Moving abroad? Here’s how ELT teachers can prepare financially

When you’re getting ready to move abroad for an ELT job, there are lots of things to prepare in advance. I used to buy the Lonely Planet as my country guide and the Time Out Guide to the city and dream about restaurants and day trips. I’d spend loads of time thinking about luggage and packing, and then repacking because it didn’t fit. And if I needed a visa, of course, I got that sorted ahead. But in terms of my finances? I didn’t prepare financially for moving abroad at all.

OK, maybe I ended a mobile phone contract. Sometimes I called my bank to tell them not to block my card because of a sudden transaction in Thailand. In the old days, I’d exchange some money before I left so I had some cash just in case. Which is still probably quite a good idea in case the bank phone call doesn’t work. But that was it.

So here’s a proper checklist of things to prepare financially before moving abroad. I personally think TEFL courses could give something like this out … but anyhoo. 

There may be affiliate links in this post from which I earn a small commission if you go on to make a purchase, at no extra cost to you.

1 Think about where you’re going

OK, so maybe you’ve already decided or been offered a job. But just in case you haven’t, give some thought to researching the cost of living vs the salary you’re expecting. There’s a range of likely situations:

• Some countries pay really well but it’s expensive to live there. 
• Others pay well and the cost of living is low. 
• The job pays badly and takes no account of the cost of living (many TEFL jobs).
• Pay is low but it’s cheap to live. This is fine as long as you don’t need or want to save money to move to a more expensive place later on.

But at least know which set up you’re going into before moving abroad.

Take a little bit of time to think about how that fits in with other goals you might have in your life, like starting a family, going back to university, travelling etc.

2 Think about which job to take

I can’t quite believe this as I type but it’s true. Never once did I consider pay when deciding which school to work for.

I either arranged a job before moving abroad based on whether it was a big school or well-known chain, if they paid for relocation, and whether I’d have to teach kids or travel a lot. I did once take note of the fact one employer paid something towards the Delta if you then chained yourself to them for the next million years. Which I thought was a major plus and then never took the Delta once I saw what a hideous year the Delta trainees had studying for that on top of their full-time hours.

Never once did I ask myself about money, let alone something as fantastical and silly-sounding as a work pension plan. But it would be a thousand times better to take a job with a workplace pension where your employer pays into the scheme and pay for the flights yourself. Especially if you’re moving abroad long-term. But at least factor this into the choice and work out which perk is more valuable. The better the package, the more likely they are to pay for both anyway. 

Put pensions on your radar in any case. They’re basically a free pay rise for Future You to spend. More on them later.

3 If you’re leaving the UK, think about National Insurance contributions

There’s some really vital information to know about National Insurance and the UK state pension before moving abroad and it’s incredible it’s never mentioned on UK TEFL courses. (Though I’ve been banging on about it for a couple of years now so some teacher trainers are mentioning it now.)

In the UK you pay NI from your wages or you can make voluntary contributions if you’re freelance. Some of that money goes towards your UK state pension when you retire at roughly age 67. The magic part is that even if you leave the country you can still keep paying enough NI to receive the pension. So when you leave, fill out the form (see here for more info on which form to fill in and what it’s all about). That will let them know you’re going and they’ll send you a letter each year to tell you how much to pay. If you’re employed and will be working when you go abroad, you get to pay a much lower rate than if those conditions don’t apply. 

Don’t worry about that too much as, at either rate (either around £900 a year or around £180 a year) it’s a very good deal. Once you hit 35 years of contributions, you can stop paying, That is, unless you move back to the UK and will be paying in once you start work. So it might not be worth making voluntary contributions if you know you’re not going to be away long. 

But keep it in the back of your mind and make an informed decision about it. 

Rather than the situation most people find themselves in because no-one tells us:  having no idea it’s even possible to maintain eligibility for a UK state pension and then … missing out. 

I have a much more detailed blog post about this here. I 1000% recommend reading it, even if you’ve already left the UK.

4 Review your subscriptions, direct debits and debts

It’s a good idea to do this every once in a while anyway but check your monthly and annual bank statements and cancel anything you won’t use after moving abroad. 

If you’ve got debts, plan how you’re going to repay them from abroad if you’re earning a different currency. Depending on exchange rates, the debt might end up cheaper or more expensive. So if your debt is in dollars and you’re going to be earning in euros, a weak dollar will be your friend as your debt will be cheaper and maybe you can even pay it off quicker. If that reverses, the debt will feel much more expensive. 

If you need to transfer money back home to pay it, use Wise or a service like it as it will give you a better exchange rate than your bank and charge lower fees. 

