“Budgeting isn’t about limiting yourself — it’s about making the things that excite you possible.” The Financial Diet
Why Budget for a Year?
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.
THE SIDE HUSTLE
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.
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?
You, me, and about 80% of Americans.
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.
Debt Management Abroad
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.
Control your debt or your debt will control you.
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:
