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Oh FWS ask what currency should I save it we live in a wonderful time where Filipinos are not just training in vessel but in different currencies around the world there are families where the wife is earning Canadian dollars while the husband is earning yen then they spend yen for their day-to-day expenses because they live in Japan while still sending money to the Philippines for their parents we now live in a very interconnected economy and this has made many OFW San Filipinos already residing outside the Philippines to ask what currency should I save in and in this episode you'll learn of two practical guidelines to follow in answering this question with that said let's begin the first guideline is save in the currency you'll most likely spend in the first step - following this principle is to ask yourself what's the future purpose of these savings is it for my emergency fund is it for retirement is it for the kids tuition you have to define it first to get an answer on what currency you'll spend here's an example let's say you're earning saudi riyals you're living there but your family is in the philippines so they are spending in peso what currency should you save in well if you're saving for the emergency fund for your family in the Philippines then you save that amount in peso but if you're saving for your personal emergency fund in Saudi then you keep the money as Saudi Riyals and if it's for the kids tuition well where do you plan on sending them to school later if the answer is in Saudi then keep the money and reals but if it's in the Philippines then keep it in vessel now if you're not sure what currency you'll spend it in but the money is there say for example retirement you're not yet decided whether you want to live in the Philippines or if you want to stay and become a permanent resident where you're currently working well what's the currency you'll most likely spend in sure you may not be 100% decided yet but if you had to decide now what would you pick whatever that is then save in that currency again the principle is in the currency you'll most likely spending now here comes a common question but what about the exchange rates here's how we suggest you think about it first is that the exchange rates are something that no one single government has control over because we live in a global economy for instance something that happens in Thailand can also affect the US dollar to the Philippine conversion rate all currencies are interconnected no one can predict a hundred percent on whether the exchange rates will go up or down so there is always a currency risk and for that the second guideline is to negate currency by diversifying through time I know that was a lot but here's what that means every month you send a fixed amount regardless of the exchange rate and whatever savings or additional expense you incurred you set it aside as a buffer for currency risk so for example you send thirty thousand pesos a month to the Philippines and you're earning in dollars and let's say the exchange rate is for it eight pesos to one dollar so you'll need six hundred twenty-five dollars but the following month month to the exchange rate rose to fifty one pesos is to one dollar meaning you'll only need five hundred eighty nine dollars so hey you saved thirty-six dollars now this thirty-six dollars don't use it for shopping instead set it aside so that when currency rates change again you have a buffer now let's say the following month month three it's suddenly dropped to 46 pesos to $1 which means you need six hundred and fifty-two dollars which is 27 more on top of your budget where do you get it from from last month's savings when you do this over a period of several months two years you'll be able to reduce your currency risks by diversifying through time whether the rates are up or down now these two guidelines you learned number one save in the currency you'll spend and number two to diversify currency through time they have an exception saving in the currency you'll spend and diversify through time are only recommended for the regular average OFWs who send and save money every month as part of their monthly routines but if you're dealing with bigger amounts that range in the hundreds of thousands of pesos to millions then you have to start looking at currency as an investment already meaning you've got to think like an investor and these two guidelines aren't enough we have to follow the more important rule of investing which is to follow your knowledge for example if you're living in the US but you're more knowledgeable with investing in the Philippine stock market then you should keep investing in the Philippines even if you plan on retiring in the u.s. follow your knowledge because the biggest risk in investing is investing in things you have no clue about but of course a smarter move would be to study the US market even if it's new to you because that way you don't have to deal with exchange rates anymore reducing your currency risk or an equally good move would be to study on how to analyze foreign exchange and currency movements so that you can make informed decisions on when to switch currencies now we won't talk anymore about Forex and currency movements because this is such a huge topic but if you're learning more about it we'll make sure to give you a reference at the end of the video now let's do a quick recap so OFW is what currency you should be saving guideline number one is to save in the currency you'll most likely spend and if you're worried about the exchange rate we have guideline number two negate the currency risk by diversifying through time while these guidelines are practical and easy to follow it is best applied only when dealing with smaller amounts of money if you have bigger investment sessions involving millions of pesos and beyond these guidelines aren't enough and expanding your knowledge of the other markets foreign exchange and currency movements they become a requirement so that you can invest intelligently and that's it for our episode on what currency should I save in I hope this episode help you think better when dealing with currencies hey are you a fan of Benoa money Academy like have you watched more than five of our posts here and you're getting so much value here and you think that our training is top-notch well you might be wondering why are we teaching all of this for free even if there's so much value in the training well here's the answer it's because what you're learning here for free is actually just five just 5% of the value compared to when you enroll into our premium programs like winning the game of wealth this means that your financial progress can be accelerated made faster when you have a step-by-step and structured program to follow bringing you closer to financial security financial freedom and financial abundance so if you're not yet an owner of the winning the game of wealth program please check out Binoy money academy.com slash win the game because it's you know the values we have here they're great they're shareable they have value bombs but at the end of the day it's not a structured program that will radically transform your life towards financial freedom and abundance so if you're not yet an owner of the winning the game of wealth program then please go to Pinoy Money academy.com / win the game and see how it can help you have a better financial life hope to see you there