How I Paid Off $10,000 in Debt While Teaching English in South Korea

After the excitement of graduating from university, I was panicking. I wasn’t happy with my current job and I felt like I needed some adventure in my life. I had also recently charged an emergency room visit on my credit card since I didn’t have insurance. In retrospect, it was not the smartest idea, but I was scared and didn’t know there were other options, like making a payment plan. So when I spoke with a recruiter who said teaching ESL in South Korea would save me loads of money, provide insurance and housing, and allow me to travel and live the adventurer life, I was hooked.

My recruiter told me I’d be making about $2,000 USD per month, apartment and insurance included, and I would get severance and pension (retirement) pay at the end of the year — which could be as much as $5K! Plus, the school would pay for my flight to Korea! I was sold, especially since my credit card debt had reached $6,285 between two cards. I would have the opportunity to travel while making money and paying down my debt.

I sold my car for the extra money and left for South Korea with about $1,000 in my pocket. My recruiter warned me that I wouldn’t get my first paycheck until after my first month of working, so I was prepared to be tight on spending for a while.

I didn’t realize how unrealistic my expectations were or what my life would really be like during my first year abroad. I didn’t have a real plan set in place. I had ideas of what I would do with my money, but nothing concrete. I thought Korea would be the answer to all my problems.

I had fun. A lot of fun. I was exploring different parts of Korea as often as I could. I was making new friends and going out almost every weekend. I also got a new tattoo — which, as most of us know, isn’t cheap. I had never experienced anything like Korea before and I was just so excited to be there. I wanted to travel and see everything. Flights were much less expensive than they were in the U.S., so when my new friends invited me on trips to places like the Philippines, I couldn’t say no.

I was kind of saving money, but kind of not — and I was definitely not sending enough money home to pay off my credit cards. In fact, I was charging even more! I took taxis or buses to work even though I could walk and arrive within 15 minutes. I ate out almost every single night and had a fancy gym membership. I realize now I should have been thinking more about my finances. My money habits were getting worse, not better.

I should also have been considering the exchange rates and how they fluctuate throughout the month. I could have waited to transfer my money until the exchange rate was in my favor; instead, I transferred money home whenever I got paid, without paying attention to the exchange rate or the fees.

By the end of my first year I had let my credit card debt reach an all-time high of $10,000. I had maxed out both cards and, through the drunken blur that was my life, knew I need to make a change. Remember that year-end payout my recruiter told me about? It was great. I think I had about $3,900 total after taxes — but instead of using some of that money towards my cards, I decided to fly home for a little vacation.

In short, my first year was full of financial irresponsibility and mistakes.

I used my time home to recoup and really take a look at my finances. I knew I had not been responsible with my money and realized that no matter where I was in the world, my debt wasn’t going anywhere. I had to make the change. I decided this year would be different.

My new goal was to pay off all my credit card debt in two years. I didn’t want to stop working abroad, so I decided that I would look for a new job in South Korea. I needed to be making at least $2,400 a month so I could pay at least $500 to each card (one was maxed out at $6,000 and the other card’s balance was $3,985). During my first year in South Korea I was only making $1,800 a month, not the $2,000 that my recruiter had suggested I’d earn, so it was time to up my income.

It was also time to refinance and consolidate my student loans. I had been making small payments to individual loans, but once they were consolidated I didn’t have to make a bunch of different payments; I could make the one-and-done. I was also able to sign up for income-based repayment, which gave me a lower monthly payment and let me put the extra money towards my credit card debt.

This time I was ready. I headed back to South Korea with a new job offer in hand; they paid a total of $2,800 a month, and once you subtract rent I would make roughly $2,400 a month, which was perfect. I started living frugally… kind of. I was still living overseas and wanted to enjoy myself, but knew I needed a budget this go-round. My first year, I just spent until my money was gone. This time, I’d plan for things like transportation expenses, entertainment expenses, groceries, etc.

My second year was much more successful than my first. I slowed down on going out, had a weekly food allowance, invested in a bike to cut down on my transportation costs, and actually started saving money instead of spending it. I even started reading financial articles and blogs to help me on my journey. I also started monitoring my accounts more frequently.

During this time, I also met the man who would become my husband. He was, and still is, very responsible and logical when it comes to spending. He taught me even more about budgeting and helped me establish responsible money habits, like asking myself if I really needed something before I bought it.

