Personal Finance for English Teachers Abroad
Nearly 5 years ago, I wrote about building up your pantry on a budget. Now that I’m leaving Spain in just 4-5 weeks, it’s time to do the opposite. Care to join me in a pantry challenge? Let’s use everything up!
Although I’ve moved within Spain several times, this will be my first international move since I arrived in 2015. With each previous move, I left food behind with local friends, since pantry food was the last thing on my mind, and I never planned for it.
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“Budgeting isn’t about limiting yourself — it’s about making the things that excite you possible.” The Financial Diet
Moving abroad to teach English is a huge step, whether you plan to go for one year or to put down roots. How much money to take with you will depend on where you’re going, but a good rule of thumb is to save up at least 3 times your expected monthly income. Equally important is planning the whole budget for a year abroad. Download my free budget template and follow along.
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Finding ways to earn extra income is not a new concept to most people, from the Millennial “side hustle” to Dave Ramsey inspired “Dave Jobs,” every generation has its own methods for creating new sources of income. This isn’t any different for the auxiliar de conversacion. Here are 3 tried and true methods for earning a bit of extra money while teaching abroad, and one bonus way to start earning extra income before you even move abroad.
According to CNN Money, 44 million Americans have a side job. Many people need these jobs just to keep up with their regular bills. One benefit of teaching English in Spain, is that you can avoid such inflated bills, since the cost of living is so much lower than many of our cities back home. As an auxiliar, you shouldn’t NEED extra income just to get by, but it can really help improve your travel opportunities. Extra income can also be used to pay down debt back home.
Last week, when I posted about how to budget when you don’t know your expenses, a reader asked me how I get my grocery costs so low. I was able to maintain a 65 euro a month grocery budget for a year in Vitoria-Gasteiz of the Spanish Basque Country. Part of this was due to cost sharing with my partner. However, even when I shopped on my own in Huelva, Andalusia, I still averaged a budget of about 80 euros a month. How? The key here is in having a well stocked kitchen. Let’s build your starter kitchen.
Cooking at home is one of the best ways to save money when you’re on a tight budget. But what do you do when you’re starting from scratch? Let’s say you’ve just moved to a new city. Your starter kitchen is all of the food products you will need to buy to have a functioning kitchen. Before we dive deeper into building your starter kitchen, let’s take a look at what some of my frequent purchases are and what they cost.
Creating a budget can be very overwhelming – especially when you’ve just moved and you don’t know what your expenses will be. I’ve definitely been there. When I arrived in Spain in 2015, I came with $2000 as my starter budget, but without a plan in place, I blew through over half of it before receiving my first paycheck. If I could do it again, what would I do differently? This is what I recommend for incoming auxiliares de conversacion.
I would begin by creating a budget using the 50/20/30 Rule. Here’s how it breaks down:
So how would it look for an auxiliar creating a budget based on this plan?
There’s just something romantic about the idea of a road trip. From watching American classics like Thelma and Louise, to reading books like On the Road by Jack Kerouac, the inspiration is everywhere.
But, believe it or not, I have never actually been on a road trip in America. Although I would love to step back in time on Route 66, road trips in America are often very long and very expensive.
In Spain, on the other hand, you’ve got a variety of cities and landscapes all within a relatively small country. The entire country is slightly smaller than Texas, after all.
One of the best ways to save money on food is to cook at home. I have already written about how I keep grocery prices lower with cost comparisons from various stores. Today I’m going to focus on how to prepare 12 or more low-cost meals–and all from just one whole chicken!
When I first started doing my price comparisons, I was looking for the lowest price per kilo on chicken breasts. If you remember from my notes, the best price was 5.19 euros per kilo at Mercadona. As I got more comfortable cooking, I started to look at other cuts of chicken, and was really impressed by the price per kilo of a whole chicken: 2.18 euros per kilo!
The only problem was that I didn’t know how to cook a whole chicken. But for a savings of 3.01 euros per kilo, I was sure willing to learn!
Raise your hand if you have debt. Yup, me too. According to Market Watch, Americans have $12.73 trillion worth of household debt as of March 2017, topping the 2008 peak of $12.68 trillion! About $1 trillion of that is in credit cards alone. How much of that is YOUR share?
We all know that debt holds us back, but what can we actually do about it? The first thing you should do is acknowledge it. Add it up and get a total. I like to use Unbury Me to visualize how different steps will affect my payoff date. Then, when I need to make a payment, I use TransferWise to send money back to my US account.
Moving abroad with no debt is ideal, but for many of us it isn’t realistic. If you can pay off all of your debts before moving, you will have less required monthly expenses. However, you should not use up all of your savings in order to achieve this, as you will need a starter budget to help yourself get set up in your new location.
When moving abroad, you can’t just focus on your total debt. You need to break it down into individual loans and monthly payments. Many personal finance experts, such as Dave Ramsey and Suzy Orman will recommend that you eliminate debt by lowest debt first (Dave) or highest interest debt first (Suzy). I respect both of their opinions.
However, for people moving abroad, the most important thing is minimizing monthly expenses. When I moved to Spain, I had $262.27 in minimum monthly payments. That’s a lot when your steady income is 700 euros a month. Now I’m down to about $42 a month in required debt repayment. How did I do that? Let’s take a look: