectations Survey Q1 2016

In  the study BSP conducted, majority of OFW expenditure is on food, household expenses, education, and medical expenses. 97.3% is spent on food and other household needs while 70% of their income is allocated to their children’s education. 56.1% is allotted to medical expenses. The three expenses combined covers more than half of what OFWs spend in their annual budget. This is in contrast to less than a quarter that is spent on investment, car purchase, and house purchase combined. Though OFWs distribute 43.4% of their expenses for savings, only 11% of their total expenses is allocated for house purchase while 6.5% is apportioned for investments. The study also shows that OFWs spend more of their income on purchasing appliances which is 21.9% of their total annual expenditure.

If this is how OFWs spend their income, what are other strategic ways to spend money wisely? If the reason why OFWs work abroad is to desire to be financially independent, they need to nurture an investment mindset. Here are some tips where OFWs and even locals can get started in increasing their earnings and investment:

  1. Set a goal.

Know your goal. Do you have a specific timeline on how long will you be working abroad? If you plan to have an investment in the future and retire early, knowing your goal will lead you to what you will be doing with your hard earned money.

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  1. 2. Make a budget or plan.

Implement your budget and plan where to spend your hard earned money. It also helps that you have to talk to your family about your budget and plan. Ask them to be accountable and be committed that they will also help you in implementing this financial plan. Small sacrifices such as keeping back from eating outside or buying new gadgets or clothes are bearable when your family understands that these sacrifices will lead to a more financially independent household.

  1. Buy things only when necessary and consider if it will give you a good return of investment.

Buying new branded bags and branded shoes every sale is not bad, but before your purchase, consider the reason for obtaining a new bag or pair of shoes. Try to ask yourself these questions when making a purchase: Is it really needed? If not, do I only want to buy this because it is the current trend? If yes, how much should be my budget to cover for these necessities? Always consider if what you are buying is a need or a want. Having one set of bag and a pair of shoes that you can still wear for the next few months is not terrible. Instead of spending money to buy a new bag or a pair of shoes, put it in your savings account or save enough for an investment. Having a budget when making a purchase also helps for you to be conscious of the amount of money you are spending. Spending wisely becomes easier when you have enough motivation to save and invest for the things that you plan to achieve in the future.

  1. Look for legitimate investments where you can put your hard earned money.

There are a lot of investments claiming to be legitimate. Plenty of locals here in the Cordillera have been duped into scams claiming to be legitimate investments. There are a variety of legitimate investments to choose from. We have four recommended investments for you to choose from.

Without discrediting other types of investment, real estate for us is the best investment you can put your hard earned money. This is because real estate is a tangible investment meaning it can be touched, felt, seen, and smelled. We recommend Greenfields for those who are new to investment properties, a Goshen Land investment development in La Trinidad. Greenfields is situated near the famed strawberry fields. It is a mixed use development of commercial and apartment units. These apartment units are ideal for OFWs looking for an investment property that yields passive income in terms of rent. Certificate of title is issued to apartments, commercial units, or condominium unit owners which can be used as loan collateral in banks.*** –Goshen Land Marketing