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Soaring living costs force diaspora to cut own budgets to save for home remittances

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By Nkosana Dlamini

An increase in cost of living in the US, UK and Australia has forced migrants to cut down on their own spending in the major economies to save on remittances they routinely send to their loved ones back home.

This was revealed in a recent study carried out by renowned digital remittances firm, WorldRemit in the three countries playing host to some of the world’s largest migrant populations, among them thousands of Zimbabweans.

The study was carried out to assess the impact of soaring cost of living in the countries and how this has affected the migrants’ own upkeep.

It has since turned out that a majority, now confronted with shrinking purses, has been forced to trim down on rentals, transport and other living expenses to remain with something to send to dependants back home.

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Reads a WorldRemit statement on the findings, “In a testament to their resilience, migrants around the world actively conserve daily spending in order to sustain their ability to send money home to support loved ones, reporting they eat out less (49%), save on day-to-day expenses (46%), limit social gatherings to save money (28%), and opt for public transportation rather than driving themselves (25%) since costs have begun to rise.”

There are growing fears the financial pressures now being increasingly felt by senders could see the scaling down on remittances.

But the fears have been allayed by WorldBank which still expects global remittance flows to increase by 4.2% throughout 2022 and reach US$630 billion.

“Migrants’ resilience and commitment to their loved ones back home has proven to be vital, especially in a period where household expenses are increasing around the world,” said Jorge Godinez Reyes, Head of the Americas, WorldRemit.

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“This latest study proves that even during times of financial instability, many migrants are making conscious adjustments to their daily lives to maintain the regular flow of remittances to families and loved ones back home.”

In conducting the study, WorldRemit connected with 1 000 international remittance senders in each country, of which 20% are 1st-generation migrants living in these countries, with the remaining notably born in either the US, UK or Australia.

According to the survey, since the beginning of the year, 78% of respondents agreed that their cost of living has increased, with the most impacted areas seen across utility costs (82%), transport (77%), daily living (84%), housing (64%) and healthcare expenses (54%).

It also emerged that inflation affected both senders and receivers of remittances around the world.

Globally, the main reason people cited they send money to loved ones overseas is for day-to-day expenses (ie. food, transportation, clothing), accounting for more than half of all money sent overseas (53%), followed by one-off expenses, like travel (40%).

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