- Because I am an expat teacher
The expat life has so many wonderful aspects- the high salary, the job security, the sun, and the standard of living. However, it has one downside- it is unpredictable. We might plan to teach here forever with its tax-free salary and perks, but life here can change in the blink of an eye. We might lose our job, do something silly and get deported, or we may have to go home for family reasons. Whatever the reason, we want to have something to show for all our hard work.
Many of us are no longer paying into our private teaching pension at home, which means we must have alternative methods to fund a comfortable retirement that will allow us to lead the kind of life we have now. Speaking of pensions, right now we have longer to work before retirement (until 68 instead of 65) to qualify for the state pension. Unfortunately, by the time we get closer to retirement, the state pension age may even been pushed up to 74 years.
2. Because I am a Millennial
I was born in 1986 so I am part of the Millennial Generation (aka Generation Y). Despite being the most educated group of all generations, we have experienced extremely high levels of unemployment. Many of us (teachers included) are finishing university without secure jobs or a steady income. In 2016, research from the Resolution Foundation found Millennials in the UK earned £8,000 less in their 20s than Generation X (those born between mid 1960s and early 1980s), describing Millennials as “on course to become the first generation to earn less than the one before.” Use this opportunity teaching abroad to save and buckle this unfortunate trend.
According to the 2016 Millennials & Money research carried out by Edelman Financial Services Sector, 1 in 2 of us don’t have enough money for day-to-day needs. Our generation is burdened with huge student loans and high rents to pay (2 in 5 of us have debt), which stop us from saving. In fact, 60% of us are unable to save for the long-term, so we are forced to rent long-term rather than buying our own property. If our parents can’t help us out, some of us may never ever own our own homes.
3. Because people around me may try to discourage my goal of being financially empowered, due to their own money-related issues
Family and friends offer popular (but completely unfounded) statements like, “Money is the root of all evil,” “Money can’t buy you happiness” or try to discourage you from doing money-saving techniques, e.g. you want to rent a studio rather than a one-bedroom for a year, so you can invest an extra 3,000 euros in your retirement fund. This 3,000 euros, left to mature for 20 years at 8% compound interest, could increase to almost 14,000 euros- what a nice easy way to boost your retirement savings for just a one year compromise of living in a studio! Although sometimes well-intentioned, your family and friends are really just projecting their fears of their own financial insecurity onto you. Press them for an explanation or factual evidence of their statements and I can guarantee they won’t be able to give it to you, as it is their own personal opinion. The reason I am so passionate about implementing money-saving and money-generating tricks in my life is because my own personal fear is having no savings, no assets to create more income, and no specific financial targets to meet each year. I want my experience of money to be abundant, positive, and as a tool to allow me to live life on my own terms. If I can do it, so can you!
4. Because I am a woman
Believe it or not, we tend to earn less than men for the same job. I have come across this time and time again, partly due to women’s reluctance to negotiate their salary/ employment package while men are fully expected and encouraged to do so. However, I was still shocked to read these facts from a 2014 TIME article:
- In the USA, the average woman is paid 77 cents for every dollar a man makes, and that figure is lower again for black and Hispanic women; African American women are paid only 64 cents and Latina women only 55 cents for each dollar made by a white man.
- Even though we outnumber men in higher education, men still make more money than women with the same level of educational attainment, from high school diplomas to advanced graduate degrees. In 2011, men with bachelors’ degrees were paid MORE than women with postgraduate degrees. Even more shockingly, the World Economic Forum predicts the gender gap won’t close entirely until 2186. That is 169 years away. This means that our younger sisters, female cousins, nieces, daughters, granddaughters, and great-granddaughters will still earn LESS than males for having the same qualifications, experience, skills and carrying out the same job duties. CRAZY, ISN’T IT???
- Moreover, female teachers have less savings and a smaller pension pot because it is traditionally the mother who leaves her job or takes a career break to raise children while the partner earns a salary and contributes more to his work pension. Due to this extended time out of the workforce, the Australian Bureau of Statistics shows that amongst Australians in the 55-64 age group, the males’ average superannuation savings are $150,000 compared to the females’ median of $80,000 (almost half). As we cannot depend on progress or governments to pay us equally, we absolutely need to get savvy with our own finances in order to ensure that this gender pay inequality does not translate into a poverty-stricken retirement. A 2016 National Institute on Retirement Security (NIRS) in the USA report finds women were 80% more likely than men to be impoverished at age 65 and older. We live longer than men and our savings and income must match that.
- By financially educating ourselves, we also can have the biggest influence on future female generations and their money habits. Consistent saving skills and financial awareness is something we need to instill in everyone, especially in our sisters, cousins, nieces, nephews, and future generations. Read the article Why girls’ education can help eradicate poverty to see the impact of this in countries around the world.
- I have heard some successful and highly educated women imply that their future financial planning takes the form of meeting and marrying a “rich partner,” but in this day and age of trying to bridge gender equality, I personally don’t think it is fair to assume that someone else will take responsibility for our financial issues. That is a huge burden to place on another human being and would we be happy if we were in their place? Probably not. Anyways, why assume your spouse will have more financial knowledge than you? What if your spouse is worse at managing finances than you are or has a gambling addiction, like what happened to wealth coach Barbara Stanny?
- In addition, Sonya Britt, a Kansas State University researcher’s 2012 study “Examining the Relationship Between Financial Issues and Divorce“ found that couples who argued about money early in their relationships — REGARDLESS of their income, debt or net worth — were at a greater risk for divorce. Entering a relationship with similar views towards money and financial goals may reduce the risk of martial problems down the road.
If you enjoyed this article, here are a few more you might like:
- My goal for 2018 – I want to retire by 40!
- 7 tips for expats to save 1000 AED/ QR this month
- How to maximise your chances of getting your ideal teaching job abroad
Join our supportive Empowering Expat Teachers FB group here where each #eetmoneymonday I share tips and resources to help you become a financially empowered expat teacher.