Building a financial plan for labor exporters

With savings of 30 million per month, experts advise labor exporters to still find ways to increase income, manage debt and learn about financial investments.

I am working abroad in Korea. I save an average of 30 million VND per month. Up until now, I have never planned or had any thoughts about developing my personal finances. What should I do now?

Phamcongtuyen97

Transaction at a bank in Ho Chi Minh City. Photo: Thanh Tung — Transaction at a bank in Ho Chi Minh City. Photo: *Thanh Tung*

Consultant:

It is good that you have accumulated some savings from your labor export job in Korea, it is even better when you have a sense of saving and a desire to develop your personal finances. Below are some of my suggestions for you to consider and apply to your personal financial development plan.

Build financial goals and plans

Start by defining your specific financial goals, which is the first step. These goals could be buying a house, buying a car, investing to grow your assets, or even building a retirement plan. Then, create a specific savings and investment plan based on your goals. When investing, consider opportunities that fit your financial situation and the level of risk you can accept.

Creating financial goals and plans helps you gain control over your income, spending, and financial decisions. It can be thought of as a specific action guide of what you want to achieve and how you will achieve it. Creating financial goals and plans not only helps you achieve short-term goals but also creates a foundation for a solid, sustainable, and financially secure future.

Learn about investing and personal finance

This is an important part of each person's personal financial development process. This not only brings profits from investment opportunities, but also helps protect assets from risks and negative impacts from the financial market. By understanding the knowledge related to personal financial management, you will have knowledge about investment tools such as stocks, investment funds, real estate... From here, you can create a stable source of income and increase assets, have the opportunity to optimize debt management and shape your own financial goals.

In addition, learning about finance also helps you manage your spending wisely, create passive income and manage risks effectively. This not only helps build a solid financial foundation but also creates new opportunities, shapes each individual's career and financial future, the key to a stable and comfortable financial life. I recommend that you read books, follow specialized blogs or take courses to improve your knowledge.

Debt Management

By keeping your debt at a manageable level and not creating unnecessary stress, you will maintain your financial health. Review and identify all your debts, this includes knowing the interest rates, payment terms and other terms involved.

Next, you prioritize paying off debts with high interest rates, which is considered a smart strategy. Deciding to pay off debt first helps reduce the total interest costs and quickly ease the financial burden. In addition, if possible, paying off debt early also helps reduce financial pressure and save a lot of interest costs. Remember, an unstable financial situation due to debt can create stress and psychological pressure.

Increase income

You are saving 30 million VND from your labor export job in Korea, which can be considered your main job at the moment. Although 30 million is a relatively good savings level, we should also consider increasing your income. This will help you diversify your income sources and reduce risks to your personal financial situation. In case one source of income is in trouble, other sources will still help you maintain financial stability. At the same time, a higher income opens up greater opportunities for saving and investing, helping you achieve larger financial goals such as buying a house, investing or saving for your children's education, and preparing for retirement.

Income will be divided into two types, active and passive income. Active income is the income you have from work that you spend your own resources such as health and time to create. To increase this income, you can learn and develop skills to be able to take on higher-paying jobs or look for new opportunities with higher income.

As for passive income, this is the income you receive without having to directly participate in daily labor activities. This can include income sources such as interest, dividends, rent, or capital gains. To increase this income, you should consider taking courses on investing and financial management before participating.

Build a reserve fund and insurance

These are two important factors in personal financial management, especially in the context of unexpected or difficult financial situations. An emergency fund acts as a financial safety net, protecting us from unexpected events such as job loss, unexpected medical expenses or sudden difficulties. Building an emergency fund helps maintain financial stability and avoid having to use reserve funds from high-interest loans.

Insurance also plays an important role in protecting personal assets and health. In particular, health insurance helps reduce financial pressure when faced with sudden medical expenses. Life insurance provides financial peace of mind for the family when the insured person loses the ability to work. Home insurance helps protect large assets such as houses from risks such as fire, natural disasters or loss due to theft. Therefore, you should consider buying insurance to prevent major risks in life.

Finally, remember that every personal financial plan needs to be flexible and adaptable over time. Set specific goals and work hard to achieve them.

Nguyen Thi Thu Huong
Personal Financial Planning Expert at
FIDT Investment Consulting and Asset Management Company