How OFWs Can Build an Emergency Fund

Aside from having access to great Pinoy loan deals, OFWs need to have an emergency fund for themselves and their loved ones at home. By having money set aside for emergency purposes, you’ll be able to avoid getting yourself into massive debt as well as have a financial buffer that can sustain you in times of need. But how exactly can you build an emergency fund while working abroad? Read on below to find out.

Check Your Cash Flow

The first thing you need to do is check the amount of money coming your way on a regular basis. Knowing your income will help you determine the amount you need to save for your emergency fund.

Set a Goal

Next you need to set a goal. Now you can always decide for yourself the exact amount your emergency fund would contain. But as a rule of thumb, it’s advisable that you set aside at least three to six months’ worth of your household living expenses. That way, you’ll have a safety net from unexpected expenses resulting from emergencies like unemployment, hospitalization, and natural calamities, among others.

Open an Account

Once you’ve set your goal, it’s time to open a bank account where you can safely store your emergency fund. Keep in mind that you need an account that’s easy to access and that can yield a decent return despite your fund’s liquidity.

But if you want to take a riskier but more ambitious approach, you can opt for higher interest savings account programs. These types of financial instruments have the potential to maximize your potential interest earnings. However, it will render your account inaccessible for a certain time-frame, which would defeat the purpose since emergency funds must be accessible anytime.

Start Building

As soon as your emergency fund account is good and ready to go, all that’s left is to start putting money in it. Cultivate a habit of setting aside a portion of your income (be it 10% or more) and depositing that amount in your account. Some would suggest that you have a large initial deposit, but you can always start small and work your way up from there. It is ideal to save at least 20% if possible based on your source and amount of income and expenses, of course.

Wrapping Up

Through developing the right habits and sheer discipline, as well as following the steps above to the letter, any global Pinoy would be able to build their emergency funds in no time. An emergency fund can help you weather any unexpected financial challenges in your life. So if you don’t have any emergency cash yet, now’s the time to think about building one.