I will be honest: I have saved no money during the past three years living in Korea.
However, I now have less than $1,700 left on my student loans (down from the $21,500 I originally had when I arrived. Of course, this doesn’t include any of the interest I’ve paid on my loans during this time.)
I will freely admit that I have not exactly lived frugally during my time teaching here. On breaks, I go abroad to Japan or Hong Kong or Southeast Asia. I even took a European vacation two years ago, and visited my family back in the US last year.
However, this isn’t to say that I’ll be going home empty-handed when my contract finishes at the end of August. I still have both my pension and my contract completion bonus and severance to look forward to, which should be, all together, somewhere around nine million won.
But, enough about me. Let’s do the math to figure out your savings potential for one year.
(For all practical purposes, I’ll set the exchange rate at a very clean 1,000 Korean won to 1 USD.)
Let’s assume you’re working for EPIK (for other ways to teach English in Korea, click here.) If you’re a newbie, with only a bachelor’s degree and a TEFL certificate, you’ll earn 2.1 million each month, on average (if you’re interested, the payscale is here.)
Let’s talk about necessary expenses.
Assuming you take the apartment offered to you, instead of the 400,000 housing allowance, you won’t have too many expenses besides utilities (including internet, phone, and water) and whatever you decide to do during your time here. Utilities can run from anywhere between around 70,000 – 200,000 a month. Assuming you’re in the middle of these, that’s about 135,000 per month.
Tax and Pension
Income tax is only 3.3% of your paycheck, which will siphon another 69,300 away each month. There’s also your pension (4.5% each month), which is 94, 500. On top of that, your healthcare will be about 1.5% of your income, which is 31,000.
So, once all is said and done with, you should be left with about 1,770,200 each month.
Of course, you also have to eat. Food in Korea ranges from the uber cheap ($1 kimbap, anyone?) to very extravagant dining-out.
I spend between $30-50 each week on food. I cook a myself at home during the week, and tend to go out with friends on weekends. (Of course, if you eat expensive Western food you can quickly blow through twice this much, easy, but I tend exist primarily off of coffee, vegetables, and carbs.) My food total is thus 120,000 -200,000 each month, for an average of 160,000.
So, remaining after all of that is 1,610,200, if I’ve not screwed up the math. That’s almost $1,500 a month in savings!
Of course, it’s not very likely you just go to work then go home to twiddle your thumbs until it’s time to go to work again. Most people (*ahem, everyone I know*) fails to save all of their income every month. Life happens. Things cost money.
I walk (or sometimes bike) to school instead of taking the bus or metro, so I don’t have any weekly transportation fees. If you do take the bus or subway, it will only cost about 1, 250 – 2,000 won each way.
That YOLO Life in Korea
Of course, you might want to go to the gym (50,000 – 200,000 / month) or shopping or a myriad of other activities. Intercity buses around Korea range from about 8,000 (for a nearby city) to around 25,000, if you’re traveling across the country. Nightlife can be pretty cheap as Korea’s most celebrated liquor, soju, only costs about 1,000 per bottle (although the subsequent liver transfer is a lot more).
So, if you stay in Korea and make the most of your time here, you can expect to blow through an extra 200,000 – 300,000 per month, easy. If you factor in travel to other places outside of Korea, that can be a lot more.
Everything being said, I think that saving about 1,000,000 ($1,000) a month is quite reasonable. It allows you to live without being too frugal, but can still put a pretty penny in your pocket by the end of the year.
And remember that pension I talked about?
If you’re from certain countries (like the US or Canada) you can expect to get that back once you leave Korea. Best of all, it’s matched by your employer so you can expect about 2,268,000 at the end of the year. Combined with your contract completion bonus (which is roughly one months’ pay), you’ll have over 4,368,000, just for living that kimchi life for one year. (There’s also a provided exit allowance, but as you’ll probably use that to buy a ticket back to your home country, I’ll not include it here.)
So, in total, after a year of working in Korea and living somewhat frugally (no European vacations, that is), you can expect to have saved around 16,000,000 total – or just around $16,000.
That’s really not too bad for a year of work, right out of college.