At 24, I hit rock bottom financially. I’d moved to Portland from Denver for a job. Despite the higher costs of living, my company didn’t raise my salary. As a result, I was racking up credit card debt on top of my $60,000 in student loans. I hated my job, couldn’t keep up with my loan payments and felt utterly lost.
Around the same time, I received an offer from a recruiting agency to teach English abroad in South Korea. I was craving change, so when I saw the program would pay for my housing, I decided to take it.
I had no idea how much that decision would change my life. After living in Korea for seven years, I was able to pay off my student loans nine years early. Even though I was making a low salary, my low expenses and a freelance writing side hustle let me put at least $1,000/month toward my loan payments. Ten years later, I still live and teach in Korea, and I’m debt free.
Most people with loans don’t feel entitled to adventures like traveling or living abroad. It seems like a fantasy that I was not only able to have this experience, but that doing so actually brought me closer to my financial goals. My non-traditional career and financial path haven’t been seamless. But for me, the tradeoffs have been more than worth it.
Here’s how I paid off my loans abroad, plus some of the pros and cons of my experience.
Pro: Lower expenses
My employer pays my rent. This has been the single biggest factor in helping me pay off my loans. It’s fairly common in places like Korea, Japan and China for employers to cover housing costs — either outright or by paying teachers a monthly housing stipend. My employer also pays half of my health care costs as a foreign teacher, around $200/month. Korean national health care generally makes going to the doctor and prescriptions very affordable. I can spend less than $15 to see the doctor.
The city I live in, Daegu, tends to be cheaper than most parts of America. Meals out typically cost less than $20 because (for starters, it’s not customary to tip waitstaff). However, I mostly cook at home and spend about $200 on groceries every month.
There’s also great public transit in Korea. I live within walking distance of work and most stores, so I’ve cut out expenses like gas, car insurance and maintenance. I’ve also taken advantage of Korea’s high-speed trains for affordable local travel. I can get to cities like Seoul and Busan in less than two hours and for $65 and $32, respectively.
Con: Lower salary
Even including my housing, I’m still paid far below a teacher’s salary in the U.S. I’ve now been at the same after-school academy for nearly a decade and am making just over $24,000/year. However, my freelance writing side hustle has helped afford me things I want and need.
My low income has made some kinds of traveling more challenging. The first few years after I arrived, I traveled home for a few weeks every summer. With Covid and rising costs of travel (flying to the U.S. or Europe can cost over $2,000), I’ve made fewer trips. However, it’s still very affordable to travel in Asia.
Pro: Lower taxes
I don’t pay U.S. taxes for my teaching salary, thanks to the Foreign Earned Income Exclusion. I do pay taxes in Korea, but as a foreigner, my rate is relatively low. This is a major perk of moving to Korea to teach: On a teaching visa, the average federal tax rate is 3.3%.
I still file taxes in the U.S. to stay current with the IRS. Since I earn money in the U.S., thanks to my freelance writing business, I pay federal taxes, but I get a nice break because I don’t live in the country. I also have a “permanent” virtual address in Texas, a state that doesn’t collect income tax, so I don’t pay state taxes.
Pro: I’ve had the opportunity to travel widely
While in Korea, I’ve been diligent about paying off my loans. But I’ve also come to value experiences over material things and decided that I don’t want to wait to start enjoying life. While many of my friends have been playing it safe, stashing money into their 401Ks and investing, I’ve been globetrotting. I’ve taken a few pricier trips to places like Hong Kong, Japan, Paris and London. But I’ve also found very affordable opportunities to travel within Korea and nearby countries in Asia, like Thailand, Bali and Indonesia.
Con: I don’t have retirement savings
After paying off my loans, I’ve prioritized travel and experiences over saving. Most of my money goes toward food, travel and socializing. So, while my friends at home have 401Ks. I only have a few thousand dollars invested and a Korean pension account that my employer and I pay into equally each month. For me, that has been between $160-220/month. When I leave the country, I can do whatever I please with it, but aside from that, I don’t have anything set aside for traditional retirement.
Having a disposable income for the first time in my life, I definitely “binge-traveled.” But in the last year, I’ve started to save and become more selective about the trips I take. Moving forward, my goal is to start putting more into my savings account in the U.S.
Pro: I’ve found a diverse group of friends
I’ve met many life-long friends here, including my best friend, who is like the big sister I never had. I’ve also met lots of other foreigners (including Americans) from around the world who have come to Korea to teach as well. Had we not all come to Korea, our paths would never have crossed. I count myself lucky to have friends living all over the world that I keep in touch with.
Con: If I come back, the transition will be difficult
I went home to the U.S. for a year in 2017 after living in Korea for five years. It was one of the hardest years of my life. I had no car, worked a remote marketing job for a terrible boss and was spending $1,000 on rent while still paying hefty student loans, credit card debt and health care costs via the Affordable Care Act.
Once again, I was depressed and lost. I gained weight due to the change in my lifestyle: I had gone from being on my feet most of the day as a teacher and walking most places to sitting all day. Eventually, I was asked by my Korean employer if I would consider returning and happily went back.
The emotional and logistical difficulties of having to “start over” in America were tough. But if and when I come back for good, I’ll be more emotionally prepared, and the circumstances will be different. I have no debt, I’m saving money and I wouldn’t trade anything in the world for the adventures I’ve had or the opportunity to come home debt-free.