Oran Hall | Making the most of family support from abroad

Remittances serve as a critical lifeline for many households in Jamaica with the majority allocated to day-to-day needs and the rest to investments. To maximise these benefits, Jamaicans can adopt several strategies to enhance value and long-term impact.

For many households, notably low-income and female-headed families, these funds act as a critical safety net, supplementing irregular or insufficient earnings, as well as

income-replacement during unemployment or during economic downturns. Thus, they help households to maintain consumption levels. Some common uses of remittance funds are basic household expenses, such as food, utilities, and health care, education costs, housing and home-improvement, special occasions and emergencies, health care, and productive investments.

Apart from day-to-day education expenses, households use remittances for back-to-school spending, as is evidenced by the spike in late August and September to cover school fees, uniforms, and supplies. Families also allocate funds for vocational training and tertiary education to improve future earning potential.

Housing and home improvement also benefit from the remittances used to finance housing construction, land purchase, and renovation of houses. This is particularly true for the rural areas. Additionally, some recipients invest in property to generate passive income.

Remittances are also used to fund special occasions, as can be seen from the surge in inflows before Christmas for gifts and festivities, but remittances also serve as insurance during shocks like hurricanes or health emergencies.

On the production side, remittances are also used to start or expand micro business enterprises, for example, farming and retail businesses. Beyond this, some recipients are able to channel funds into savings instruments at financial institutions, thereby fostering financial inclusion and economic resilience.

Even with the positives, there are some negatives. One is that the heavy consumption focus on remittances might limit their broader economic impact. The improved financial stability of some recipients might lead to dependency so that they might leave the labour force, reduce work hours, or be less-urgent in seeking employment.

People can still make the most of the remittances they receive from family members in the diaspora, mainly the United States of America, the United Kingdom. Canada and Cayman. I recommend the following: plan and track remittance usage, save and invest a portion of the remitted funds, plan transfers strategically, and become financially literate.

The best way to plan and track remittance usage is to budget remittance income. Treat remittances as a part of the household budget. Allocate funds for essential needs, savings and investments, not just for consumption, although this could be challenging for some households. Track transactions by using services that provide receipts, ensuring transparency and resolving any issues that might arise.

Save and invest remittance funds in the following ways. Open bank or credit union accounts. Keeping funds in secure financial institutions encourages saving, gives peace of mind, and opens the way to additional financial services such as loans for productive purposes like education and business. Invest in education and small businesses, which can create long-term economic benefits and job opportunities. Remittances may also be invested in productive investments like agriculture retail and craft.

Become financially literate. Listen to and watch financial programmes in the media. Read about financial matters in the printed media and on the internet, but pay attention to the sources. Attend seminars and workshops where possible, and seek out and attend relevant financial courses. Some financial institutions also offer financial literacy programmes.

Even if they focus heavily on their products and services, there is usually useful general information. Then share what you know. Be useful to others who may need help by volunteering to share knowledge.

Remittances get into the hands of people from every segment of the Jamaican society, so there are variations in their usage and what they mean to the recipients. Remittances also reach every geographical region of the country – the Kingston Metropolitan Area, other towns, and rural Jamaica. There are also differences in the frequency with which the recipients receive them, the amount the recipients receive, and the relationship between how much the beneficiaries receive, how much it costs them to live, and how easily they can access the funds.

Ultimately, people who receive remittances have a responsibility to the senders, many working very hard and making sacrifices to be able to send the money, themselves, and their dependants to manage the funds well. Remittances can be a game-changer for good. The focus should not merely be to satisfy day-to-day needs, but to bring sustainable long-term benefits.

Oran A. Hall, author of Understanding Investments and principal author of The Handbook of Personal Financial Planning, offers personal financial planning advice and counsel.finviser.jm@gmail.com