Financial Management for English Teachers

English teachers in South Korea and around the world—I know a common question that a lot of you have is about what to do with the money you make. Keep on reading for all the details and resources you need to know to come out at the end of your stint teaching ESL in another country ahead of the curve.

Financial Management: Let’s Talk Money

Money-I know it’s kind of an uncomfortable subject for a whole lot of people and some of you might have the “out of sight, out of mind” attitude towards it. Or, the plan to just enjoy life now and worry about the rest of it later. You want to travel the world, see the sights, experience life, or buy that new computer. You only live once, right?

I Get it, I Really Do

I also want those things (of course!). However, I don’t want those things to get in the way of securing some awesome, financially speaking for my future. So let’s talk financial management for English teachers abroad-a very, very important subject that often gets overlooked by well, just about everybody.

I think Andrew Hallam and I are basically the only people in the entire world talking about the subject. He’s all about the international school teachers, but I’m more focused on ESL teachers. His book The Global Expatriate’s Guide to Investing: From Millionaire Teacher to Millionaire Expat should be required reading for all expats working overseas, including ESL/EFL teachers.

Here’s a quick overview of what you need to know about financial management for ESL and EFL teachers abroad.

Pay Off Your Debts ASAP

Debt is bad news and you most definitely don’t want that stuff lingering around, hanging over your head and bringing you down. The feeling you’ll have when you pay it all off is amazing. Now, every single dollar you save is money in the bank and not going to some evil student loan or credit card company. So, buckle down and hit the frugal living hard. Like really hard until all your debt is paid off. If you live in Korea, you’ll want to check out this post: 101 Frugal Living in Korea Tips.

Consider using the Snowball Method

Dave Ramsey is the king of all things getting out of debt and I strongly recommend reading his book The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness as well as making good use of his snowball method.

Here’s the basics of how the snowball method works. List your debts on a single piece of paper from smallest to largest. Make minimum payments on them all and hit the smallest one with every single penny you can scrape together. That one will be paid off soon because of frugal living power!

Then, take that extra money from when that first debt is paid off and throw everything at the next smallest debt and so the process goes. The snowball gets bigger and bigger and soon you’re rolling quickly down the hill towards financial freedom.

Paying off debt is key to successful financial management-start doing it today!

Learn more about the Snowball Method Here

Everyone Needs an Emergency Fund

Only foolish people don’t have an emergency fund. The realistic people know that S#*& happens. Someone gets sick, a plane ticket needs to be bought ASAP, a tooth needs a root canal, etc. Make sure you have enough money to cover this emergency stuff so you don’t have to use credit cards and go into further debt. Plus, you’ll have the added advantage of sleeping well at night. I don’t think anyone ever regrets having a few thousand bucks in the bank for a rainy day, you know?

Ever since I built up my own emergency fund, I’ve had far less crisis situations. If my cat gets sick, I need some dental work, or my car breaks down, I just deal with it immediately. Of course I don’t feel good about spending money on these things but I don’t think twice about it.

Building an emergency fund is a key principle of financial management-start building yours today.

Build a Money Pool and Invest in the Stock Market

If you want to be successful in the long-term, you’ll need to invest in the stock market because apart from starting your own business (risky), or investing in real-estate (a wee bit less risky), the stock market is the only place that will give you the returns you need to retire in style.

Yes, parking your money in a bank account is a terrible idea. See this video for more details: I’m scared of the stock market!

The way that you get started in the stock market is to save up at least a few thousand dollars because you’re still hitting the frugal living hard month by month. While you’re saving, do your research. Then, make your move!

You can buy dividend paying stocks (see this article of mine: Why I Love Dividend Paying Stocks) or broad market ETFs (read more: ETFs instead of individual stocks), collect the dividends, reinvest those dividends and hold the the stocks or ETFs forever. It’s not so difficult, especially the ETF investing.

There are lots of details about ETF investing in The Global Expatriate’s Guide to Investing. You can find out more about dividend stock investing in my book, The Wealthy English Teacher: Teach, Travel, and Secure Your Financial Future.

How to manage money as an ESL teacher

Financial Management: Pay Attention to Those Emotions

Don’t forget to control your emotions-you’ll need to be fearful when everyone is greedy and greedy when everyone is fearful. It basically means don’t sell when the markets are tanking and don’t buy when the markets are going up and up and up. This will propel your financial awesome quest to warp-speed. Check out this video: Fear and Greed in Investing for more details.

You’re on your Way to Financial Awesome

Now that you’ve paid off your debts and invested in the stock market, pat yourself on the back for your good sense in securing your financial future. It’s something that you’re never, ever going to regret. Have you ever heard anyone say they regretted paying off their house, or they wish they hadn’t have paid off their student loan early? I sure haven’t.

Top 3 Expat Personal Finance Websites

If you need some more inspiration, you’ll want to check out these websites that’ll help you get your expat finances in good order!

#1: Andrew Hallam

If you’re going to attempt to understand your financial situation as an expatriate, there truly is no better place to start than Andrew Hallam’s site. He’s the author of: The Global Expatriate’s Guide to Investing: From Millionaire Teacher to Millionaire Expat. In my opinion, this really should be in every single expat’s personal library. It’ll cost you around $15, but could potentially save or make your thousands.

There is also a lot of great information on his personal website. It potentially has most of the information from the book in various spots here and there. But, if you like organized, and easy to understand, the book is probably better. I’d rather read a single guide than waste hours searching around for little bits here and there.

You can find Andrew Hallam and lots of excellent expat personal finance information at: www.andrewhallam.com.

#2: TESOL LifeStyle

In the past year, I ran across Brandy and Stephen who are the brains behind TESOL Lifestyle. I feel like they’re basically my sister and brother from other mothers and I think their website is awesome. They talk about things like making money on AirBnb, budgeting, passive income and side hustles. As you might know, I’m all about this stuff too.

Check out their site, particularly the budget stuff because I think they do a way better job at talking about the particular topic than I do. I’m not gonna lie to you-I don’t keep a budget and it’s a huge weakness of mine. It’s mostly just because I’m almost always thrifty and quite rarely feel tempted to overspend. Anyway, they’re fellow English teachers like myself so check them out if you teach abroad.

You can find TESOL Lifestyle at: www.tesolifestyle.com.

I heard that they might have a podcast coming out soon? I really hope they’ll get it up and running because they’ll be the only ones talking about this important topic.

#3: Expat Finance

This site isn’t bad for expat personal finance, but it’s more geared for the business person working abroad than it is the average English teacher. Many of the things they talk about are more advanced-level moves such as offshore bank accounts and REITs.

However, they do have some solid information related to expat personal finance and it’s well worth a glance around. They also have an expat finance subreddit that you can ask some questions on and hopefully get some solid answers but it’s not super active. The archives are however a decent source of information and you may have had your question already answered.

You can find Expat Finance at: www.expatfinance.net.