Living in the United Arab Emirates (UAE) as an overseas Filipino worker (OFW) is never easy, especially when it comes to handling money matters.
Aside from the living costs of one of the most expensive cities in the world, there are also bills to pay back home in the Philippines or families and relatives to help financially.
Juggling bills left and right, most OFWs tend to skip the part where they stash some cash for themselves—just for their own sake.
Jay Tolentino, financial coach and creator of Pera and Purpose Podcast, encouraged everyone to save up for their future. Here are some practical tips that he has for UAE OFWs.
1. Identify your financial why
Saving up money sounds good to the ears, but putting it into practice seems hard. Therefore, it is always important to go back to the “why.”
“Understand the core purpose behind your savings goal,” says Tolentino. “It’s more about a person’s core values and digging into what’s truly important in their life and asking themselves why.”
Tolentino shared a smart practical, saying that OFWs should ask themselves the 5 whys.
“Simply ask yourself why 5x to know your deepest reason for something,” he said. “For example, traveling can be a savings goal for a person who values learning other people’s culture or sharing the experience with the family to build stronger relationships.”
He also noted that there will be moments when one would just want to give up, so it’s crucial to know the source of your motivation.
2. Pay yourself first
According to Tolentino, it is important to allocate a portion of one’s income to their savings. Think of it as if savings are one of the bills that need to be paid.
“Keep this separate from your regular account to avoid temptation,” says Tolentino. “Any amount (10, 50, 100) is fine. The important thing is you build the habit of saving.”
Tolentino also said that automating one’s savings is helpful. OFWs can automate their savings through several banks or high-interest savings accounts.
3. Resist lifestyle inflation
Lifestyle inflation refers to the increase in spending when an individual’s income gets a raise. This causes people to live a life of paycheck to paycheck where they find themselves just having enough money to pay the bills every month.
“As your income grows, maintain your modest spending habits,” advised Tolentino.
Therefore, having a strict budget and sticking to it helps OFWs to only spend the right amount of money on the things that matter.
4. Choose your circle wisely
While saving money independently poses challenges, having support from others significantly enhances the likelihood of success. Additionally, forming connections with individuals who have similar interests and lifestyles can also impact one’s life.
“Surround yourself with financially responsible individuals,” Tolentino said. “Your financial habits often mirror those closest to you.”
5. Avoid unnecessary debts
Many OFWs usually fall into unnecessary debt, especially with “Buy Now, Pay Later” schemes in the UAE. Although these services can be helpful in some cases, one must make sure that their debt is unnecessary.
Tolentino said: “It’s easy to fall into the trap of taking out loans in the UAE.”
“Many OFWs get caught in this problem, but it’s crucial to steer away from debts that aren’t absolutely necessary,” he added.
6. Focus on income growth
Lastly, it is important to remember that higher wages mean more savings. Get stuck in the same job for too long, and your savings might find themselves in a bit of a standstill, too.
“Your savings potential is capped by your earnings,” Tolentino said. “Seek opportunities to increase your income.”
We must understand the importance and urgency of saving up for our future. It’ll keep you stress-free in emergencies and let you laugh off whatever the future brings.
