7 Serious Money Mistakes OFWs Make

Most OFWs leave the country to find greener pastures – to build a better future for themselves and their families. The underlying assumption is that being an overseas means you earn a lot, you will send money back home and become rich. In some cases, this is true.

Unfortunately, in most cases, this isn’t true. For many OFWs, instead of being able to save and invest money, they encounter critical problems which stems from poor financial management.

Why are there OFWs that work so long and hard abroad and yet they end up coming home broke? BAD MONEY HABITS.

In this article, we will talk about some of the worst money habits most of us develop. And then I offer a brief solution.

1. Many do not know how to handle and manage money.

According to a survey by Standard & Poor, only 25% of Filipino adults are financially literate. What does financial literacy mean anyways?  Financial literacy pertains to the basics of handling money wisely and intelligently.

Of course, other than the ‘piggy bank’ strategy, most Filipinos never learned anything about personal finance in school like the importance of saving, thrift values, and basic investing.


Read and learn everything there is to learn about managing your personal finance. Most importantly, ACTIVELY APPLY what you learn. Learning how to do stuff, but not doing the stuff you learn is basically USELESS.

Invest in a good finance book that will teach you how to manage your finances. You can also read the tips and advice of some Filipino financial gurus which are often for free. By being financially literate, you also become informed on how to identify and avoid quick-rich-money-scams or questionable investments.

2. They make incurring debt a habit.

There are instances when a Filipino is left with no other choice but to go abroad and work because of too much debt incurred back home. Before they even started getting their first paycheck, they are already have a lot of debts.

The first few or several paychecks will, of course, be consumed to pay off the debts incurred back home.

In some more undesirable cases, the idea that a family member has already gone to work abroad prompts some families to splurge even before receiving money from their family member working abroad. What do I mean by this? There are cases when OFWs (and their families) feel that they have the power to purchase the things they have wanted for so long. They start borrowing money just to buy stuff that bring instant gratification like furniture, appliances, computers and electronic gadgets with the premise that their soon-to-be-OFW will be earning a lot money and will be able to pay it at some point.


Borrow money only and only when it is necessary and important. Don’t borrow money to buy luxuries (things you don’t need). Moreover, do not borrow money just to pay off another debt. You will fall in the cycle of debt. Follow and practice this mantra with your family: If you don’t have any money, you should not buy anything. OR, you should not buy or spend on things when you don’t have the money.

3. Many fall for the evils of impulse buying and reckless spending.

Earning dollars (or any first-world currency, for that matter) increases our purchasing power at home.  With that, more and more of our “kababayans” get overwhelmed easily and start recklessly spending.

They begin to have this impulsive urge to display their earnings whether in the form shiny gadgets like smartphones and computers, new cars, house and lot. They lavishly give cash or send balikbayan boxes to their family/relatives filled with imported chocolates, canned goods, apparel, and other items bought by overseas workers during their stay there.

When they come home to the Philippines, some OFWs become one-day millionaires. They tend to go overboard and blow their budget on a lot of unnecessary things: nightly parties, weekend getaways, shopping galore, gambling, and so much more.


Exercise restraint. Buy only the things you need. Learn to spend money to make more money. In other words, take motivation in the fact that when you invest your money, it will grow; when you use it to splurge, you are, in effect, decreasing your wealth. Don’t spend more because you earn more. Instead, SAVE MORE, when you earn more. Or better yet, INVEST.

4. Many don’t save at all; others, simply don’t know how.

Despite earning more, many OFWs have a strong tendency to spend more rather than to save more.

Some of them say: “I’ve worked hard for my money so I feel justified in splurging and treating myself to better things.”

This is pretty common. When a person starts bringing home more money, they start spending more by buying a new gadget, a expensive bag, a nicer car, and so on. They call this “lifestyle inflation”, which simply means that the more you earn, the more you wish to spend.


Learn how to budget. Keep a record of all incoming and outgoing money. The first question you should ask yourself is “How much should I save?” NOT “How much should I spend?” Good lord!

You will not work forever. Let that sink in. YOU WILL STOP WORKING SOME TIME (for whatever reason, but that is FOR SURE). Are you going to be an OFW forever? NO.

Therefore, you should learn to save and invest for the future. Commit to save a part of your income through your bank. Open a separate savings account just for your savings fund. You can enroll your accounts into an auto-debit arrangement to help force you into saving regularly.

