Why International Teaching is Financially Awesome!
Updated: Feb 22, 2019
"You know, if you have any Bachelors Degree and a Teaching English as a Foreign Language (TEFL) certificate, you can get a job in tons of countries right out of college!"
- my wise friend Olivia
I think my adult life started when I heard that sentence. I was instantly intrigued. A few weeks later I had applied to a TEFL program, been accepted, and paid for the tuition and plane ticket. From the first moment I stepped in front of a class, I was hooked. I knew what I was put on earth to do, teach internationally.
Two weeks after I graduated from University of Vermont with a degree in Political Science and a TEFL in my suitcase, I was in Thailand, a week after that, I had a job teaching English, Social Studies, Health, Music, and Thai History (of all things) for about $1000 a month. I had adventures, I made lifelong friends, I made mistakes, and I was happy.
I bought a used little 125cc "motorcycle" for $500 and puttered along with the elephants and food carts in the breezy tropical nights. I lived in a little furnished studio apartment that cost $125 a month and ate the best Thai food in the world for about 75 cents a meal. I watched as the daily thunderstorm rolled over my city from my 7th floor balcony. I was even able to save money, almost half my salary, even with traveling all around South East Asia and going out to eat all the time (I didn't have a kitchen in the tiny studio apartment).
But I heard rumors about these things called "International Schools" where the pay was triple what we "backpacker" teachers made and they gave you something called a "housing allowance". The catch was you needed real credentials: either a bachelors in education (which I didn't have) or a Masters in Education/Masters of Arts in Teaching and Western certification (which was a possibility). About 1 semester in, I knew that I wanted to be a teacher for a career, that this wasn't just an "adventure" before I returned to the "real world" and I realized that while teaching conversational English was good for a 22 year old, it wouldn't do for raising a family or retirement or anything adult like that. If I wanted to stay international long term, I needed to get into real, accredited International Schools, which meant leaving Thailand and going back home to get my Masters.
Fast forward two years (because you don't need my whole life story for this, and I haven't even gotten to the point of this post and I'm already 4 paragraphs deep). I've survived getting my Masters and teaching for a year at an inner city charter school in Memphis and I've escaped to my first proper, accredited international school in Bahrain, Ibn Khuldoon National School. I have $26,000 in student loan debt from my Masters, but I have no taxes or rent to pay, and I quickly start tutoring, then I start a photography teaching business, then I start doing corporate photography gigs. In my 4 years in Bahrain I went from $26,000 in debt to $20,000 up, with another $20,000 of photography gear and training to boot.
This was when I realized the three reasons why teaching internationally was such a financially beneficial gig.
No Rent (and sometimes utilities too)
Think about it, if you're living and teaching in your home country, you're probably losing at least 25-35% of your income to income tax, not even counting sales taxes, property taxes, and all the rest. Then you're paying rent or a mortgage, which varies greatly depending on location and size of residence, but the old rule was about 30% of your salary. Then you have utilities, which can easily be another 15-20%. Add that all up and you're losing between 70-85% before you start buying groceries and clothes and car payments and gas and insurance and and and. So if you were making $50,000 back in the US, after rent and taxes and utilities, you are really only taking home between $7,500 and $15,000 of your original $50,000. That's hard to buy groceries on, much less save any money.
But when you go overseas, that all changes. Many (but certainly not all) countries you teach in don't make you pay taxes, or the schools cover them, so your tax bill goes to 0%. Most schools pay your housing, or give you a housing allowance. So that bill can go to 0%. Some places cover your utilities or a big chunk of them, so that can drop to 0% or something a lot less than before. Suddenly, making $50,000 is actually making and KEEPING $45,000 or the whole $50,000. You don't pay US taxes on the first $102,100 made overseas, and there are VERY few teaching jobs that pay that much, I certainly never have come close to that.
To get the purchasing power of a $50,000 international job while working in America, you would need to make (if you keep the percentages lost to taxes, rent, and utilities the same, which I'm not sure you should, especially for utilities, but hey, if you have a giant house, you need to heat and cool it and water the plants, so those costs could scale) between $167,000 and $333,333 in the US. So we are looking at a 3 to 6 fold increase in pay for a similar amount of spending ability.
If I want to save $20,000 a year, my normal savings goal, there is NO WAY I can do that in the States without some serious Raman Noodle eating and not owning a car or doing much of anything else. But overseas, that's totally doable, because I get to keep the vast majority of my salary. And I also pretty much have to, because I'm not contributing to Social Security back home, so if I want money when I retire, I need to make it myself.
This is even before we consider side hustles like tutoring, which can easily be worth $50 an hour or more. When I was tutoring a lot, and working my other side gigs in Bahrain, there were many months when I saved my entire paycheck and just comfortably lived off the money from my extra work. Now there are online options as well, like VIPKid, tutoring kids in China online for around $20 an hour.
With numbers like these, there is absolutely NO REASON for international teachers not to be saving large amounts, or destroying debt quickly. Still, some don't save at all. They get hooked on the hedonic treadmill, where you have to keep getting nicer and nicer stuff as their income goes up, eating all their gains. Andrew Hallam calls it "expatitis" and does a great job explaining the dangers to your future it poses. DON'T LET THIS BE YOU! Just because you have money, doesn't mean you need to spend it. In most cases, that won't make you happier anyway.
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