As an Amazon Associate, I earn from qualifying purchases. What does this mean? I recommend products (only ones that I like) and if you purchase a product through that link, I earn some money.
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.
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.
Financial Management: Everyone Can Do It!
Financial management for teachers abroad is really made up of quite simple principles that anyone can follow. It does however require some short-term pain for a whole lot of long-term gain.
Are you ready to use your time working abroad to set yourself up for lots of great things in your future? If yes, the book you’re going to need is The Wealthy English Teacher: Teach, Travel, and Secure Your Financial Future. It will tell you step-by-step how to make that happen. Anyone can take action to take control of their finances and plan for the future.
You can easily get the book on Amazon in both digital and print formats. The digital copy can be read on any device-Smartphone, tablet, Mac, or PC by downloading the free Kindle reading app.
Have your Say about How to Manage Finances for English Teachers Abroad
Any tips or tricks for doing it well? Leave a comment below and let us know what you think.
Also be sure to give this article a share on Facebook, Pinterest, or Twitter. It’ll help other teachers, like yourself find this useful resource.