But this sacrifice should not be forever. There will come a point in time where our family needs to go back.
For the longing OFW, how will you know if it’s safe to go back? How do you know if you’re financially ready to go home to the Philippines? These are financial steps you can prepare for before going back to our motherland.
Set up 6-Months Fund for Your Overall Daily Needs
The first thing you need to do is build a buffer fund for your daily needs. If you don’t have any source of income upon arrival, you need to make sure that you can maintain your family’s lifestyle. Add up all your food, rental/shelter, transportation, leisure, and other expenses. Keep 6 months worth of that total value.
This also includes the expenses of your dependents like your children or sick relatives. The larger the buffer, the better.
Check out this guide to help you build that buffer fund while working.
3-6 Months Additional Emergency Funds
On top of you buffer fund, you need an untouchable emergency fund just in case something happens. You wouldn’t know what the future holds. But it is better to be prepared.
Without your emergency fund, your buffer fund above will be depleted fast if an accident happens. With the value above, aim to build an emergency fund equivalent to 3-6 months of your expenses.
Look for A Job in the Philippines
We would want to retire as we go home. But the lack of positive cash flow will ultimately put you back to where you started.
Before going home, try to look for a job in the Philippines. If you can’t or having a hard time, you can invest your time to learn bankable skills. Some of this past time learning can be turned into a highly paid freelancing gig.
Enough Capital for a Business
If you have significant capital, you can start a business in the Philippines. Take note that it is hard to set up a successful one. So make sure that you make a business plan first.
Also, still do the tips above, because, on the onset, you can’t rely on a steady income (that you can withdraw monthly) from a startup. But it may provide bigger returns in the future.
Grab Health Insurance
To mitigate the risks further, a health insurance is almost a necessity for you and your family. The exorbitant costs of sickness will deplete your savings really fast. A health insurance can guard you against that high cost.
Try checking out this guide to find the best health insurance possible for you.
Invest in UITFs, PERA Account and/or Life Insurance
If you are saving anyway, try investing in a nest egg that can grow in the future. A Unit Investment Trust Fund (UITF) can be a start. It can provide investment vehicles depending on your risk appetite.
A Personal Equity Retirement Account (PERA) can also be beneficial for every OFW.
It allows you to build a trust fund that has tax incentives per year. And all the earnings are tax-free until you withdraw when you are 55 years old. In case of dire need, you can still withdraw with charges. But at least, you have something saved up in the long run.
Lastly, a Life Insurance somewhat protects you from a major accident from impacting your finances. Teach your family to handle their finances well. And the money from the policy can be a start for your children’s brighter future regardless.
But just in case you don’t use the policy, a life insurance embedded with an investment portion can grow your money further.
Going back to the Philippines is a really big decision. Be cautious. Make sure you are prepared for it.