If you have ever been in debt, you know how stressful it can be. It can give you sleepless nights and drain whatever income you have. For Africans working in the Middle East, the burden of debt can demoralize and depress you, especially if your salary does not meet all your needs. 

While the goal of becoming debt-free is admirable, the journey requires careful planning and awareness of common pitfalls that could derail progress. If you are a migrant worker focused on repaying debt, here are some key mistakes to avoid in your search for financial freedom and stability.

Debt-free strategies for returning migrants

1. Don’t Send All Your Income Home

Many migrants face immense pressure to send most of their earnings to their families back home. While supporting loved ones is important, prioritizing debt repayment is equally crucial. Failing to do so could result in financial stagnation, prolonging the debt burden.

What to Do Instead

Communicate openly with your family about your financial priorities. Allocate a specific percentage of your income to the repayment of debt, and another for savings, and then determine how much you can remit sustainably.

2. Avoid Overextending Yourself with Commitments

Thanks to Black tax, most migrants are the financial providers for their extended families and communities. Because of this, most of us over-promise and take on responsibilities that conflict with personal financial goals. Overextending yourself can result in new debt while trying to pay off old ones.

What to Do Instead

Set boundaries early. Politely but firmly explain to family and friends that you’re focused on becoming debt-free and building a sustainable future. Share your goals to help them understand your decisions.

3. Don’t Overlook Hidden Fees or Exchange Rates

When sending money to pay off debts in Kenya, many migrants unknowingly lose a significant portion of their payments to transaction fees or unfavourable exchange rates. This adds unnecessary costs and delays repayment.

What to Do Instead

Research cost-effective money transfer services and compare their fees and exchange rates. Platforms like mobile money or fintech apps often offer better rates than traditional banks. Use these savings to pay down your debt faster.

4. Don’t Neglect Local Debts While Abroad

If you have outstanding debts back home, it's easy to lose track of them while working abroad. Unfortunately, debtors don't take a break, so interest and penalties will continue to accumulate, turning manageable debt into a financial headache.

What to Do Instead

Stay on top of local debts by scheduling regular payments, even small ones. Apps and online banking make it easier to manage payments remotely. Keeping communication open with lenders can also help if you need flexibility.

5. Don’t Funnel Everything into Debt Without a Safety Net

Quickly paying off debt is admirable, but putting every shilling into repayment can leave you vulnerable to emergencies. A medical issue or job loss could force you to take on more debt to cope.

What to Do Instead

Build an emergency fund alongside debt repayment. Aim to save at least 2-3 months’ worth of expenses in a separate account that you only use for unexpected costs.

6. Avoid Investment Scams

Always remember,  "too good to be true....it probably is not". Fake investment schemes promise high returns. These schemes often prey on individuals looking to maximize their earnings quickly, leaving them in a worse financial position.

What to Do Instead

Stick to investments that are well-researched and reputable. Avoid opportunities that promise instant wealth. When in doubt, consult with a financial advisor or a trusted community member.

7. Seek Help Early

Debt can feel overwhelming, especially when juggling responsibilities abroad and back home. Many migrants delay seeking help, which can make the situation worse. 

Reach out to financial counsellors, community organizations, or trusted mentors who understand the unique challenges of migrant workers. Seeking advice early can help you create a clear, actionable plan for becoming debt-free.

Debt repayment is a marathon, not a sprint.

As a migrant worker, you face unique challenges, but with careful planning and smart financial decisions, you can achieve your goal of becoming debt-free. Avoiding these common mistakes will help you take control of your finances and build a stable foundation for your future.

Remember, financial freedom isn’t just about repaying debt; it’s about creating habits and systems that keep you debt-free long after the last payment is made. 

Follow us at Fulus Africa for more insights, tips, and support as you navigate your financial journey!