TABLE OF CONTENTS

I. OFWs: Save For Your Future!

II. Where Should You Start?
III. Save Money and Make It a Habit
IV. Issues on Saving Money
V. Investment Options for OFWs
VI. Things to Consider Before Investing
VII. From OFW to Entrepreneur
VIII. Final Note

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4
5
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Save for
the Future!
Table of Contents:
0

So your dream of finding an overseas job finally came true. You are now
working abroad and earning a higher salary than what you will get in the
Philippines.

You are happily providing the needs of your family and are
generally satisfied with the course of your career.
Is that enough?
Aside from the responsibility of taking care of your familys current finances, there is another
important thing that all overseas Filipino workers (OFWs) should never forget- that is the
responsibility of saving for the future.
It is a known fact that quite a large number of overseas Filipino workers (OFWs) end up going
home broke and with the need to find a new overseas job to survive. The necessity for saving is
even more urgent for migrant workers whose job contract is temporary; usually limited to two to
five years.
The above reasons strengthen the need that all OFWs should have a plan when their job contract
ends. They should be ready for the time when they need to return to the Philippines for good.

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Saving and investing the dollars you are earning may not be your top
priority now. You may also be clueless on what to do or where to start to
reach your goal of a secure future.
Nevertheless, saving for the future to ensure that your retirement years
will be worry-free and happy is one of the best gifts you can give to
yourself and your family.
The future may seem distant now but the earlier you become aware that
your job and earnings may not be here forever, then the easier it may
become for you to seriously start saving, make your money grow and enjoy
financial freedom.
Hence this new electronic book (eBook) from WorkAbroad.ph aims to
provide you with a simple guide towards realizing your financial goals.

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Where should you start?

Ideally, the setting of financial goals should start before an OFW leaves the country.

Achieving the target would be much easier if goals are set early on because aside from keeping the OFW focused,
it can also motivate an OFW to persevere and excel in his new life and career overseas.
However, all is not lost for Filipinos who are already working abroad but are yet to set a goal. It is never too late to
start. Here are some matters to consider when setting financial goals.

Start by setting a goal.

1
2

Make your goals realistic.

Think of a list of things that you wish to accomplish by the end of your overseas work contract. Write
down your list of goals where you can always see it so you will always be reminded of it.
Examples of goals you may want to set are the following: the exact amount of money you wish to save,
properties you wish to acquire, and capital for a business you want to start, etc. Make sure your goals are
realistic by taking into consideration your salary, the cost of living in your country of destination, and
others.
Let your family know about your financial goal.
Achieving your financial goals may be a breeze if you have the support and encouragement of your family
and loved ones. This can only happen if you make them a part of your financial goal by informing them
about it. Ask their opinions about the goals you have set and tell them that you will need their help in
accomplishing it.
You can also discuss with them the household budget so you will know how much to send them as
remittances. Remind them to spend the money wisely because you will work hard for it.
Encourage them to also save money and avoid overspending.
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Financial Goal Template

Your Priority

Your Goals

Target Date to Reach your Goal

Amount Needed to Reach Goal

1.
2.
3.
4.
5.

Download Template

Save Money and Make It a Habit

Can I Save Money?
A person who finds it hard to save money is likely to cite their meager salary as the reason. I am earning so little,
there wont be anything left after allotting money for bills and daily expenses.
If you accept this reason, then does it follow that people who earn more such as the OFWs would have an easier
time saving? The ironic truth is that many people who receive higher salary also tend to spend more, leaving no
money for savings.
This means that the ability to save should not be based on ones salary. Keep in mind that everybody can save,
regardless of their salary. One just needs to put their mind to it and commits to spending less. Putting aside
money for savings gives you protection against life uncertainties and unexpected expenses.