5. Many OFWs allow themselves to be their families’ Automated Teller Machine (money maker).

Most OFWs send most of their salary back home. They spend whatever little money is left. It is also typical among Filipinos to consider the breadwinners of the family as the go-to person for emergency or non-emergency cash. This is also the case with OFWs. The bad thing about this is that sometimes, the OFW ends up drained. We’ve all seen stories of OFWs


Send you money back home. Fine. But put all the necessary controls and make sure your family back home knows how to manage money responsibly. Teach your spouse or your family proper money habits. It’s also good to have a funds for special requests – like an emergency fund, special occasions fund or a lending fund. For example, when an emergency arises, such as a medical emergency you can reach into your emergency fund.

Another brilliant idea is to set up a lending fund so that when a family or a friend asks to borrow money, you can use your lending fund. The idea behind this is that you are setting aside money that you can afford to lose. Don’t feel guilty when you set a limit to what you can offer as help.

6. Putting their money on unproductive investments (if you can call that investments, anyways).

For a typical OFW, investing means buying items that will include any or all of the following: a house and lot, appliances, furniture, computers, electronic gadgets, car, motorcycle and jewelry. While some of these are valuable, many are unproductive assets – meaning they decrease in value over time and they do not provide additional income. In fact, some of these unproductive assets will make you spend more. For example, when you purchase a car, expect to spend on fuel, maintenance and insurance. Buying unproductive items like these is clearly a waste of your money.


Invest in productive assets aka items that appreciate in value over time. Besides highly tangible assets like real estate and a car used for business, invest in assets like mutual funds, investment-linked insurance policies, UITFs and stocks and get your money working for you.

7. Many do not invest or try to invest at all!

Many OFWs hesitate when talking about investment. They’d rather put their money in savings in banks, which is a really bad idea. The bank is the worst place to put money, except for emergency needs. The reason: inflation. Your PhP 1000 will buy less a year from now. So the only best alternative for you is to grow your money by investing it.


Start investing, no matter how small. Depending on your investment goals, risk tolerance, and time frame, you can start with pooled funds like mutual funds and UITFs. They are simple (and cheaper) to start with and fairly easy to understand. Later on, when you get a better cash flow, you can get into more complex investments like real estate, which is a great option for Filipinos looking for a passive income. Starting a business can also be feasible provided that you understand the business you’re getting into and know and trust competent people who will run the business in your absence.

Working overseas gives you an amazing opportunity to meet your goals and realize the dreams that you have for yourself and your family. While it is great, it is nevertheless not forever. That’s why it’s important to plan for the future.

I hope you have learned something.


Gdfi.com.ph. (2017). How to Avoid the Common Money Mistakes Overseas Filipino Workers (OFWs) Commit. [online] Available at: http://www.gdfi.com.ph/how-to-avoid-the-common-money-mistakes-overseas-filipino-workers-ofws-commit [Accessed 18 Mar. 2017].

Isla, R. (2016). Top Money Mistakes That OFWs Are Prone To Make. [online] iMoney.ph. Available at: http://www.imoney.ph/articles/top-money-mistakes-that-ofws-make/ [Accessed 18 Mar. 2017].

OFW, I. (2016). COMMON MONEY MISTAKES WHY OFWS REMAIN BROKE. [online] Jbsolis.com. Available at: http://www.jbsolis.com/2016/10/common-money-mistakes-why-ofws-remain.html [Accessed 18 Mar. 2017].

Rappler. (2017). Don’t want to be an OFW forever? Manage your money right. [online] Available at: http://www.rappler.com/business/personal-finance/64737-ofw-money-mistakes [Accessed 18 Mar. 2017].

Bongat, B. (2015). 6 Money Mistakes OFWs Commit | MoneyMax.ph. [online] Financial News and Advice in the Philippines. Available at: https://www.moneymax.ph/blog/6-money-mistakes-ofws-commit-and-how-to-beat-them [Accessed 18 Mar. 2017].

iFranchise.ph. (2015). Common Money Mistakes OFW’s Make (and How to Avoid Them!) ~ iFranchise.ph. [online] Available at: https://ifranchise.ph/common-money-mistakes-ofws-make-avoid/ [Accessed 18 Mar. 2017].

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