The most common sin every seafarer faces during their vacation is debt. The fear of having not enough money to last until our next contract haunts us and would ultimately bury us slowly to debt. And even though this is rampant, it’s quite surprising why some seafarers are always caught into it every vacation. Is it because of the “bahala na mentality” or are we just complacent with the one day millionaire lifestyle that we have.
If you are one of those seafarers who wants to change their life when it comes to debt, keep on reading on. You might learn a lesson or two.
Incurring debt is a recurring pattern for seafarers. To avoid them, we must break that pattern and create something new that will steer us away from debt.
First thing you can do is to look into your salary. Mind you, your income is much more than average compared to those working in our country. Recognize this fact.
People always advice us that in order to avoid debt, we must spend less than what we’re earning. But the question is HOW? Especially when you expect a three- month vacation but you ended up at four months with three growing kids and your wife without having any job, how can you avoid going into debt?
In this kind of situation, most likely you will end up getting debts. Accept this fact and move on. But don’t let this reality slip by without doing anything. Since you have accumulated experiences with money problems, use it as a guide to steer away from that problem.
Second is to look into your expenses. You have bills to pay everyday and every month. It could be your children’s tuition fee, house mortgage, food, utilities or car loans. Whatever it is, write it down including your jeepney fares and tips to the restaurants. Track all your expenses so you will know which cost drains the bigger part of your income.
Now that you know how much money you’re coming in and going out, it’s time for you to create a budget. This is where you plan on spending your money.
If you plan on having a three month vacation, you have to save a budget three times your monthly spending.
For example, if your family’s monthly spending is PHP 10,000.00 (includes kids allowances, power and water bills, phone bills, food, internet, etc..), then you should save PHP 30,000.00 for your three month vacation.
To create a safety net, double that amount to PHP 60,000.00. Who knows how much longer your vacation will take. Your vessel assignment might go into inconvenient ports. That extra PHP 30,000.00 is like your emergency fund.
What about your training, travelling allowances, vacations, kids’ tuition fees, fiestas and other celebrations? Then you must also take that into account. Create a separate budget for that so you won’t have nightmares worrying and burying yourself into debt again when those times come.
But what if for some reasons, your contract today won’t allow you to create that budget? Then you must live frugally first- spending on what is really necessary for yourself and your family. You may also consider having a short vacation. You even have to avoid taking your families out to frequent vacations or buying your children that expensive smartphones. Don’t worry. You won’t be doing this forever. Just a certain amount of time for you to build a financial safety net.
After those sacrifices, build yourself that budget. Then you can slowly upgrade your spending to match the lifestyle that you want. That is of course, without compromising your budget.
Debts don’t just happen overnight. They are a collective decisions of small negligence done in months or even years before. To avoid it, you must be financially conscious and disciplined on following your plan of action.
May the winds be on your favor.