Walk through almost any village in Nepal and you'll see houses built with money earned in Malaysia, Qatar, Saudi Arabia, the UAE, Korea or Japan. Remittance makes up around a quarter of the country's economy and keeps millions of families going.
But I also hear the same story again and again. Someone spends ten years working abroad in hard conditions, sends money home every month, and comes back to find very little saved. There's a house, maybe, but no savings, no income source, and sometimes still some debt.
It's rarely because anyone was careless. Usually there was just no plan that everyone agreed on. Money came in, needs came up, and it all went out.
This post is for families on both sides: the person working abroad, and the people managing the money at home.
Sit down together, even over a video call
The single most useful thing a remittance family can do is have one honest conversation about money. Not a fight, not blame. Just a plan.
Agree on:
- What are the fixed monthly costs? Food, rent if any, school fees, medicine, electricity, loan repayment.
- What big expenses are coming? A manpower loan to clear, a wedding, a child's admission, house repairs, land.
- How much gets saved each month, and where?
- What are the goals? What should the family have in place when the worker comes home for good?
- Who tracks it, and how often does everyone review it together?
Write it down. A shared Google Sheet or even a photo of a notebook page sent on WhatsApp works.
Plan around a conservative amount
Jobs abroad can end suddenly. Salaries get delayed. Overtime disappears. Companies close. Visas don't get renewed. Health problems force people home early.
Build the household budget on a lower, safer amount, not the best month. Say the worker usually sends Rs 60,000 but sometimes only Rs 40,000. Plan the household's regular spending around Rs 40,000.
In months when more comes in, send the extra straight to savings or loan repayment, not to new monthly commitments that are hard to undo, like a bigger rent, a new vehicle loan or expensive private school fees that can't be sustained.
Pay off the manpower loan first
Many workers start abroad with a loan to cover recruitment fees, tickets and other costs, often at high interest from moneylenders or cooperatives. Clearing it quickly is often the best "investment" the family can make.
Every month that loan sits there, interest eats into the remittance. Make it the top priority after basic household costs.
Build an emergency fund at home
Keep a reserve in a bank savings account at home, ideally enough to cover several months of basic household costs. If the job abroad ends suddenly or someone in the family gets sick, this money means you don't need a rushed loan.
I've written more about building an emergency fund on an irregular income, and remittance definitely counts as irregular.
Plan for the return
This is the part most families miss. Working abroad is usually temporary. What happens when the worker comes home?
- Will there be an income source? A small business, a job, rental income, farming?
- Will there be savings to live on while that income gets started?
- Does the worker have skills or contacts to use back home?
Start thinking about this years before the return, not months. Setting aside part of every remittance into a "return fund" can make the transition much smoother.
Be careful with big spending decisions
Some of the most common regret stories involve:
- Building a house that's bigger than needed, using up all the savings with nothing left for income
- Buying land at inflated prices without checking documents properly
- Very expensive weddings or ceremonies funded by loans
- Lending large amounts to relatives without clear terms
None of these are always wrong. But big decisions should be made together, with both the worker and family agreeing, and with a clear idea of what's left afterwards.
Use legal channels, always
Send money through banks and licensed remittance companies.
Hundi (informal money transfer) might offer a slightly better rate, but:
- It's illegal in Nepal
- Your money has no protection. If the hundi operator disappears, it's gone
- It can land your family in serious legal trouble
- It doesn't build a formal financial record, which can matter for loans and other services later
When comparing legal services, look at the full cost: the fee plus the exchange rate. A "zero fee" service with a poor exchange rate can cost more than one with a small fee and a good rate.
Always confirm the money arrived through official records, like the bank statement or the remittance company's app, not just a phone call.
Take advantage of what's available
Nepalis working abroad have access to some specific options. Check current details, as they change:
- IPO quota: many IPOs reserve a portion for Nepalis working abroad. You'll need a Demat account and to meet the eligibility requirements. (See my post on Demat and Mero Share.)
- Foreign employment savings bonds, when the government issues them
- Special savings or deposit products some banks offer for remittance recipients
- Social Security Fund contribution options for workers abroad
- Foreign employment insurance through the official scheme. Make sure you understand what it covers.
Be careful with "schemes"
Remittance families are a favourite target for scams and risky schemes, because there's regular money coming in and the earner is far away.
Red flags include cooperatives promising unusually high interest, "investment opportunities" promoted by people from the same village, and anyone asking for money to "speed up" a transfer or "release" a stuck remittance. Never share banking passwords or OTPs with anyone claiming to help with a transfer. More in my scams post.
Talk openly about ownership
Finally, the awkward one. Talk openly about whose name each account, piece of land and asset is in.
It's uncomfortable, especially in joint families. But many painful family disputes start when a worker returns and finds that assets bought with their money are in someone else's name, or when something happens to the worker and nobody knows what accounts exist.
Make sure:
- Accounts have nominees
- Important documents (citizenship copies, land papers, insurance policies, account details) are kept safely and someone trusted knows where
- Big purchases are recorded clearly
It's an awkward conversation, but it prevents much bigger problems later.
Working abroad is a huge sacrifice. A clear plan at home makes sure that sacrifice actually builds something lasting.
General information, not personal financial advice. Rules, rates and fees change, so check with the official source (SEBON, NRB, CDSC, IRD or the Nepal Insurance Authority) before you act. Have a question? Leave it in the comments.
