Poverty and work abroad. What’s the connection?

Work abroad is probably one of the most common advantages of globalization. It has benefited a huge number of families who were unable to take proper care of their loved ones. Foreign countries offer a huge array of workplaces that pay relatively well and give the benefit of “no-doubt” for the future.

As a financial institution with years of expertise working with expats and foreign workers, we have noticed one strange correlation between working abroad and actual poverty.

Why is it so? Isn’t work abroad supposed to handle the financial insecurities of the family and the worker himself?

Andrea Anolin, CFO executive assistant for joint migration and development initiative said on this occasion: “People tend to think that once you go abroad, it seems that you get a higher income and that will solve all your problems,” adding that many OFW families may already have financial problems and be deep-stuck in debt even before leaving the Philippines. This can often be the result of accumulation of debts due to over-borrowing as these families and workers believe that the money can be returned once hired overseas.

“The families who are left behind and also the migrants themselves have very unrealistic expectations. They equate going overseas with an automatic improvement in the quality of their lives”.

Another “evil” for such families is the constant nagging for money by their families left behind. Most OFWs are said to easily give in to the requests of their families and relatives for remittances and gifts from abroad. This results in the need to work even more or do illegal jobs, risking their health and working status.

This is a huge mistake: the inability to save an adequate amount of money and take the “debt-first” attitude results in a never-ending circle of debts and staying away from the family for more extended periods of time.

What do you have to do to be financially secure? Read this article by WorldCom Finance.

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3 Tips to Manage Your Finances from WorldCom Finance

As a company that has worked in the niche of finances for over a decade, we have seen a lot of examples of how the inability to build a budget and stick to it has played a bad joke with a big number of people. Therefore, we always encourage every foreign worker to keep track of their budget. Let’s look at three simple tips that will shed some light on how to stay financially secure all the way!

        Start with budgeting

What do you need to do? Simply keep track of all your expenses for a period of one month. There’s no need to try to save, just be your natural self as you spend. This is necessary to get an idea what your actual expenditure is like. If you have to make big payments at a given month (e.g. education, mortgage), make sure to include the fair share of this money into the expenses of that given month. As the calendar turns, it’s time to face the true picture of your expenditure?

2      Count the sheep

After the month ends, collect all your receipts, and notes of spending and add it all up together. Start by listing the actual sum of your salary/income, and go on listing what you spent money on. As an overseas worker, this list is so important to you: it determines how soon you can get back and reunite with your family.

Let’s look at these 2 lists:

List 1:

Actual income: $1500

Sent home: $700

Rent: $150

Household bills: $75

Groceries: $150

Dining out and drinks: $100

Emergency to family: $200

Gas: $50

Personal expenses: $100

Remaining: -$25

List 2

Actual income: $3,000

·         Sent home: $800

·         Rent: $400

·         Household bills: $125

·         Groceries: $100

·         Dining out and drinks: $100

·         Gas: $100

·         Emergency: $ 100

·         Personal expenses: $400

Remaining: $875

See the difference? In the second budget, there is some money allocated for savings, and that is what you need to achieve.

       Write your new budget

Now that you know how much you spend, you can also make sure to run your budget in a way that cuts down on unnecessary expenses and gives you room for savings. For example, if you spent $300 on dining out and drinks, you may want to cut down this expense and only spend about $150 on this. You should try to avoid debt at all costs, at the same time allocating a realistic sum for savings. Don’t strain yourself to the point of hating your budgeting, bu make sure you don’t spend what you haven’t earned, too!

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Why Have a Savings Account?

With most people having a steady job, you may sometimes wonder if you need to have a savings account. To understand this, let’s look at a couple of points.

The most probable scenario of you working abroad is this: you work for one full month, you get your salary at the end of the month, and you start the expenses: sending some money home to loved ones, and saving some for your own needs. Usually, by the time the month ends either you or someone from your family may end up in need for more money. However, having a savings account may make things a bit easier on your side.

What is a savings account?

A savings account is one you use specifically to set aside a given amount of money every month. This money is your emergency go-to fund, your pledge for realising some dreams.

What are the advantages of a savings account?

This account is very secure. All your investments are safe. Besides, there is the advantage of interest rates. Most savings accounts have the option of being enlarged, offering interest rates at the same time. Besides, life is quite complicated and you never know when you may need some emergency funds.

How do I set aside money for a savings account?

Make it a rule of thumb to set aside at least 10% of your monthly income for your savings. Actually, it is better to save up to 20%, with 10% as your emergency fund and the other 10% as money for plans and dreams.

Are you planning to have a savings account? We at WorldCom Finance can be of help. Make sure to use the best options and get the best rates for your investments.

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The Light of Opportunities: How Can OFWs Avoid the Deadly Route to Debt?

