Beginner’s Guide to Budgeting in South Korea

If you’ve landed a job teaching English in South Korea, congratulations! It can be a confusing process–you’ve passed the first hurdle. You may not be thinking of you finances just yet, but it is always good to have a plan! You will need a budget if you want to make the best of this situation financially. Because a lot of your expenses are covered, you may think budgeting is unnecessary. But with so much potential to pay off debt or save money, it’s good to have a general idea of where you want that extra cashflow to go. Follow my guide to budgeting in South Korea and tweak it to meet your own personal needs!

Everyone’s job will have a slightly different pay scale. For the sake of averages, I will say that you are starting with a 2.2 million won budget.  If you happen to make more than this, congratulations! You can follow my budget plan and put the remaining money into various categories depending on your needs. I recommend adding anything extra to debt payments first, then an emergency fund, then investments. It’s easier than you think to save over 50% of your income while in Korea.

Something that’s important to remember when making your budget in Korea is that you should always pay yourself first. What does that mean? It means you should put your budgeted amount of money “away.” This will look different for everyone, but for everyone it means that you cannot easily touch or spend this money. Do not leave this money in your normal checking account. Depending on your situation, this could mean putting aside 1 million won, paying 200,000 into your savings account and 800,000 towards your debt. Maybe you already have a solid emergency fund and you want to put the whole 1 million towards your debt.

You will, of course, be able to include fun in your budget. Part of the reason you went to teach abroad in the first place was because you wanted to enjoy a new culture, experience a new country and travel to surrounding countries. You should definitely allot a certain amount of money per month for these kinds of expenses because if you travel all the way to South Korea to sit in your apartment for one year spending no money, having no fun, and never experiencing the culture around you–you’re definitely missing out on something important! It’s the kind of investment that isn’t monetary.

Kimbap! Cheap, delicious and filling.

 

That being said, I was able to pay off $23,000 in debt, save about $6,000 and travel to 8 countries. I also traveled all around South Korea and regularly did fun things in my city with friends. I went out, had drinks, ate all the food and visited almost every province. If I can do it you can do it too!

Because in most cases you’re not legally allowed to have a side income while you’re working in Korea, you’ll have to rely on one source of income when making your budget. This makes it pretty simple and straightforward. I’ve created a sample budget below. Keep in mind that I’ve simplified everything for the sake of example. This would have been one of my more extreme months when I lived on only about 500,000 won. Your numbers will look different than mine because you’ll have different goals and interests.

 

How I Paid Off $23,000 Teaching English in South Korea

I paid off $23,000 in student loan debt teaching English in South Korea for two years. Not only that, but I put a nice chunk of money into an emergency fund and savings account too!  I’ll break it down for you here to see how easy it could be for you to do the same.

 

A palace you will see when teaching english in south korea

 

 

My Background

I graduated university with about $40,000 in student loan debt–some from a private lender and some from the US government. During the four years following my graduation I worked really hard in multiple jobs. I was trying to both pay my monthly bills and pay down a bit extra each month on my debt payments.

As an “Urban Studies” major who graduated at the age of 20 (side note: who lets 18 year olds take $40,000 in loans for a random liberal arts degree??), I really had no idea what to do next. I had always believed what I had been told–a college degree would make my life better and more financially stable. Now, I didn’t choose the most logical degree. Even though I loved what I studied and it really opened up my mind–there’s a lot of instrinsic value in that–I just couldn’t afford it. But, lenders told me I could, so I did. My degree was not a financially lucrative one, as anyone could’ve guessed. There was no specific career path for me to take, and so began my four year streak of “a little bit of everything.”

I worked as a caregiver, a nanny, an office cleaner, and a barista and a server in the Alaskan wilderness (more about that here!). I did office work, delivery driving and bartending. Most of the time, I was juggling two to three jobs at once. All of this work was an attempt to cover my bills and pay a little extra each month towards my student loans.

Something needed to change.

Teaching English in South Korea

A series of life events led me to decide to become TEFL certified and apply for EPIK, the government program for teaching English in South Korea. About a year after making that decision, I was on a plane!

