Prioritize Savings Over Paying Off Loans
<p><span style="font-weight: 400;">For migrant workers, <a href="https://blog.trueprofile.io/tips-managing-ofw-money/" target="_blank" rel="noreferrer noopener">getting into debt</a> 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. </span></p> <p><span style="font-weight: 400;">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&#8217;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.</span></p> <h2><span style="font-weight: 400;">Loans are not the devil</span></h2> <p><span style="font-weight: 400;">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.</span></p> <figure class="wp-block-image alignnone size-large wp-image-5104 size-full"><img loading="lazy" width="848" height="566" src="https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/Fotolia_206085600_S.jpg" alt="Prioritize Savings Over Paying Off Loans" class="wp-image-9699" title="Prioritize Savings Over Paying Off Loans" srcset="https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/Fotolia_206085600_S.jpg 848w, https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/Fotolia_206085600_S-300x200.jpg 300w, https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/Fotolia_206085600_S-768x513.jpg 768w" sizes="(max-width: 848px) 100vw, 848px" /><figcaption>Allocate a portion of your salary towards paying debt AND setting aside a savings fund.</figcaption></figure> <h2><span style="font-weight: 400;">Options are suddenly plentiful</span></h2> <p><span style="font-weight: 400;">You can now buy bulk groceries on the cheap.&nbsp;</span><span style="font-weight: 400;">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.</span></p> <p><span style="font-weight: 400;">You can now afford to buy health insurance for your family.&nbsp;</span><span style="font-weight: 400;">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.</span></p> <div class="wp-block-image size-medium wp-image-5105"><figure class="alignleft size-large"><img loading="lazy" width="1024" height="682" src="https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/pexels-photo-214574-1024x682.jpg" alt="Prioritize Savings Over Paying Off Loans" class="wp-image-9700" title="Prioritize Savings Over Paying Off Loans" srcset="https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/pexels-photo-214574-1024x682.jpg 1024w, https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/pexels-photo-214574-300x200.jpg 300w, https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/pexels-photo-214574-768x512.jpg 768w, https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/pexels-photo-214574-1200x800.jpg 1200w, https://production-prod-trueprofile-blogassets-origin.s3.ap-southeast-1.amazonaws.com/uploads/2021/03/pexels-photo-214574.jpg 1280w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Knowing you have a savings fund is liberating.</figcaption></figure></div> <p><span style="font-weight: 400;">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.</span></p> <h2><span style="font-weight: 400;">Having extra money frees you up</span></h2> <p><span style="font-weight: 400;">A redditor (means a reddit user/commenter) once commented on </span><a href="https://www.reddit.com/r/povertyfinance/comments/8lot0w/being_broke_really_effects_my_decision_making/" target="_blank" rel="noreferrer noopener"><span style="font-weight: 400;">r/povertyfinance</span></a><span style="font-weight: 400;"> 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. </span></p>