Despite the fact that OFWs earn a higher income than most of the locals who stay in the Philippines, many of them still fail to manage their finances well, or manage them in any way at all. As a result they may go home without any income and even having mounted piles of debt.

Why does it happen like this? The first and most common reason is that there is a "culture" of borrowing among Filipinos. Actually, 8 in 10 Filipinos have borrowed money for expenses like food, utilities or education.

OFWs are no exception, but in order to not have to extend their stay abroad, they need to be cautious and manage their income in a way that doesn't take them to loads of debt. So, we at #WorldCom Finance offer you too look at the times when borrowing money is okay

When is borrowing okay?

1. Borrowing for real needs
No, a new iPhone isn't one of them. Only borrow money when you have no way of not doing so: e.g. paying for your kids' education. Never borrow money for leisurely activities or outings. You may fail to notice how these debts add up.

2. Borrowing for business
If your borrowing is going to result in you earning more money, you may go for it. However, make sure that you never borrow from sources with interest rates higher than 20%.

3. Borrowing from legit sources
Whenever you borrow money, it's mandatory that you do so from legitimate financial institutions. Never borrow from unknown sources.

What to do with existing debt? 

If you don't wanna end up in a bad situation, start paying off your debt as soon as soon as possible. Remember that getting rid of it is your number one priority, therefore, your needs and wants can wait a little. Strictly manage your money (You can do so using worldcomfinance.com products) and don't allow extra expenses to your family.

Once you've got rid of debt, start saving up to 20% from your paychecks, this way, you will be in the position of a lender, not the borrower pretty soon!

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WorldCom Finance against OFW poverty

Being an overseas Filipino abroad isn’t an easy task. People leave behind their families, friends, acquaintances, and entire careers to move to another country on their own and make a better living for their loved ones.

It’s here that the path to a better future lies, but it is often associated with hard work, low pay, and seeing professors in the Philippines work as nannies in this new location.

It’s only logical that this kind of sacrifice should result in exceptional income that would ensure a wonderful future in their homeland upon their return. However, if this is the reality, why do millions of Filipinos get stuck working abroad for years on end without any hope for improvement. And why do they stay in poverty even given their long hours of work?

In 2010, Fr. Edwin Corros revealed that 60 percent of the OFW families remain poor. Among dozens of reasons some like paying off debt or being paid less than promised are rather weighty. However, no reason is as bold as consumptionism.

What do we mean by this?

As an OFW sends money back home for schooling, education, bills and savings, the family starts off getting into the “spending mode”. They can treat their friends and neighbors with drinks, go out every other day and live a luxurious life filled with gadgets, entertainment and fun… for the first half of the month. And then they contact the OFW asking for more money that this employee, who also has traits of consumptionism just can’t afford to send. And off to debt they go.

The strangest thing is that next month when the money comes in, nothing changes. The spending behavior remains the same, and it only adds to the debt already lying heavy on the OFW’s shoulders. This results in disasters: OFWs start looking for second jobs illegally, they get exhausted and are tricked into working in extremely bad conditions. An OFW who has spent a decade working abroad can finally return home empty-handed with nothing saved for education, home, or a better future.

We at WorldCom Finance realized how aggravating this scheme is, and created a money remittance service that cares. Our money management schemes, saving accounts and direct payment systems will allow OFWs not to get into debt and to set aside money for their dreams. Visit www.worldcomfinance.com for more detail.

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Money Transfer Traps: What You Should Know

MAking money transfers is a common experience nowadays. You may be living away  from your family and working to make a good living for them. However, there are some things you should know before sending money back home, in order to make the most of your transfer and not get trapped.
The currency market is the most liquid market in the world, and most currencies are traded on the foreign exchange market 24/7. The thing is- there are lots of hidden aspects in money transfers and if you know some simple things, it will be easy to avoid getting trapped.

1. Exchange rates vary

Exchange rates change multiple times during one single day which means they’re not exactly the rate you will get when you make an international money transfer. So, when you see an exchange rate and rush to make a transfer with this provider, make sure you ask the rate before you make the transfer. this way, you will make sure to avoid fraudsters who will offer very good rates initially but never make your transfer with it!



2. Ask about added fees

Very often you ca be offered very good exchange rates. You are happy thinking you have found a very good deal. However, at the end of the day your family receives much less than intended. Why? Because, turns out, the service provider added a service fee or another hidden fee. Therefore, before making a transfer ask what sum exactly the receiver is going to get.



3. Shop around for the best international money transfer

There's a lot of competition in the money transfer market. Some providers are more punctual and offer better service than others. Shop around and try several ones before you choose one that you will use at all times.

While you do so, make sure to visit one of our shops, because we are sure you will make it your service for as long as you work abroad!

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