How to Build a Strong Financial Found

Congratulations! You just got confirmation that your contract has been finalized and you will now get to work overseas! After months, even years of job search and interviewing, not to mention researching and planning, you finally got an offer lucrative enough to entice you to leave the Philippines for greener pastures.

Your and your family’s minds are now filled with visions of a better life. The future looks so much brighter.

Somehow, the sun is so much sunnier. You are full of optimism and magnanimity, saying yes to a parent’s request for new home appliances and agreeing to finance your sibling’s children’s school fees.

You can’t wait to leave the Philippines and get to work ASAP, earn them dollars, and start buying things you and your family have only dreamed of.

In the excitement of things, you forget one crucial thing: money is a finite resource.

Money does not grow on trees and if you fail to plan properly, you risk spending the rest of your working life abroad just to keep up with runaway expenses, or worse, go back home to the Philippines without anything to your name.

OFW investments

It doesn’t have to be that way.

Luckily, you’re here now. In this post, I outlined the things you should be doing to secure your future by laying down financial foundation while you are preparing to leave the Philippines to work abroad.


First things first: you need to temper your excitement with a strong dose of reality.

You need to have a clear picture of what your financial situation will be once you’re deployed, including how much you will be receiving each payday, your living expenses, and any fixed financial commitments back home and in your country of deployment.

At this stage, it is hard to come up with exact amounts but try your hardest to arrive at a reasonable estimate. These figures will serve as your basis for financial planning.

These will be the basis of how much money you can set aside for savings and investments, as well as disposable income for fun things like travel, gifts for loved ones, or helping extended family.

Calculate how much you'll receive every payday

Based on your contract, compute how much you will receive every payday. Depending on your country of deployment, you may have to consider into your calculations income taxes, mandatory contributions, and other deductions.

Include fixed bonuses and other benefits that you are entitled to such as holiday bonuses but take note when you will be receiving them.

Don’t include in your computations non-fixed income and bonuses such as overtime pay or commissions. For planning purposes, compute how much you will regularly receive so that you can fix your budget accordingly.

Estimate your living expenses

You need to find out how much you will be spending for living expenses. Try to get reasonable estimates by contacting people you know who work in the same country, Filipino coworkers, or by checking cost of living information online from websites like Numbeo.

Of course, while you want to reduce your living expenses, don’t use the lowest possible cost during this stage of financial assessment.

Even if you know someone who was able to subsist on rice and beans for their entire stay abroad, don’t budget for that same level, even if you do plan on just eating rice and beans during your entire stay overseas. Assume that you will be eating the same way, buying the same clothes, and engaging in the same hobbies as before.

This applies even if your housing and food expenses are shouldered by your employer. You should still budget for things that you commonly spend money on such as personal toiletries, gadgets, communication expenses, and entertainment, like your Netflix subscription.


Moving into a new country is stressful enough as it is without the added stress of just suddenly cutting off some minor luxuries from your life.

Sooner or later, you will break your tight budget, which may demoralize you. Extreme budgeting is not sustainable.

Financial commitments and payments

Many of those who decide to work abroad do so because of various commitments to loved ones. Some of these most common commitments include sending siblings to college, building dream homes for long-suffering parents, saving for the family’s future, and saving up to start a business.

This is your reason for leaving the comfort of your home country and the company of loved ones. 

Because you’re sacrificing so much, you should keep these commitments foremost in your mind and include them in your fixed expenses list. These are your non-negotiables that you need to set aside money for.

I have to clarify though that even if you prioritize these commitments, it does not mean that you give in to requests or lambing, indiscriminately.

You have to be able to differentiate between needs and wants. Again, money is finite and sooner or later, your contract will end and you need to go back home.

Aside from these fixed financial commitments to loved ones, you should also take note of fixed payments. For example, if you bought an insurance policy to protect your family in case of your untimely demise, you should include that in your budget.

This also include contributions to government programs that you want to take advantage of while abroad like Pag-Ibig MP2, Philhealth, or SSS.

The Talk

By now, you should be able to have a clearer picture of your financial situation abroad. You have a reasonable calculation of your monthly (or bi-monthly) income.

From that amount, subtract your living expenses and your fixed expenses. The difference will be your money for savings, investments, and disposable income.

This exercise will probably douse some sense into you and dampen your and your family’s newfound optimism.

Hopefully, writing down these numbers and doing these calculations will make the numbers more real for you and your family. You will realize that you still need to work hard for your money, even if said money is now in a different currency.

It’s better to face all these realities before you leave the country. This way, you know what you will be facing, how much you will be earning, and can make plans for the future instead of laboring under the delusion that you have a lot of money when in fact, you just don’t know how to do maths.

Take this time to talk to your spouse, parents, or whoever depends on you and be frank about what you can reasonably provide AFTER your fixed commitments to them.

Be sure to be clear about what you can and cannot afford.

You also have to be careful about making them understand the value of money. Based on my experience and observation, many people engage in magical thinking when it comes to money.

People most susceptible to this are those who have no experience handling (relatively) huge amounts. Because of their inexperience, their perception of the value of money is skewed.


After doing the hard work of confronting your financial reality once you work abroad, you need to start looking into ways on how to take advantage of programs the Philippine government has put into place to take care of OFWs.

