No one said that OFW life is easy. In fact and in spite of the money you are earning, it is going to be one of the toughest parts of your life because you are in a foreign land and away from your family. What makes it even more challenging is making sure that your hard-earned money is spent properly.
This is where money management strategies comes in. This is crucial because this could dictate the financial future of your family such as budgeting your daily household expenses, paying off loans, or the amount of savings you have.
Here comes the challenge: what type of strategy should you follow considering that you are thousands of miles away from home?
Here are some options:
Money Strategy No. 1: “It’s On Me” or Relying on One Income
This is the most common setup among OFW families wherein one works abroad while the other one stays at home and takes care of the kids. In this setup, the main income earner, which is YOU, pays for all expenses at home. You set up an account, transfer money online, and your spouse will withdraw from the said account in the Philippines, On the other hand, the other spouse is responsible for budgeting the money you send – utility expenses, grocery, kids’ allowance, tuition, and so on.
The not-so-good aspect of this setup: it could cause misunderstanding and financial woes to the couples, especially when the money is not well-accounted for. You might tend to question where the money goes and constantly remind your spouse the sacrifices you have to make just to make sure that every expense will be paid. On the other hand, the non-earning spouse feels less dignified and may accuse you of not trusting him/her.
To fix this, both must do your best to be transparent and accountable as to where the money goes. Be clear that the money you sent is for a specific expense only and must not be used for unnecessary purchases. You should also encourage your spouse to look for additional ways to earn such as getting a freelance job or putting up a small business. Additional income could mean a lot in helping you manage expenses back home.
Money Strategy No. 2: What’s Mine is Yours, What’s Yours is Mine
This is another common setup among families, including OFW families. In this set-up, money earned is pooled in a common fund and said fund will be used to cover all expenses at home. This works especially when both spouses are earning since you don’t need to keep track of each other’s contribution in the family as long as you know how much each other is earning.
Here comes the not-so-good part: in case you have trust issues, then this setup won’t work for you. This is because both will constantly nag about where the money goes and whether or not the money you deposited on the said account is used for the said purpose. There is also a tendency to compare since naturally, you will be earning more, which could also cause resentment.
How can you address these issues? Start by enumerating the expenses you have to pay for every month, set up a specific budget for each, and agree on a spending limit. It is also important to consult with each other before making a purchase, regardless of the amount. This way, you can keep your spending in check.
Money Strategy No. 3: One Works, The Other One Saves
Let’s say your spouse has work but income is irregular. On the other hand, you are sure that you are getting this amount every month.
How do you strike a balance? The spouse with a stable income is in charge of expenses while the other one takes care of savings and investment. This is an ideal setup because there is a higher chance that you will be meeting your financial goals since both parties are contributing, regardless of the amount.
The issue would be when one loses her income. Thankfully, there are tons of ways to help the other spouse earn money. If saving is consistent, then the money saved may act as a buffer to help one get back on its working feet.
The Bottom Line
These three money strategies will work but at the end of the day, it will all depend on you and your spouse. Before you leave the country, sit down and discuss how BOTH will handle the expenses and the strategies you will use to ensure that nobody goes home hungry.
More importantly, be committed and disciplined. Any of these strategies won’t work if you are not serious with how you will handle your money.
So, which one is your money strategy?