Money mistakes OFWs commit
There are more than 2 million Overseas Filipino Workers (OFWs) taking up employment in various parts of the globe – from nearby Singapore to far-flung European nations. Whichever part of the world you’re in, you’re bound to see a small goods store selling local products or a kapwa Pinoy to ask for directions. Year by year, the number of OFWs continues to rise due to the belief that ‘the grass is greener on the other side’. However, when the contract ends and it’s time to come home, many Filipinos find themselves with insufficient savings and investments. Based on the BSP’s 2nd quarter (2015) Consumer Expectation Survey, only 49.7% of the households surveyed put remittances into savings and only 6.7% put it into investments.

Here are 6 money mistakes OFWs commit and how to resolve them:

Succumbing to lifestyle inflation

Earning in a first-world currency increases your purchasing power. When you were back in the Philippines and an entry-level employee, a new pair of sneakers would cost almost half your monthly pay. Now that you’re in a different country and earning more, that same pair of sneakers barely makes a dent in your monthly income.

Floi Wycoco, the founder of The Global Filipino Investors (TGFI) community, was guilty of this. “I bought a Php 70,000 watch with my first paycheck back in Singapore,” he says. Buying a watch valued at almost 6 digits is possible for professionals working abroad.

But just because you can afford something, doesn’t mean you should buy it – this could lead to financial damage, as Wycoco would later find out.

How to avoid it

Before splurging, make sure you can truly afford it. Don’t just increase your spending just because you’re earning more; instead, increase the amount you’re saving first, and then you can use the rest for your needs (or wants!).

Falling for the pasikat mentality

“Nung nasa eroplano ako pauwi, yung katabi ko, nagpapaturo kung paano gumamit ng iPad,” Efren, an architect abroad, begins. “Gusto niya ready siya pagbalik ng Pilipinas.”

This pasikat mentality is common amongst Filipinos, and one of the best examples is the Grand Homecoming. Every time an OFW goes home to visit, it becomes a celebration.

“Manlilibre na nga, magpapasalubong pa,” is a statement some OFWs are guilty of. People enjoy being the man-of-the-hour. That Php 1,500 6-person lunch in Max’s Restaurant is equal to a solo lunch in a restaurant abroad, so where’s the harm in that? It’s a great bargain in your mind. The harm in that is when you’re paying for each gimmick, and when your vacation is over, you don’t realize how your expenses have skyrocketed.

How to avoid it

If you can’t help but take pride in your accomplishments, why not spend your money on investments instead? Instead of buying a new pair of sneakers every payday, put the cash into investments such as stocks or build up your emergency fund if you don’t have one yet.


OFWs may post pictures of a new pair of kicks or mobile phones, but behind the screen, they’re packing lunches and renting apartments the size of a closet. Some OFWs send the bulk of their take-home pay to their relatives back home to cover the basic necessities, Junior’s tuition, or the amortization of a house.

However, an OFW might not really know where the money goes to, yet he keeps remitting. When an emergency arises, such as a medical emergency of a long-lost relative, they’re quick to send money that isn’t part of the budget.

Over-remitting happens to most Filipinos because their families greatly depend on them, and some are even the sole breadwinner. Patricia, a project designer who used to work in Hong Kong, experienced this. An OFW at 25, she was footing all her family’s bills since one of her parents was disabled, the other unemployed, and all her siblings were still studying. Because she was over-remitting to her family, they were reluctant to find their own sources of income, and she was unable to save or invest for herself.

How to avoid it

Set a realistic budget, and stick to it. Only remit the amount stated in your budget. In addition, help your family members by giving them opportunities to earn such as setting up a sari-sari­ store or franchise booth instead of you remitting more than you can afford. This will teach them skills that will benefit them instead of them waiting for your next padala.

Disregarding insurance

Recruitment agencies are now required to insure OFWs, but for those who didn’t go through an agency, they disregard insurance because they see it as an additional expense. In your first month as an OFW, you’re scraping by until your first paycheck. How can someone afford insurance? During David’s first month in Singapore, he had to borrow money from a colleague because his pocket money was insufficient to cover the 2-month advance on his rent. There was no room for insurance in the picture which put David at risk when unforeseen events arose such as health issues.

How to avoid it

Once you’ve received your first paycheck abroad, set a portion of your income for insurance, be it life insurance or medical coverage. This protects you from unforeseen events. You’re earning much more, but that also means that costs are higher when accidents happen.

Viewing real estate as the only investment

OFWs have the purchasing power to buy real estate property, and some have more than one. Because of higher wages, they can afford the 5-digit monthly amortization; however, real estate can be challenging if you’re managing the properties on your own without a partner back home.

How to avoid it

If you have properties, ensure that someone you trust is maintaining and managing them back home. And aside from real estate, consider other investment vehicles such as stocks, mutual funds, and Unit Investment Trust Funds (UITFs). Investing in more instruments (versus solely in real estate) minimizes your risk and diversifies your portfolio. For more, read up on the best investments for OFWs.

Disregarding retirement

Many OFWs are excited to retire since that means coming home to the Philippines and being with family. Despite earning a lot in a foreign country, most OFWs want to retire back home because nothing beats the lifestyle in the Philippines. What OFWs disregard is that they won’t be working forever. With only 49.7% of Filipino households saving the remittances they receive, they have a lot to catch up on if they want the retirement they’re daydreaming of.

How to avoid it

Start saving as early as possible and take advantage of the mandatory retirement fund of your country of employment. How do these schemes work? A percentage of your monthly income is placed into investments, and even better, your employer matches your contribution. You are basically getting free money from the employer match. In the US, it’s the 401k; in Hong Kong, it’s the Mandatory Provident Fund (MPF); and in Singapore, it’s the Central Provident Fund (CPF). Ask your employer for more details on these since there are special requirements for expatriates to be considered. For example, you can only open an MPF account in Hong Kong if you’ve been working there for more than a year.

Beating these money mistakes

Working in a foreign country allows Filipinos the power to earn and save more. Avoid the six money mistakes above and pair it with wise financial decisions, and you’ll be able to bulk up your savings and investments. Before you know it, you may even have more than enough to retire early or go back to your home country if you miss your family.

As Floi Wycoco of TGFI, says in an interview with, “There are numerous ways to earn money in the Philippines. What is needed is financial education – knowing what to do – and having the right mindset and goals in life when it comes to your finances.”