For migrant workers, getting into debt is par for the course. Many people would pawn their ancestral lands, sell off their houses, and pool their families’ money just to fund their venture abroad. Since getting a job abroad means earning thousands of dollars, getting loans is akin to investing in your future.
A lot of people would cringe in horror at the thought of getting into debt. A lot more would flinch like there’s chalk dragging on the board if you say build your savings fund first before paying off any loans once you’re abroad. Hear me out. We’re not advocating not paying anything towards your debt. You can pay a portion of your salary, but also build up your savings funds. There are a lot of things that would open up for you once you have that money in your pocket.
Loans are not the devil
If you have a loan, it does not mean that the bank (or a friend) will suddenly ask you for the money tomorrow. It means that you have an obligation to pay the loan over time. Time is what a loan buys you. And this is time that you can use to save up. Time that you have to buy yourself peace of mind that you are shoring up money for an emergency.
Options are suddenly plentiful
You can now buy bulk groceries on the cheap. If you have been raised up in poverty like my friend Mike, you probably recall only being able to buy groceries on the cheap. Of having to buy only the most necessary goods. When you have built up a comfortable balance in the bank, you will suddenly have the option to buy 3 for the price of 2. If you were still counting pennies, you would not have had this type of savings. You would have only had the option to buy one for the full price.
You can now afford to buy health insurance for your family. When you’re abroad, health insurance is usually borne by your company. We’re talking about health insurance for your family. Getting health insurance is way cheaper than paying for hospital bills.
It’s also a bit like buying peace of mind, since you are not physically present, you can at least take care of them through this.
Having extra money frees you up
A redditor (means a reddit user/commenter) once commented on r/povertyfinance how freeing it is to know that you have money in the bank. You can make choices that were not available to you back when you didn’t have a dime on you. Plus, knowing that you have a fallback means you will make better decisions.