I was really proud of myself for sticking to my budget. I had even allotted money for emergencies. I felt like such an adult. My payment of $500 every month to each card didn’t always happen (spontaneous vacations, parties, etc.) but I made sure to pay at least $250 per card per month. By the end of my second year in South Korea, my debt was down to about $5,000. I was happy with that number but told myself that if I wanted to reach my goal, I needed to do even better.

This time I didn’t go home between contracts. I saved the severance money and let the pension money sit in an account instead of withdrawing it. Then I re-evaluated my debt repayment plan, decided I still needed to increase my earnings, and found an awesome job in Seoul which paid a lot more. My new salary would be 3.3 million Korean won a month, which equaled about $3,000 USD. The only downside was that I’d have to find and pay for my own apartment. All the perks were still there, though: insurance, pension, and the end-of-year payout.

I knew I’d have to find a cheap apartment. Renting is different in South Korea than the U.S. Instead of putting a month’s deposit down, many landlords request a deposit of anywhere between $2,000 and $20,000! Since I had saved my severance pay, I knew I could afford a deposit of no more than $2,500. Thankfully, I ended up finding a place on Craigslist with a $2,000 deposit (which shocked everyone I told, until they saw the apartment) and rent of $425 per month. It also wasn’t far from the school I was working with; only a 40-minute bus ride that cost about $1.10 each way. Connecting my transportation card to my bank card saved me money as well, since it saves passengers 10 percent of the ride fee. I was in major money-saving mode this time around.

With the extra money, I knew I would have my credit card debt paid off before the end of the year — and I wanted to have it paid off within six months! I kept to my goal of paying $500 per month per card, and I always tried to pay before the due date to reduce the amount I was charged in interest.

During this time my boyfriend and I became more serious and he moved in with me eight months into my teaching contract. We really enjoyed living with each other, even if my apartment could barely house one person. Having someone to split utilities and rent with was a benefit, and sharing financial responsibilities with my boyfriend helped me become even better at money management.

Around this time I had to start considering my next move. Was I going to stay in Korea or go back home? With my contract ending soon, I had to decide if I wanted to stay with my current employer, go elsewhere, or go home. I wanted to make the right decision but was having some difficulty deciding what I wanted to do. A few days before my Christmas vacation to Vietnam, my employer scheduled a conversation to discuss my future. They gave me a few options, one of which was ending my contract three months early while still receiving my year-end bonus and severance. I considered my options while on vacation and came back knowing what I would do.

I accepted their offer and decided to end my contract three months early. With the extra money, I would be able to make the final payment on my credit cards, have a larger down payment for my next apartment, and be able to take a break. It all worked out perfectly, thanks to good timing and planning. So much happened as my contract was ending. A new part-time position fell into my lap, tutoring opportunities were coming in left and right, and a proposal from my boyfriend all happened within the same month! I didn’t know financial planning could have such amazing effects.  

I missed my six-month debt-repayment goal by a few months but in the end, I had managed to pay off all my credit card debt and save money in a little under four years. Being free of all that credit card debt gave me such relief. I was able to think more clearly about big decisions — and my fiancé and I decided to get married shortly after my contract ended.

Because we wanted to make smart financial choices, we decided to wait on the ceremony until we had a little more money. We became legally married in April of 2017 and planned to have a ceremony that August. I should mention that weddings in Korea are very different than the U.S. and also MUCH cheaper. Our ceremony cost $7,000 in total with the hall, dresses, tuxes, make-up, food, open bar, and more!  Even though our wedding and honeymoon threw off our financial goals, we thought the good outweighed the bad. It became an investment in our future.

Over the next year, we made plans to come to America and went through all the visa processes with the embassy (my husband is Korean). During the whole process I kept thinking how happy I was I had been able to pay off all my credit card debt, especially since the government had to take a good hard look at my finances and decide if I was financially stable enough to sponsor my husband. Fortunately, they decided I was, and here we are.

When I first decided to teach abroad, I didn’t realize how important it was to have a good handle on your money. It is so important to know how much money is going in and out of your accounts, and to have a plan (or at least a semblance of a plan) to move your life and financial goals forward. These days, I try not to live outside my means — and never spend more money than I actually have. I still have credit cards, but I now know how and when to use them.

Maggie recently relocated to Houston after teaching abroad for five years. She enjoys reading and spending time with her husband, dogs, family, and friends.

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