As an Overseas Filipino Worker (OFW), what do you usually do right after receiving your salary on payday? Like what most OFWs, do you go to a mall and look for sales? Do you eat in a restaurant with your office-mate to treat yourself after a month of hard work? Do you go to a bank or to the nearest Western Union to send a remittance to your loved ones in the Philippines?
To any OFW, payday should suppose to be one of the happiest days of his life. But with lots of bills to pay and other financial obligations, payday can cause worry as you don’t know how to stretch your budget. In addition, salary day can be frustrating when the fruit of your labor had just passed through your hands and had gone easily like bubbles. Three days after payday, you become broke and have no savings.
If this is your current financial condition, it’s no wonder there is no room for savings and investing. Let me share with you these seven practical reminders about managing money wisely especially on payday.
1. Pay yourself first
Many OFWs forget to pay themselves first. After spending money to pay the bills and sending money remittance, they often neglect that they also have to save for their future. When I say “pay yourself first,” you should allocate at least 20 percent of your income for your investments or savings.
Before the famine in Egypt, Joseph instructed Pharaoh to keep a 20 percent of their harvest (Genesis 41:34) during the seven years of abundance. Why? Because they understood the financial principle of saving for the future. Therefore, never miss a single payday without setting aside a 20 percent of your monthly income.
2. Allocate amount for emergency fund
Imagine you had received a call from your sister in the Philippines. She said you have to send P30,000 because your father had a stroke. They need the amount for a down payment so he will be admitted immediately in the hospital. What would you do? Or may be your 5-year old son is complaining about a severe stomachache due to food poisoning. How does it feel to have a son who is sick but you have no money to bring him to the hospital?
Build an emergency fund that is readily accessible amounting 3-6 months worth of your monthly expenses. An emergency fund allows you to continue your current lifestyle without going into debt. Having an emergency fund will also help you to reduce stress.