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Money Management
Tips for OFWs
Everybody knows the importance of saving but actually doing it is still a very difficult task for most
people. To make the task of saving easier, here are some money-saving tips that you may want to
consider.
Spend Less: The key to saving money is
minimizing spending. Allot a monthly budget and
strictly follow it. Spending less doesnt mean that
you need to forego basic necessities or totally deny
yourself of luxuries. It mostly means that you
recognize the wants from the needs and living
within or better below your means

Pay Yourself First. Set aside an amount of money

for savings every payday and do this right after
receiving your salary. The idea is to save at least
10% of your monthly income. You can use this
savings in the future for business or other types of
investment. Increase your savings in time by
watching your spending habits and living below your
means.

Make Saving a Habit. When you start setting aside

money for savings right after receiving your salary,
make sure that you do not make it a one-time thing.
Do it regularly without fail so the habit of allotting
money for the future becomes a routine. Once it
becomes a habit, saving would become automatic.

Avoid vices. Starting a vice such as drinking,

smoking and gambling is not only addictive and
expensive; it can also ruin your physical and mental
health. Avoid self destruction and achieve you life
goals faster by leading a clean lifestyle.

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Set a budget and stick to it. Setting a budget is the first and easy step. The real challenge would
be to religiously follow the amount you set per need or want. Make sure you create a workable
monthly budget by taking into consideration the following:

Determine your net income- the actual income you receive minus the taxes and
deductions. You should also include your income from other sources if applicable.

List down all your fixed expenses The regular monthly bills that you need to take care of
such as rent, utility bills, credit card bills, etc. goes here.

List down your variable expenses. The amount that goes to food, clothes, transportation,
and leisure are the variable expenses. The amount may change monthly.

Add up your fixed and variable expenses and minus it to your total income. Your
income should be higher than your expenses and the difference will go to savings.

Adjust your expenses if needed. If your calculations reveal that you are spending more
than you are earning, then you need to make adjustments in your variable expenses.

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Check Out this Monthly Budget Template

Fixed Expenses

Variable Expenses

Total Monthly Income

Total Monthly Expenses

Difference

1.
2.
3.
4.
5.

Download Template
List all your expenses in a notebook/journal. Some people who run out of money would reason that they do not
really know where the money went. If you are one of the people who find yourself constantly going broke days before
the payday, then you may want to list down all your expenses in a journal to understand your spending behavior.
Doing this will let you discover where the large bulk of your money goes and may give you ideas on how you can save
money. For example, if you discover that you have been spending too much on your lunch then you can consider
bringing packed lunch to work.

Spend wisely. People who are money-wise can buy lots of stuff but still save money. They do this by choosing highquality items with a slightly higher price than low-quality items with lower price. Items that are more expensive lets
you save money because it may be more durable. Buying an item of low quality would actually make you spend more in
the long run because you may need to buy a new one soon.

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Use credit cards wisely.

Make your credit card work to your advantage by availing rewards you can get by being
a member. However avoid unnecessary purchases and think twice before saying yes to
promos and special offers because there is no such thing as zero (0) percent interest.
Refrain from buying anything that you cant afford to pay in cash and always pay your
credit cards bill on time and in full.
Dont expect things to be easy. Remember the saying, "No Pain, No Gain". It is
always easier to spend without worrying about tomorrow so one should not expect the
goal of saving money to be a walk in the park.

Issues on Saving Money

How can I save money when I am full of debts?
Being in a worse financial state should strengthen rather than weaken your resolve to
save money. First accept the reality that saving is not possible at the moment because
you need to pay your debts. It is better to forego saving for a while than suffer from
charges. Give yourself time to settle and eliminate your financial debts. Start building
your savings when you are finally debt free.
I cant save money, because my family in the Philippines keeps on asking for
more money from me.
The family back in the Philippines may ask more than you can give. They may also state
reasons that would make it hard for you to say no to. Remember that it is always a
good thing to help but giving more than you actually can may hurt both of you in the
long run. Giving them everything you have will teach them to be overly dependent on
you. Meanwhile, letting them know your true financial situation can motivate them to
manage on their own. So learn to say no by prioritizing your own needs too.

How can I save if so many people keep on asking me for loans?

