It’s often too easy for OFW's (Overseas Filipino Workers) to get into heavy debt. It's tempting to take out a personal loan, especially when working overseas in the Middle East, Singapore, Malaysia, even in the United States. Taking a personal loan from many of the "financial providers" turns out to be nothing more than a "loan shark" giving you a loan at exhorbitant interest rates, sometimes in the triple digits.
Taking a "payday loan" causes a lof of OFW's to become buried in debt, and you end up indentured until you pay it off. You don't want to risk being held in a foreign country because of your debts, because many of them can hold you until you pay off your debts.
To make things worse, a lot of OFWs borrow money just to buy needless junk. They purchase cars, new gadgets, luxury bags, flat screen TVs, and many other things that are really not important. I see people living in poverty in Manila and Baguio City, Philippines, and while they live in squalor, they will have big screen televisions, iPhones, iPads, computers, luxury bags, and the latest fashion gear from the mall.
The first time I learned about this problem directly from talking to Filipinos, and OFW's was when I was conducting a financial literacy and entrepreneurship seminar. I had been holding these seminars in Hong Kong, Bangkok, Manila and Baguio, and in the United States where there was heavy OFW's working in the region.
The same horror stories had been told to me in other places as well — from OFW's in Hong Kong, Seoul, Riyadh, in Dubai; and even those who were working as merchant marines.
So how can OFW's get out of debt, start saving money, and make money, too? If you’re one of the many OFW's plagued by debt and needless spending, then you'll find some practical tips below that can help get out of debt, and start building a wealthy retirment fund for your later years.
Accept the fact that a lot will change.
If you want to change your debt situation, then you have to change the way you spend your money. Instead of "spending" your money on useless baubles to impress your friends, start investing your money for long term growth. Talk to your banker in the Philippines, or an investment counsellor, or financial adviser, and start putting some of your paycheck into a growth fund that will earn you interest.
The key here is to START DOING THINGS DIFFERENTLY than how you've been doing things in the past. This means changing how you spend money and how you live your life.
Get it into your mind to accept the challenge that’s ahead of you, and do whatever it takes to get out of debt. It might be a difficult journey, or it could be easy. It all depends on how much debt you have, and to whom you owe the money. So, the first thing you need to do is CHANGER YOUR MINDSET. Change your thinking of poverty to one of financial wealth and security and how to acheive it.
If you feel that you need emotional and moral support, then seek out an OFW financial advocacy group. There’s a lot of them online, and you'll find a lot of them on Facebook, but there could also be one in or near your city.
Know exactly how much debt you have.
Calculate the total amount of your debts. This sounds stupid to a lot of people when they're asked this question, but most people don't know who or HOW MUCH they owe. Don't be one of them.
List all your debts on a piece of notebook paper and keep it in a safe place. List who you owe, how much you owe, the interest rate you’re paying, and the minimum amount you need to pay monthly for the debt.
If you know exactly how much money you owe, making a debt payment plan will be a lot easier for you.
Three Simple Rules For Getting Out of Debt:
STOP INCURRING MORE DEBT!!!
1. Stop using your credit cards.
2. Stop applying for personal loans.
3. Stop borrowing money from payday loans, loan sharks, and other OFWs.
The only reason why you should borrow money is if it’s a “life or death situation” — such as to pay for medical emergencies. Otherwise, if you need extra money... get a second job.
Sometimes, just following this rule is enough to get you out of debt. I’ve met OFWs who paid all their debts by simply doing this.
Manage your cashflow.
I know a lady in Baguio City who hides all her money in the bank. When her relatives and friends ask her for money, she tells them she doesn't have any. She doesn't carry any more than she needs for jeepney fare to town and back. If she needs money, she goes to the bank and gets some from the ATM. Otherwise, she just doesn't spend a lot of money... on junk, or anything.