After buying my ticket, I only had about $1,000 to my name and about $23,000 in student loan debt. Over the previous four years, I had worked hard enough to pay off $17,000. It had, though, been extremely stressful and I had overworked myself to an extreme degree. And, having a “net worth” of -$21,000 doesn’t exactly feel good.

But all of that changed in Korea. I won’t say the job itself was easy though, especially at first. Nothing could have prepared me for the culture shock, confusion at what my role in the schools I worked in exactly was, or the cockroaches in my government provided apartment (the landlord brought in pest control, but it was a bit horrifying for awhile!). But I am so thankful for my experiences and the financial freedom that teaching English abroad provided me with.

The Numbers

Now, for the fun stuff! At least, as a budgeting nerd, I find it fun!

How Much Can you Make in a Year Teaching English in South Korea?

Pay varies depending on what job you have and where you work. Most native English teachers will make about 2.2 million won per month. I will base the bonuses received on my own. Again, for reference, I worked for EPIK in a provincial office of education from 2016-2018.

  1. Paycheck – Deductions: 2.3 million won/month (approximately 27 million/year)
  2. Entry Allowance: 1.3 million won
  3. Settlement Allowance: .3 million won
  4. Severance Pay: 2.2 million won (equal to one month’s pay – extras)
  5. Exit Allowance OR Renewal Bonus: 1.3 million won (if you renew, you’ll get 1.3 mil at the end of your first contract and .7 at the end of your second)
  6. Pension Refund: 2.5 million won (Pension refund is only available for teachers from the USA, Canada or Australia I believe)

Yearly Total: About 34.5 million won  (~$30,615 USD)

Consider Your Expenses

You won’t be paying rent, vehicle expenses (unless you choose to buy one) or extremely high health care costs like you might be at home if you’re American. These numbers will vary from person to person based on your values. But if you are considering just the necessities along with a bit of fun, this will apply to you. Here are some expenses you can expect to pay while teaching English in South Korea.

  1. Utilities: This includes electricity, gas and maybe an apartment complex maintenance fee. It should be around 50,000 won.
  2. Cell phone: Again, depends on your plan. Plan on about 40,000 won for a month to month plan.
  3. Food: Groceries and eating out combined, I spent about 300,000 won per month on food. If needed, you can definitely go the “rice and beans” route and cut back on this!
  4. Transportation: Getting to work and back by bus costed me about 70,000/month. Add 30,000 won/month for traveling around Korea for a monthly total of 100,000 won.
  5. Fun/Stuff: This can include anything you like to do! Some people are into drinking the night away or going to clubs. Some are into shopping (though I would discourage doing this on a regular basis if you want to pay off debt or save–things seem cheap in Korea but add up SO quickly!), some people are into a hobby, and some people like me are into visiting every cute cafe in every city and drinking all of the coffee. Everyone should make the most of their time in Korea by exploring the country–it’s so easy to get around and there is so much to do! We’ll allot 200,000 won/month for this to be safe.

That brings us to a total of about 700,000 won per month (8.4 million/year), plus maybe an extra 1-2 million won per year for traveling or other expenses. Let’s say you’ll spend 10 million won/year.

Yearly Total: 10 million won (~$8,875 USD)

What’s Left?

The answer is–a lot! About 24.5 million won (or more) per year if you play your cards right. That’s about $21,740 USD! Even if you end up spending more than I’ve allotted for expenses, you should still be doing pretty well.

What can you do with that $20,000 USD? Anything you want! Pay off your debt, save money and travel the world. You can do it all as a result of diligently following your budget.

I worked in Korea for two years and paid off the last couple of thousand I had left with the pension lump sum I received after finishing up my contract. The rest of my savings have been invested, saved or are sitting in my emergency fund for peace of mind.

I can’t recommend teaching English in South Korea enough to any native English speaker with student loan (or other) debt to pay. If you love to travel the world and save money, give it a try! What do you have to lose except your debt?

Girl happy with teaching English in South Korea