There is this notion that OFWs are earning much more than their counterparts in the
Philippines so your family or friends may assume that you always have extra money to
spare. Again, only help if you truly can. Some say that lending money to families and
friends is risky because aside from the possibility of not getting your money back, it
may also damage your good relationship with them.
I plan to save money, but I think it is still too early for me to think about
retirement.
Retirement years may be the farthest thing from the mind of many OFWs. In a report
released by the National Statistical Coordination Board (NSCB) entitled, "The Pinoy
Diaspora: Where do our OFWs come from and where do they go?" OFWs who are
between the ages of 25-29 comprised about a fourth of the total number of OFWs.

Quick Tip
Wants vs. Needs Principle
Before buying something, ask
yourself first: Do I need this or
Do I just want this? If you
really need it, then you should
buy it. But if you simply want
it, then you might want to wait
for a few more days before
buying to see if you still want
the item.

However, the earlier you start thinking of its impending reality, the easier and faster it
will be for you to achieve financial freedom. In case you are wondering when the right
time to think about your future- is the answer is now!

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To further motivate you to start saving as early as possible, take a look at this simple chart that
shows the time value of money:

Time Value of Money Chart

Start

End

Annual Contribution

Annual Interest

Final Value

25

65

24000

0.05

Php1,920,000.00

26

65

24000

0.05

Php1,825,200.00

27

65

24000

0.05

Php1,732,800.00

28

65

24000

0.05

Php1,642,800.00

29

65

24000

0.05

Php1,555,200.00

30

65

24000

0.05

Php1,470,000.00

31

65

24000

0.05

Php1,387,200.00

32

65

24000

0.05

Php1,306,800.00

33

65

24000

0.05

Php1,228,800.00

34

65

24000

0.05

Php1,153,200.00

35

65

24000

0.05

Php1,080,000.00

36

65

24000

0.05

Php1,009,200.00

37

65

24000

0.05

Php940,800.00

38

65

24000

0.05

Php874,800.00

39

65

24000

0.05

Php811,200.00

40

65

24000

0.05

Php750,000.00

This chart effectively shows the advantage of starting to save at a young age. A 25-year old that starts to save
Php2000 a month and earns 5% per annum would already have Php 1,920,000 by the time he is 65. However, one
who starts to save the same amount that earns the same interest at 40 years old would only have Php 750,000 by
the time he is 65.For the 40-year old to earn Php 1,920,000, he needs to save for a longer period of time.
So if you want to have an easier time saving and for a shorter period, save money as early as possible.

Where to Put Your Money

Savings Options for OFWs
When you become more confident with income
management and saving money, you may notice your
savings growing and just keeping it in your wallet or in
a safe box inside the house is no longer the best
option.

It is now time to examine the various ways on how one

can save money and let it grow both here in the
Philippines and abroad. The usual option is to keep the
savings in a trusted bank where the money will not
only be safe and secured, it will also accrue interest.

However aside from a regular savings account, other

types of bank accounts may also interest you. Study
their benefits and choose the one that best fits you.

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Savings Options for OFWs: Regular Savings Account

Pros: For a minimum maintaining balance, you can already have a savings account
that earns interest. You can also withdraw your money anytime you want.
Cons: The interest rate is also low, usually only 1% per annum.
Recommended for those who are just starting to grow their savings.

Savings Options for OFWs: Time Deposit Account

Time Deposits. You agree to put your money in a bank for a certain period of
time with the condition that you cannot easily withdraw it.
Pros: Interest rates are slightly higher, compared to a regular savings account,
usually 3-5% per annum.
Cons: It will require a higher maintaining balance and your money is locked up for
the specified period. You will be charged a certain amount for any withdrawals
made before the account matures or without advanced notice.
Recommended for those who knows that they would not need the money for a
certain period of time.

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Savings Options for OFWs: Special Retirement Savings

Special Retirement Savings. A special type of deposit that offer higher
interest rate and allow depositors to save money for retirement. Retirement
accounts with varying terms and conditions are offered by Philippine banks.

Pros: Allows depositors to earn a higher interest and assure them of money
they can count on during their retirement. Some retirement accounts also offer
a tax-free income.

Cons: Most retirement accounts are long term so withdrawing money in case
of emergency may be allowed but would require a penalty charge.

