How NOT to Save Money

How NOT to save money when working as an international school teacher #7: Earn a Salary in a Currency Which is Losing Value

October 15, 2015


We all hear about the big possibility of saving money while working at international schools, but the reality is that many of us don’t save much of any money.  So, why aren’t these international school teachers saving money?

How NOT to save money when working as an international school teacher #7 – Earn a Salary in a Currency Which is Losing Value

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Five years ago many international school teachers (those earning their salaries in their host country’s currency) were doing quite well with their monthly paychecks.  But because of the rising value of the USD in the last year, these teachers’ salaries are in despair.

Month after month, teachers earning in a currency that is losing its strength (when compared to USD for example) have been seeing their once really nice monthly paycheck go south.  Each time these teachers have to transfer some of their money earned back to their home country (maybe 3-4 times a year for some teachers), the actual amount received gets lower and lower; even though it was the same amount transferred each time.  These international school teachers need to figure out another way to pay off their mortgage, student loans, etc. and fast!  The other choice is to make it your last year at your current school and plan to find a job at another international school in a different country; earning in a different currency.

But some of us are doing alright in this recent “rise of the USD.” There are a number of international school teachers that pay their staff in USD.  A number of countries have a local currency that is just not stable enough for foreign hires, and the school prefers to just pay their staff in a currency that is more stable and secure.  Additionally, many currencies are tied to the USD. For example, Hong Kong Dollars are connected to the USD. Click here for a list of currencies around the world and which specific currency they are tied to.

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So, for international school teachers working in Hong Kong, making HKD, they are still on the right track to achieve their savings goal this year.

There are also some international school teachers earning multiple currencies, at one school.  The British School Caracas and Seoul International School do just that (as well as a number of other international schools around the world).  Part of your salary is paid in your home country currency and automatically transferred/deposited into your home country bank account, while the other part of your monthly salary is directly deposited into your host country bank account. Teachers in this situation seem to have all their based covered then. Unless, of course, both your home currency and host-country currency plummet!

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We do have a comment topic on our website related to the theme of how international school teachers get paid at their school (and in what currency).  It is in the benefits section of the comments and information tab on the school profile pages. It is called: Average monthly salary after taxes and in what currency (explain taxation situation). How often do you get paid throughout the year?

“It is important to note that you are getting paid 100% in local currency. Because the USD is gaining strength and continuing to do so, the salaries here are getting considerably less attractive (meaning you are not making USD 100K a year anymore as the previous comment states). Some teachers have a part in their contract that helps to alleviate some of this difference in exchange rate, but others don’t. The ones that do are getting like 25% of their salary paid at a better exchange rate. It is kind of random, but the board thinks that American teachers here might be spending around 25% of their salary in the USA or in USD. Of course, this is creating a bit of controversy.” – Graded School Sao Paulo (Sao Paulo, Brazil)39 Comments

“The previous comment is off on the current tax rates. It is now up to 23%, and slated to rise further in the coming year. Japan is no longer a place to work and make enough to save significant amounts. This is especially true for couples and doubly so if you have children. It’s a shame as raising children here leaves wonderful impressions on them, and it is amazingly safe.” – Seisen International School (Tokyo, Japan)51 Comments

“10 years of teaching with a masters plus 30 units will get you about 55,000 USD. No tax. Upon departure, the Korean government pays you about 4,000 dollars for each year of occupancy for US citizens, it is some tax exemption agreement between countries. There is also an 8.5% bonus for each year of teaching that accrues interest and is relinquished upon departure.” – Seoul Foreign School (Seoul, South Korea)73 Comments

“We get paid every month, around the middle of the month. June and July pay are both given before the end of the school year. We can choose how much of our pay we would like to receive locally and how much we would like to have transferred to our home country. We get paid in dollars, and are guaranteed salaries after taxes. For 2015-16 the maximum salary is $54,111 (Masters with 24 years experience, an extra $1500 for PhD), minimum is $35,390 (Bachelors 1 year experience). In addition to this is a 13% pension. There is also a possible longevity bonus and re-signing bonus.” – International School of Tanganyika (Dar es salaam, Tanzania)141 Comments

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How NOT to Save Money

How NOT to save money: Transferring money back to your home country multiple times and at the wrong times

November 2, 2014


We all hear about the big possibility of saving money while working at international schools, but the reality is that many of us don’t save much of any money.  So, why aren’t international school teachers saving money?

How NOT to save money when working as an international school teacher #5 – Transferring money back to your home country multiple times and at the wrong times

Screen Shot 2014-11-02 at 5.24.22 PMWhen you have three or more bank accounts in three or more different countries, you know you are an international school teacher.