1. Find ways to lower your expenses. Cut out all unneccessary and frivolous expenditures. If you have 2 or 3 pairs of shoes, you don't need to go to the SM Mall and get the latest Skechers. Don't go out to the local Chow King, Jolly Bee or Shakey's pizza to eat. Buy your groceries and cook at home.
2. Seek opportunities to increase your income. Educate yourself in financial literacy and start a part time job on the internet. (If you're reading this article on the internet, then you can do this!)
But among these two, focus first on controlling your spending because that’s easier to do. STOP SPENDING MONEY! Learn to INVEST in yourself. There is a difference between spending and investing.
Sometimes this requires telling your family in the Philippines that you’ll have to send less money. I know it won't be pleasing for them to hear, but maybe they need to go out and get a job, too... And if they're working, maybe they can go out and get a second job.
It helps to know exactly how much they need to live comfortably, so you can send only the necessary amount. Again, if family wants you to send extra money for unnecessary items, such as televisions, mobile devices, etc., tell them to go get a job.
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When it comes to earning more money, explore income opportunities that are immediately available to you in your area. Usual options are to take on a second job, to work extra hours, to do a sideline business, or to become an online freelancer. You can also earn money with a sideline business on the internet. If your computer skills are good, you can market your skills to others and make money.
To learn how to get started for a ONE TIME investment of only $18 USD (less than a thousand PHP), go to Four Corners Alliance Group and watch the video to see how you can build up your financial literacy, and earn up to $500 a day, or more.
Yes, I said "$500 per day". This is not a misprint, and it's NOT "too good to be true." Watch the video and it will explain how it all works. (To watch a presentation of the compensation plan, click here and click the play button on the video.)
Next, Learn to Say “No” to people who ask you for a loan.
Be prudent when lending money to relatives, friends, and other OFWs. Imagine and assume that they won’t ever pay you back. If this worst case scenario is not okay with you or it will affect your finances drastically, then just say “No.”
Moreover, say “No” to your family who’s asking you to buy unnecessary stuff or pay for something unimportant. Say “No” to buying that iPhone or flat screen TV; and say “No” to spending for the town fiesta or the family reunion.
It will be painful to deny your loved ones of something they want. But working abroad for several more years because you can’t get out of debt will be more painful — both for you and your loved ones. So sacrifice now, and avoid more pain later.
Snowball your debt payments.
The most effective strategy to pay off your debts is "snowballing" your debts. Snowballing simply means that you take a bunch of your smaller debts, roll them into one lump sum, and pay them off to get them out of your way. Then you can start taking your larger debts and "nibbling" them down with a payment plan.
I did this several years ago to nibble down my credit card debts until I got them all paid off. It took me about a year to do it, but it takes dedication to follow through each month. I know a lot of people who were successful in using this method, and you can be, too, if you make a determination to do it.
Stay away from get-rich-quick schemes.
Last, but least, stay away from HYIP's (High Yield Investment Plans) and pyramid schemes. Avoid getting scammed by dubious groups and companies offering a way to earn easy money. If a business opportunity or an investment is promising you guaranteed profits — turn back and run away. There are no "guarantees" of anything if you don't do the work.
Search online and read about OFW success stories and you’ll see that most of them, if not all of them, became wealthy and was able to come back home because they worked hard, saved their money, and started a business.
If becoming an entrepreneur was the key to success for many OFWs, then there’s no reason why you can’t do it too. Manage your cashflow, pay off your debts, and build your wealth the right way — slowly but surely.
LEARN HOW TO START A BUSINESS WITH THE PROPER FINANCIAL LITERACY AND EDUCATION
Getting started now will allow you to be out of debt within the next 30 days if you follow the 4x4 plan. Each 4 teach 4.
If you would like to know more, sign up at Four Corners Alliance Group then send me a connect request on Skype to ernestodell and I will personally train you.
Go here now: ==>> Four Corners Alliance Group
As soon as you gain access to the back office, contact me on Skype at ernestodell so that I can start training you.
