How far will your $131 wage hike go?
THE Hong Kong government announced the increase of minimum allowable wage and food allowance for foreign domestic workers last week. From $4,110 per month, all new contracts from the 30th of September 2015 will be set at $4,210, and food allowance will have to be least $995, up by $31, from $964 originally.
There are mixed reactions from different groups and individuals linked to the total increase of $131. Sentiments from migrants are all over social media, saying that the amount is not enough to cover daily living and personal expenses.
Looking on the brighter side, on the other hand, such amount is an additional sum of money that could also be saved or invested for future use.
If you are to spend it: the $131 can afford three to four standard meal set from a regular restaurant (depending on where you will eat,) or more or less four cups of coffee from either Starbucks or Pacific Coffee (depending on the size.) It can also be the six weeks cable charge you will have to pay to the remittance company if you send money on a weekly basis, or the monthly service fee for a post- paid mobile phone subscription. It can also be a regular donation to your church or charitable cause you are passionate about.
If you are to save it: it could be an amount you can forget you receive and automatically transfer it to a savings account, which could total $3,144 in two years. Thus, upon completion of your new contract, you have extra cash!
If you are really willing and ready to forget the amount and invest it for a longer term, your $131 per month could be $9,102.64 in five years, if put it into an investment instrument with a 6 percent/year return or interest. It could even increase if the investment instrument could yield an even higher interest in the long run.
It really depends on how you will look at the increase you will receive, your monthly salary as well as other income you intend to earn. You can spend, donate, save or invest it.
If you want to know more on how to extend the money you earn to make room and budget for special projects, finance your goals, or look for ideas on how to grow it, Enrich offers financial education programmes that could help you think about these things in a fun and non-intimidating way. For information about our training schedules and workshops, visit www.enrichhk.org.