OFW families should always think of the day remittances will stop coming--Suze Orman

MANILA, Philippines -- Families of overseas Filipino workers must always prepare for the day that remittances from their loved ones would stop coming so they can better manage their finances, international personal finance advisor Suze Orman said.

Orman, who hosts her own show on CNBC and is a favorite resource person at Oprah, said that families who are dependent on remittances must always think that the money will not flow forever because their loved ones can lose their jobs abroad, can get sick, if not die.

“Anything can happen at any time and the problem that is going on out there [abroad] when one person from over there stops sending money in here, you’ve not only affected one person there but also four, five or six people over here. Then that starts the very dangerous possibility of things going wrong,” Orman said during a briefing on Monday hosted by the Bank of the Philippine Islands.

OFW-dependent families have to understand where that money comes from in order for them to get motivated to fix their household finances, she added.

The Philippines’ economy is kept afloat by consumer spending that is primarily fueled by OFW remittances. Last year, overseas workers sent $20.1 billion back home, making it the biggest amount remitted to date. According to a survey conducted by Citibank in 2007, however, only one of 10 Filipinos save and that their savings will only last families nine weeks in case the breadwinner stops earning.

Orman said OFW dependents must change their expectation that the funds they receive every month are going to be there always.

“And once we understand it is possible that check would stop [coming], you would think twice before you go out and buy a flat screen TV or you do things other than saving that money,” the financial advisor said.

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