These were designed to be financially accessible, allowing you to contribute to programs supporting OFWs and their families

I wrote an article about about 6 ways to maximize government benefits as a Pinoy expat. Please read that article for information on how to open accounts. But just to provide a short summary of that article, you can:


  • Secure your family’s health through PhilHealth;
  • Prepare for the worst with OWWA;
  • Fund your mid-term savings with Pag-IBIG MP2;
  • Invest for retirement through PERA;
  • Supplement your pension through SSS Flexi Fund; and
  • Educate your dependents with TESDA and OWWA


Here’s a helpful infographic that you can refer to for the benefits you should be maximizing:

6 ways inforgraphic


Prior to leaving the Philippines, make sure you do these steps to make sure that once the time comes when you are ready to invest, you hit the ground running.

Set up your online banking accounts

Find out which Philippine banks have branches in your country of destination. Open an account with this bank while you are still in the Philippines. If possible, take advantage of their special OFW offerings. There are banks who give extra benefits for OFW clients, such as Banco De Oro with its Kabayan Savings Account.

Once you have an account open, set up online banking for easy monitoring and fund transfers. Download your bank’s mobile app while you are still in the Philippines. In case you get locked out, you will have an easier time fixing access problems while still in the country.

However, with banks using two-step authentication on their mobile apps, this may mean that you have to keep your Philippine number and enable roaming just so you can make transactions using the bank’s mobile application.

Not only will opening an account with a Philippine bank with branches in your country of deployment make remittance easier and more cost-efficient, it will make funding your online brokerage account (to be discussed next) easier.

Open an online brokerage account

If you have any plans to invest in mutual funds or stocks in the future, you need to have an online brokerage account. Here’s the link to the list of online brokers accredited by the Philippine Stock Exchange.

Even if you don’t have the money yet, just open one. Just make sure to select a company that allows you to open an account without a required minimum balance.

So far, the only online brokerage I know where you can open an account without a minimum deposit is AB Capital Securities. I’m personally using this online brokerage and I’m satisfied with their desktop site, mobile app, and customer service.

OFW investments

Buy term insurance

This one is hard but bears serious consideration. It’s very important that you have insurance to protect people who depend on your income. This is in case you die or are handicapped before you earn and save anything.

At this point, look for the cheapest term insurance with the best coverage you can find. DO NOT BUY A VARIABLE UNIVERSAL LIFE (VUL) INSURANCE.

Term insurance provides coverage for a specific period of time or “term”. Compared to traditional and VUL insurance, coverage for term insurance is usually renewed annually or every five years. Agents will claim that you will be wasting money with term.

Once you start talking to agents, I guarantee that they will sell you a VUL right off the bat. They will try to convince you that an insurance-investment combo is a great idea.

I will not dive into this (dubious) claim but I urge you to buy term and invest the difference instead. Plus, one reason that agents push VUL so hard is that this is how they earn their huge commissions. No shade to agents who want to earn a living but for OFWs, VUL is not a great idea. So do not be swayed.

If you can’t afford to buy term insurance yet, make sure to buy coverage on your next visit home.

According to insurance agent friends I consulted, you can only buy coverage while you are in the Philippines. They no longer accept contracts signed and notarized in Philippine embassies and consulates abroad.


Working abroad is probably one of the biggest decisions you will make in your life. Make sure your sacrifices are well compensated. You should plan carefully and lay down your financial foundation even before you leave home by following these tips.

These are designed to give you a clear picture of what you can expect abroad in terms of cash flow. These will also equip you with the information you need to have an honest discussion about money with your dependents. Make sure you take advantage of all Philippine government programs for OFWs. These will save you a lot of money and heartache.

And lastly, these tips will get you ready to invest as soon as you are able. Your financial foundation would have already been set up for you. You can already start investing in Philippine stocks, mutual funds, and other investment instruments once you complete these steps.

I hope you find this useful. If you have other tips that you want to share to help expats in laying down their financial foundation, please feel free to write them in the comments.

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4 Responses

  1. HI Ms Katie, can you give a concrete example what made u say that term is better than vul? Did you look at all insurance companies to check if how much a person is paying goes to insurance payments and how much goes to investment? I believe it varies per insurance company. For example Prulife, on your first year of payment, 100% of your premium goes to insurance and 0 goes to investment. On 2nd and 3rd year of your premium payments, only 50% is allocated to investment. Don’t you recommend a stand alone health insurance? There are stand alone insurance in the market which allows you to get all the premiums you paid if in case you dont get sick. I am a forex broker. I just quit my job as AVP of JP MOrgan investment banking handling clients across Asia Pacific. I handle pensions funds, super annuation funds of Australia and New Zealand as well. I want to understand where you are coming from in terms of health and term insurance. Hope u can give me a very specific examples, comparing apples to apples the term and vul.

    1. Dear JR,

      I think VULs unnecessarily combine insurance and investment and has fees that are too high. It’s not the most efficient use of your money. Just buy term and invest the difference in a low-cost index fund or ETF. That way, you have insurance and investment that YOU control.

      Did you look at all insurance companies to check if how much a person is paying goes to insurance payments and how much goes to investment?

      I don’t have to look at ALL insurance companies to know that this is an inefficient use of money.

      Don’t you recommend a stand alone health insurance?

      Since this post is about OFWs, I recommend that they enroll in PhilHealth and take advantage of government coverage.

      Hope u can give me a very specific examples, comparing apples to apples the term and vul.

      Right now, I don’t plan on writing in-depth about VUL because 1. there are already a lot of posts comparing VULs and term insurance and 2. I don’t have the budget to hire a security detail from the inevitable fallout from insurance agents when I say, in detail, why VULs are not the most efficient use of people’s money.


      1. Wonderful information and great tact and handling of queries about looking at “ALL insurance companies” lol. I am learning so much from you. Thank you.

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