Whatever you do, don’t ignore your debts thinking they’ll go away ijust because you’re moving abroad.  They’ll just pile up interest, late payment fees, and interest on top of the interest and fees. Even if you never plan to move back, they’ll weigh on you. And you never know when you might need to go back to a country again.

To solve the problem, aim to pay debts off as soon as you can, starting with the highest interest first. Think about using a debt consolidation service if you’ve got lots of different debts. Also, speak to them and ask for a repayment plan based on the fact you’ll be abroad. They’ll be far more receptive to planning ahead with you than they will be if you end up missing repayments.  

If you’ve got big debts, a TEFL job in one of these high-paying countries might help you pay it off faster. 

5 Save up an Emergency Fund 

An Emergency fund is typically 3–6 months’ of living expenses to tide you over in case your income dries up. Having one is a great source of peace of mind. It’ll get you out of all sorts of dodgy situations, especially within a precarious field like ELT.

It might take you a while to save that and you can chip away at it starting as soon as possible. Here’s a workshop I offer that will help you calculate it, give you ideas where to put it, and just generally get it done instead of on a One-Day-Sometime-To-Do list. 

But one thing I think all ELTers should do BEFORE moving abroad is have enough savings in the bank to buy you a last minute ticket home. Not the amount a cheap, advance ticket would be, ie the kind we plan for visits back home. I mean one where you have to fly that same day by the priciest carrier that goes to the airport nearest to your home or family. Look it up now and make note of the price if you needed to fly tonight. 

Hopefully you’ll never have an emergency of that kind and the money will just sit there (instantly available and preferably earning interest!). 

But if the worst happens and you don’t have the money you could miss something profoundly important that you’ll regret forever, or be stuck abroad without an escape route if something goes wrong. Or you might have to go into debt to buy the ticket. Or you might cause you and everyone else involved even more stress than the emergency itself while they try and get the money to you abroad. I look back now and can’t believe how few times I had money like that set aside even though I went as far away as Asia, Mexico and Australia. 

PS Don’t rely on travel insurance. Repatriation for a personal or family emergency may well not be covered and even if it is, you’ll have to front up the money and get reimbursed.

6 Decide what to do about old pensions and tax efficient savings

If you don’t have any of these, then there’s nothing to think about here! 

But if you do, here’s some stuff to know about pensions. First, you may not be able to continue contributing to a pension from abroad. Find out if you can before you go. If you can, there might be no point because one of the reasons for having a pension is that there is usually some tax incentive for doing so. If you’re no longer a tax resident of that country, you won’t get that tax benefit. But, maybe you could get some kind of tax benefit from a pension in the new place. What that benefit is will be something to start investigating when you’ve moved. 

If you’ve got things like ISAs, the same limitations may apply. You will be able to hold them but you need to find out if you can still contribute. However, when you take the money you may well find that it is no longer tax free because your new country may tax it. 

Other countries have their own versions of ISAs. They are basically accounts you can put money into either as cash or investing it somehow and all the gains will be tax free. So, when you are thinking about putting money into savings and investments, look for any tax-free options available to you there.

NB If you’re ever thinking about moving pensions or other investments abroad, consult a professional for tax advice. Also, as you approach retirement, seek advice about the most tax efficient way to draw money from a pension. It may be taxed differently than the country of origin.

7 Open a Wise account for converting, receiving or sending money

For your daily life in your new country, you’ll probably need a local bank account. But as you’ll likely still have financial links to other countries or maybe get paid in other currencies a Wise account will save you a fortune – and might even earn you some money.

Firstly, you can hold money in different currencies within Wise. Depending on the country, (see if yours is on the list) you might also be able to earn interest on that money. This effectively gives you a bank account anywhere you want one. And for the person paying you, they will feel they’re paying into a bank account local to them. 

The other major plus of Wise is that you can convert or send money instantly at an excellent exchange rate and for a much lower fee than a regular bank. I use Wise to send money between the UK and Spain. I sometimes do work for American clients and can get paid as if into a US bank account. That saves me so much money as my Spanish bank would deduct a chunk and give me a terrible exchange rate. I hold the money in Wise until I need it and it earns higher interest than most Spanish banks. 

8 Have an exit plan out of TEFL

To be blunt, I don’t see TEFL as having the potential for decent earnings if you’re working for someone else. Maybe if you’re working in one of these countries. Maybe if you get a good job at a university or well-paid private or public institution. These jobs are few and far between, but they exist. 

Maybe money doesn’t matter to you now, but one day it might, so don’t get stuck. Even if you’re moving abroad for the first time, have an exit plan from TEFL.

Think about how you’ll use your teaching skills to transition into a better job in the sector, Or learn the business skills to run your own business where the earning potential is unlimited. Or plan to get out of TEFL entirely and train at something else.

In ELT we don’t get much support with “money stuff” but I want to change that