It is exciting dealing with multiple currencies.  Suddenly, you are quite interested in the exchange rate of EUR to USD and can quote how it has changed over the past 3-5 years, or longer.  Knowing about the value of currencies is super important when working abroad, especially if your goal is to transfer that money into bank accounts that are supposed to help you save.

International schools pay their teachers is a variety of ways.  Many schools just pay you in their local currency, quite simple.  Other schools will pay you one percentage in your home country currency and the other percentage in the local currency (thus possibly elimating the need to transfer any money at all!).

There are also schools that might pay you all in USD (even though you are teaching in Uganda for example) and transfer your salary to your home account each month for you.  Another example of how international school pays their teachers is when they might pay you all in EUR (even though you are teaching in China for example) and send that to your home bank account each month.  money-transfer-onlineIf your home bank account isn’t in EUR, then that could be a problem.  The problem is that each month you will potentially be receiving a different amount each time your salary is transferred. If the school doesn’t lock in an exchange rate for a year (meaning you get the same amount each month) and if the exchange right in question starts to change in an unfavorable direction, then you will find yourself getting less and less money each month.  Of course it could fluctuate in a positive way as well, which will definitely make you smile and rejoice, but the risk is maybe not what most are willing to take.

 

It is nice when your international school will do the bank transfer for you; nice and convenient for you. However, when you have to do the bank transfers yourself, it can be a bit of a headache for you.  Knowing that most international bank transfers completed at the bank itself are more expensive, your best bet it to do the bank transfer via online banking.  You are lucky if your online banking with your host country bank is in English (or your own mother tongue), but most times it is in the language of the host country.  Some advice: get a local friend to help you figure out and translate your bank’s website or call your bank’s customer service number (most times they will have somebody that can speak to you in English).  Remember to get all the right numbers in order to make a successful international bank transfer (SWIFT code, bank account number, etc)!

Screen Shot 2014-11-02 at 5.25.00 PMEven when you initiating your own international bank transfers, you need smart about when you do them because of fluctuating exchange rates and all the fees involved. You will most likely need to pay a transfer fee at your host country bank as well as a receiving fee in your home country bank.  You also don’t want to be transferring many times throughout the year, sending only little amounts. Your best bet is to transfer the maximum amount each time your do a transfer (hopefully when the exchange rate is favorable for you!), so that you can minimize the bank transfer fees.

Usually international bank transfers will take 5-7 days to get into your home bank account, so make sure you don’t this money immediately and plan ahead.

We all have our reasons for transferring money back home and for transferring money from home to your host country.  Maybe you need to make a monthly payment for a mortgage that you have.  Maybe you decide to use your home country credit card for big purchases that you make while living abroad (e.g. capital one has a good credit card that doesn’t charge fees for international purchases and you can also earn points for free flights!) that you need to pay off.  With all these things that we need to transfer money for, we need to be smart about when and how we make these bank transfers.

How often do you have to make international bank transfers? Please share any advice about how you do it, so that you are not wasting your money away.

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We do have a comment topic on our website related to salaries and the currency/currencies in which they are paid (some also discuss transferring money).  It is in the Benefits section of the comments and information tab on the school profile pages. It is called: Average monthly salary after taxes and in what currency (explain taxation situation). How often do you get paid throughout the year?

“Many teachers don’t need to have a local bank account as your salaries are just transferred in your home country one. – International School of Tanganyika  (Dar es salaam, Tanzania) – 60 Comments

“Staff are paid in LKR, which is near on impossible to transfer out of the country. Especially if you want to send it back to the UK.” – The British School in Colombo (Colombo, Sri Lanka) – 35 Comments

“Salaries are at a competitive level, varying according to the teacher’s qualifications and experience. They are paid in addition to fully furnished housing, a local transportation allowance, health insurance, annual tickets for repatriation, and a discount of 50% for teachers’ children in the school. Salaries are paid at the end of each month by being transferred into the teacher’s bank in Saud Arabian Riyals (SAR) which can be converted easily into the currency of choice and sent elsewhere or maintained there, as the teacher chooses. All salary and benefits are free of tax in Saudi Arabia.” – Dhahran Ahliyya Schools (Dammam, Saudi Arabia) – 60 Comments

“Salary is paid on the last working day of each month. Salary is paid in Euro, whilst wage slips are in Sterling. Italian bank accounts are opened for the transfer of salaries. The school assists in this process at the start of the academic year.” – The English International School of Padua (Padova, Italy) – 12 Comments

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