Recommended for those who want to be financially secure when the time when
they can no longer work comes. Also for those who can conveniently save a
larger portion of their income to a savings account that will be locked up for
several years.

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Make Your Money Truly Grow

Investment Options for OFWs

Having money in a savings account is a good start but it is still not enough. The next step should be to
look for investment opportunities that would make your money truly grow.
The truth is your money stashed in a savings account does not really grow. Over time, the money
earned through savings is beaten by the rising inflation rate.
For example, the Php5, 000 in your savings account that earns 1% per annum would give you Ph50
earnings after a year. Though you are now richer by Php50, the true value of your money may have
actually decreased than increase. Due to inflation, your Php50 last year can buy a lot more than the
Php50 that you now have.
On the other hand, the money you put in an investment can really grow. Investments make it possible
for your money to grow more and at a faster rate so you are able to beat the inflation. Migrant workers
can start investing even while they are still working overseas because some Philippine banks offer
investment opportunities for OFWs.

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Investment Options
Put your money in mutual funds.
Mutual fund is an investment vehicle that collects money from a number of
investors to be able to buy and trade government securities or stocks.
Purchasing government securities means you are lending money to the
government or government-owned companies. In buying stocks, you get to own
a part of the company where you invest your money on.
The money in mutual fund is managed by professional and authorized
institutions. There are different kinds of mutual funds that are offered in banks
and other financial institutions. There are also authorized government security
dealers that offer mutual funds.
To know more about mutual funds, you can check out www.pifa.com.ph this
website offers basic information about this investment vehicle as well as a list of
all valid fund members.
You can check valid government securities dealers (GSEDs) in the website of the
Bureau of Treasury. You need to carefully examine the different types of mutual
funds, its potential and the risk involved to get the most out of your investment.
Pros: One can invest in a mutual fund for as low as Php5,000. It is
perfect for those who are newbies in investing because the required
amount and the risk for failure are both low. Mutual funds also invest
money in various companies so the risk for failure is lessened.
Cons: Mutual fund investors pay a certain fee for the fund managers
that handle the investments. The risk may be low but there are still no
guarantees.

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Invest in real estate

This type of investment involves the purchase of real estate for profit
rather than for residence. Real estate companies in the Philippines
now targets OFWs and offer them house and lots or condominium
units. One can also purchase apartment buildings that would yield
rental income. One can also purchase lands to be developed or lands
for farming.
Pros: The value of a property increases in time. You can sell it
for a higher price or leave it as an inheritance to kin.
Cons: Buying a property requires large amount of money. It
may also take a long time for the property to start giving your
profits. Buying a property may keep your money locked up for a
long period without yielding any profit.

Start a Business

Pros: You get to become your own boss and would have the
opportunity to pursue or specialize in the area you are really
interested in. Successful businesses would also let you earn
big money.
Cons: You may need to invest a large amount of money to
make a business run. Aside from that, you also need to exert
much time and effort. Starting a business is a great venture
that demands much from you. In spite of all this, the
possibility for your business to fail is also very high.

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Getting Insurance Policies

An insurance policy is a good investment because it protects you
from lifes unexpected turn of events. There are also insurance
companies that come with a savings and investment option. You
need to carefully study your needs and goals to determine the right
insurance policy to get.

Once you decide to purchase insurance, take time to read the

coverage, the cost and the terms and conditions. Younger people can
benefit more from insurance because they have to pay lower
premiums.

Pros: Insurance policy holders can both have savings and protection.
Cons: Most insurance agents would only talk about the benefits and
leave you clueless of any disadvantages. Insurance is also more
expensive for older people and their application may also be
disapproved.

Quick Tip
Thinking how much of your money should
you invest?
The amount that you should invest should
depend on your risk tolerance for risk profile.
Ones risk profile will reveal a persons current
financial situation and how much of that
amount he can afford to put in an investment.
It will also help one determine the investment
vehicle he or she would be most comfortable in.

