Question from a reader: financial obligations abroad

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A reader wrote me recently with several questions. While most had to do with finding a job and recruiters (two subjects I’ve talked about quite often), this one was new to me:

I’m not straight out of university so [I] have financial responsibilities and would prefer to know what I’m getting myself into.

One thing a lot of people overlook is their financial matters – both here in Korea and back in their home country. If my recent poll is any indication, at least a fair percentage of English teachers come to Korea for the money, whether to build a savings or for a better lifestyle.

A reader wrote me recently with several questions. While most had to do with finding a job and recruiters (two subjects I’ve talked about quite often), this one was new to me:

I’m not straight out of university so [I] have financial responsibilities and would prefer to know what I’m getting myself into.

One thing a lot of people overlook is their financial matters – both here in Korea and back in their home country. If my recent poll is any indication, at least a fair percentage of English teachers come to Korea for the money, whether to build a savings or for a better lifestyle.

Before leaving your home country

  • Tell your bank you’re leaving the country and will need to stop paper statements to your current address. Keep your current account open, and definitely keep some money in it in case of an emergency. Make sure your debit card(s) won’t expire for awhile – especially if your one-year trip goes longer than you expect.
  • Credit cards (if any): register on the company’s website, and figure out the way to pay your bill automatically or electronically from your home country’s bank account (e.g. without those paper checks that have otherwise been collecting dust). Don’t forget to stop paper statements.
  • Student loans (if any): same thing. Most student loan companies feature the same electronic / automatic payment features as credit cards. Peruse the website and register before leaving. Did I mention stopping the paper statements?
  • Write down account numbers, password hints (you do use more than one password, right?), the aforementioned websites, and/or bookmark the pages if you’re taking your computer. Keep as much as possible on ‘the cloud’, just in case a computer crashes and can’t be recovered.

Once in Korea

  • Establish a budget – whether you’ve had one before or not. Figure in rent, eating in, eating out, travel (a LOT cheaper here than elsewhere, some clothes and household items to start out, monthly bills (electricity, water, internet, cell phone), and so on.
  • Force yourself to save at least some money – whether cash in an envelope hidden in your apartment, a separate bank account, or something else, 100,000 – 200,000 won a month adds up fast. The reasons why are obvious enough: vacation, a emergency plane ticket back home, a shiny new gadget or computer,
  • Check your paycheck stubs carefully to ensure you’re getting everything you agreed to. If any deductions are made, make sure you know why and that they sound reasonable. A co-worker was a little surprised to find her cell phone deduction (provided by the employers and the cost deducted from her paycheck) was over 100,000 won a month until she switched to Skype for her international calls.
  • Open a bank account at KEB. Internet banking in English and the ability to wire money to your home country online at half the cost elsewhere, along with all the standard stuff the rest of the banks offer. They’re all around Korea, though their expat VIP branches are in Gangnam (near Yeoksam station), Itaewon, and Hannam-dong. Fifteen others are called KEB Global Desks – plenty of English to go around. Seriously – these guys rock (and no, they don’t pay me to say that).
  • Learn how to pay your bills. If you pay any of your bills (electricity, water, internet), you’ll get a paper slip in your mailbox every month to take to the bank. Ask a bank employee to help the first couple times, but it’s pretty simple. Personally, one trip a month to the bank to pay bills suits my fancy just fine – and it’s taken right out
  • Start a filing system – ideally, any money you receive or pay for important stuff will have a receipt. Save the receipts when you pay a bill and staple them to the bill in case there’s a problem. Don’t forget your pay stubs / paycheck information.
  • One day a month, review everything – possibly the day you pay your bills. Is all the money where it’s supposed to be? All the bills being correctly? Go to your bank(s) and update your passbook(s), then take a look at those records.

Experienced expats, did I miss anything?

Creative Commons License © Chris Backe – 2009



4 thoughts on “Question from a reader: financial obligations abroad”

  1. I’m learning from this post,

    I’m learning from this post, thanks a lot. Given the recent volatility of the stock market, it comes to question whether maintaining a stock investment is a good idea at all.  Well it can be – it just depends on how well you manage your investment portfolio.  If you buy low, and then sell high, like it’s best to – you can see some handsome dividends. First, you want to invest in a proven performer, or a company whose products/services are in high demand, or will be.  Obviously, heavily investing on a company specializing in underwater basket weaving isn’t the best idea, is it?  You can make money in the stock market, but it has to be done carefully and prudently for it to pay off.

    Reply
  2. korea

    while here i would not wire money as that money can be easily traced by the tax people. since canada has no way to look into korean accounts, if you dont wire money home, you can avoid paying taxes on it. if you are forced to do so, try to use someone elses account. it may be illegal to hide the income you make here but who is not a tax cheat? if you were here for  year and made 24million WON and saved say 10g Canadian, do you want that taxed?

     

    or

     

    you could claim non residency status. that way you would not have to pay taxes legally. but there are things you can and can not do if you choose this route so really look into it before you do. i would say most teachers here jsut make cash and go. koreans are getting there taxes so taxes in other countries are none of their biz. being here for 7 years i have not known one person who actually claimed what they made here. good luck.

    Reply
  3. Stock market people are much

    Stock market people are much like gamblers; you never hear how much they loose only how much they win/gain.

    Some people do well in the stock market, I think they are very far and few between. Most people, especially English teachers with their limited amount of wealth should be more interested in preservation of their button collection than of huge gains in the stock market.  

    Reply
  4. Emergency fund

    Yes, Chris I think your list should include an ’emergency fund’. Logically before one would come to this country.

    I’ve seen this a thousand times. People show up totally destitute or by means uncontrolled by them experience a hogwan firing,repayment of flight by the school garnishing their first pay leaving them wonless. Another example if is the school pays late or not at all. I could go on forever……

    People please don’t show up here unless you have at least access or have $500. This which would be at least a couple weeks in a love hotel and basic foods money while you look for employment.

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