Behind every Dollar, Pound, Dirham, or Euro sent by individuals, to individuals, across borders lies two basic reasons: i) Love and ii) Responsibility. This is obvious. Many expats have family and friends back home who rely on them financially. They send money to them out of love. Other expats fulfil their responsibility by sending money to honour a commitment, settle a due or pay a bill. What is not so obvious however is that depending on which social strata you belong to, the reasons for sending money vary significantly. And this difference is remarkably similar across geographies based on a survey we carried among expats from Australia to Canada.
Sara is a well-paid lawyer in London. She came to the UK for her undergraduate studies and belongs to an upper middle-class family in Pakistan. She leads a busy work life. When she remits money to Pakistan, it is usually for the following reasons:
1) To supplement her family’s income: Her parents live comfortably with their pension income, but Sara’s contribution ensures her parents do not feel a dent in their lifestyle because of rising inflation.
2) Major purchase or investment: Her family wants to buy a new car. Sara will send money to ensure her family can make the purchase they have been meaning to for years.
3) A significant expense: Sara’s uncle has a major illness. She will send money because the lack of medical insurance in developing economies means treatments are paid for in cash.
4) Gift for her father on his birthday.
5) Charity: She thinks charities in Pakistan are more deserving of her contribution and sends them money every 6 months.
Juan works as a janitor in an office and as a waiter in a restaurant in New York. Life is tough for Juan. He works long hours but at least he is happy in the thought that his family back in the Philippines have a house, they eat 3 meals a day, and his kids get decent education. Juan sends money because:
1) Survival: He knows his family’s survival depends on it.
2) Living expenses: Whatever Juan sends is used every day by his family.
3) Medical & Education fees: Juan makes sure that he sends enough for his kids to go to a good school and his family can pay any small medical bills.
4) Saving: He wants to send extra money in the coming years so he can save to build his own small house.
Sara and Juan are not exceptions. Their reasons to remit resonate with millions who live away from their home countries. They live completely different lives. Yet what is same is that they both send money to their families. How they do it, why they do it and why they want contemporary methods to change, I will explain next week.