To do this, it is highly recommended for an

investor to undergo an investment risk
profiling. It is a set of questions about ones
finances and attitudes towards risk. This is
usually provided by banks and financial
institutions that offer investment opportunities
so you can request this to your financial
advisers. One can also search for investment
risk tolerance quiz online.

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Things to Consider Before Investing

An OFW is advised to choose the right investment vehicle at the soonest possible time because any
delay causes one to lose money. However it should not be misinterpreted with investing hastily.

It is probably the reason why many Filipinos are either clueless or scared of the word investment.
The result of the Consumer Finance Survey (CFS) conducted by the Bangko Sentral ng Pilipinas
(BSP) from November 2009 to January 10 revealed that 7 of 10 Filipinos would rather depend on
fixed income than take the risk of investing it.
(Source: BSP Website).

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Since all investments come with a risk, your goal is to minimize the possibility of
losing money by making careful and informed decisions.
Consider your finances and your needs.
One investment that may work for others may not be the best for you. The right
investment vehicle can be determined by assessing your own financial status and
goals. Take a look at your finances and decide how much of it can you comfortably
allot for investment.
Consider the risks involved.
You invest your money with the hope of earning more but along with that is the
possibility of losing. You should be aware of how much you can lose and be ready
for the consequences that you may need to face in case the worse happens.
How much can you earn?
Obviously the earning potential should be a top concern for all investors. Consider
the profits you can gain and if it is higher than the inflation rate.
Beware of investment scams
Quick Tip
The saying, Dont put all your
eggs in one basket can be
applied to your investments. It
means that it may be best to try
putting your money in several
investment options.
Putting all of your money in only
one investment vehicle is more
risky because you can lose all
your funds at once. On the other
hand, trying different investments
lets you learn and discover the
best investments that work for
your needs.

Unscrupulous individuals take advantage of the desire of many OFWs to grow their
money fast so they no longer need to work abroad. To avoid losing your hard
earned money, beware of investment offers that have the following elements:

Very high earning potential with low risks. Scammers would often
present an investment opportunity with a money-earning potential that is
too good to resist.
Money will grow too soon. All investments require time and patience so a
promise that your money will double or triple at the soonest possible time is
probably a scam.
Pressure to give money right away. A true investment opportunity would
give you time to study the pros and cons of your actions. Be suspicious if
you are being pressured to give money right away.
Trust your instincts. Do not ignore any doubts that you may have about
an investment offer. It may be best to let go of an opportunity
to invest if certain terms or conditions leave you feeling
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From OFW to Entrepreneur

The current lack of attractive employment opportunities in the Philippines is one of the main reasons why many Filipino
workers chose to work abroad. But since an overseas work contract is often short term, the Philippine government is
encouraging OFWs to create their own livelihood opportunities in the Philippines by venturing into entrepreneurship.
However, the transition from an employee to an entrepreneur is not expected to be easy. An OFW who wish to start his
or her own business would surely have a lot of questions:

Is entrepreneurship for me?

Do I have what it takes to be a

successful entrepreneur?

What are the viable businesses that an

OFW like me can start?

How much capital do I need to start a

small business?

Where can I get the trainings and

skills that will prove beneficial for the
business I am planning?

Having these
questions is nothing
to be ashamed of.
Actually, these
questions need to
be answered before
an OFW plunges
into the world of
entrepreneurship.

Dont worry; the next e-book of WorkAbroad.ph

would focus on entrepreneurship for OFWs.

Coming Soon!

Where can I get the funds I need for

my business venture?

How much can I earn if I invest in a

business?

What can I do if my business fails?

What should I do to ensure success

and profit?

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Disclaimer: The information contained in this e-book is for information purposes only. The
publisher made sure that the information presented is accurate, reliable and up to date.
However, the publisher cannot guarantee that all information is up to date and true at all
times due to the fact that policies and regulations are never constant. The reader of this ebook agrees that the publisher cannot be held liable for any direct or indirect losses that
may be incurred as a result of the information presented in this document.
Copyright January 2013 by WorkAbroad.ph

Other E-books you might want to read:

Guide to working in Singapore

Guide to working in Dubai

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