OFWs taught to cope with ‘unexpected events’

By George Manalansan

What are the “unexpected events” that could wipe out one’s life savings and throw all well-conceived plans in disarray?

This was the theme of a free financial literacy workshop conducted by the Center for Agriculture and Rural Development Hong Kong Foundation at Bayanihan Centre in Kennedy Town on Feb. 25.

The trainer at the workshop told participants that there are times in one’s life  when a drastic turn of events could lead to what is called a “savings killer,” or one that drains a person’s life’s savings, and could even lead to a debt trap.

These include life-changing events as accidents, illnesses, natural calamities and the tragic loss of loved ones.

To illustrate, participants were asked to share their own story about these events.

Elsie Sales tearfully recalled her husband’s death three months ago that caused her anxiety and significant stress. What’s more, she lost all her life savings, so she had to start saving all over again. From attending financial literacy workshops she learned that she should have secured her family by taking out an insurance so she would not have suffered financially.

Another life-altering event is one that results from changes in market condition, including inflation and currency fluctuations. To guard against this, the trainer said one should take heed of some inflation tips like setting aside a buffer in the monthly budget. This budget should be updated regularly in anticipation of future price increases.

One must also be wary of currency fluctuations so they could always get the best exchange rate for their dollars.

To hedge against climate changes, one who plans to buy a lot or farm should ensure that it is flood-free.

Jenny Lara shared the story of a farmer in a town near where she lives who took out a loan to plant tobaccos. The crop went well but a few days before it was due to be harvested, a typhoon struck and all the tobacco was lost. The farmer got so depressed because of the huge debt he had incurred, that he committed suicide.

Seminar participants and trainors celebrate completion of their course.

To protect themselves from such devastating events, the participants were told that they should have an emergency fund which ideally, should have three to six months’ worth of household expenses, and can be withdrawn easily, as in a savings deposit.

This fund can serve as a stress reducer, a buffer in case of a job loss, or as a reserve for family health emergencies, household repairs and an alternative to taking out an emergency loan.

It would also help to have an insurance to protect one from a huge financial blow. But when shopping for insurance the trainer said one must evaluate their needs well, like do they need health or accident insurance?

At the end of the workshop, Alex Aquino, vice chairman of the foundation, made an assessment of the whole-day event, with the aim of evaluating and improving the training modules, and the trainers as well.

The next free fin-lit seminar is on Mar. 25. For registration, call 9529 6392/ 5423 8196/ 9606 6810