It can be very easy and convenient to hide behind not having enough money instead of actively working to find a way forward. Mo had wanted to study abroad in college ten years ago, but understandably finishing school debt free was a bigger priority. Once out of school she was not able to live in pricey California and save for a move abroad. Things changed four years ago when an extended vacation and coming to terms with the financial outlook of her chosen profession made her reconsider moving abroad. Then in 2016 she left the states and has now lived abroad for two years.
Initial Outlook: No way could I afford to live abroad!
The first time Mo seriously considered living abroad was in 2008. She was going into the final year of her theater degree at a well-respected public university. A conversation with her dad regarding study abroad set a theme for the next decade: right now her priority was school, she could live abroad later.
Once out of college her salary, busy social life, and career aspirations relegated “later” to a past goal she’d once had. Plus Mo is a peace-keeper. As a twin Mo had grown up moving forward with unanimous decisions where she and her twin sister both agreed. Later on when she met her partner this pattern continued. She preferred to try to keep the peace and make others happy, sometimes to her own detriment.
After an entire life in the giant megalopolis that is Los Angeles, Mo followed her partner to San Francisco where he was completing college. She had traveled a lot all over the world, but this was the first time she left her geographical comfort zone for good. In LA she had worked at Sephora, a revival-house movie theater, a video rental store, and many other places. She usually had two part time jobs while also working on a theater show. This hectic starving artist life continued in San Francisco.
Mo’s professional life picked up steam when she moved to San Francisco and for a while this was very exciting. During her time there she worked on almost a dozen productions and made strong professional connections. However, Mo and her partner lived at or below the poverty level. In order to deal with this they were magnificently cheap and were able to stay out of debt by hardly doing anything unless it was free. It also helped they were vegan and preferred having friends over rather than going out for drinks.
Living abroad was not in the cards, but thanks to a UGMA account traveling could be. The Uniform Gift to Minor’s Act allows families to gift money to their child without setting up a special trust fund. The money had been put aside by Mo’s parents for her and her sister’s schooling. Once they turned 25 the assets were turned over to them. Mo suddenly came into $5,000. This was enough to afford a visit to Eastern Europe for over a month and still put some of it away for emergencies.
Change of Heart: I don’t care how, but I WILL live abroad
The five weeks in Europe turned out to be life changing. The restful wandering and seeing the world through different eyes gave her time to think. She realized how unfulfilling her life in San Francisco had become. At one point she had worked five different jobs at the same time. Yes, some of them were in theater, but she was working her ass off and barely making ends meet. After her European jaunt she detached from work long enough to consider her wants.
A particularly changing experience was when she let herself see where she was headed. A good friend of hers was an amazing lighting technician, but after more than 30 years in theater he was barely surviving. There were times when he could barely afford to eat after paying bills. It was common for him to take any theater job he could, even though he was often overqualified. Mo did not want that for herself.
So she looked up from her grinding pace. She thought about what she did want. Mo’s partner also had dreams of living abroad, particularly somewhere where he could lend a hand with Syrian refugees. Mo had contemplated getting a Master’s degree in Germany, where she could earn one for a much lower cost than a comparable degree in the US. Thus they began to talk about moving to Germany; she could go to school and he’d get to support refugees.
Now that she saw a possibility of actually moving abroad she decided to focus on money rather than theater. She asked her wide sea of friends about jobs. After only a month she landed one of her most lucrative positions to date as an assistant to an eye pathologist. She got paid $21/hour to do the monotonous work of inventorying eye samples while listening to podcasts. As a creative person this was the first time she was doing something completely unrelated to her artistic side. Her ultimate goal of moving abroad is what made it possible to do a job solely for the money rather than for her love of theater and creativity.
During this time Mo and her partner began to consider teaching English abroad. They took a course in San Francisco and realized they would benefit from getting an internationally recognized certificate, such as a CELTA. Her partner found a CELTA program for half the cost in Izmir, Turkey. With that they began to prepare to move to Turkey. Germany would come eventually once they had English teaching experience.
Shortly before moving abroad Mo came clean to her partner about personal debt she had accumulated in the previous year. The reasons for the debt were varied. The theater jobs required materials and sometimes her pay didn’t cover it. A recent family trip had been out of her price range and she ignored it. She worked at Sephora and loved buying make up. She felt miserable working so much for so little, and dammit sometimes she needed to treat herself to something nice. At $4,000 her debt was manageable, but it caused her a lot of shame. From where I stand, the truth is that she simply did not earn enough to afford living in San Francisco.
Mo’s higher salary would make it easier to move to Turkey, but it wasn’t enough. In order to get a visa they each needed to have around $3,000 lira in a Turkish bank account. They also needed an additional $2,000 to cover the cost of the CELTA program. Rather than postpone the trip indefinitely she decided to take out a personal loan at 9% APR. All those years during which Mo said she could not afford to move abroad were right. She moved to Turkey with a negative net worth of $10,000; half of it in credit card debt and the other half to due to the personal loan.
Reaching the Goal: Stepping into the lead role
Mo and her partner arrived in Izmir, Turkey to begin school. It took work and major adjustments, but after a short time they found an apartment and a community of friends. Once they earned the CELTA they were placed in a job right off the bat. Mo said her life in Izmir was a similar pace to that of San Francisco. She worked full time, taught English to refugees as a volunteer, and participated in additional volunteer activities. During this time she updated her blog on her many adventures living abroad: finding an apartment, visiting a hospital, and going to historic places. Mo was pleased to find out she really enjoyed teaching English. Plus working with refugees was very fulfilling.
The cost of living was dramatically lower than in San Francisco, as was their pay. Although they were able to comfortably afford their lifestyle Mo made little headway on her debt. She was able to consistently pay the monthly due for the personal loan and the minimum payment on her credit card. This meant she’d pay off the line of credit on time, while the interest on the credit card kept creeping up the balance.
On July 15, 2016 the Turkish coup d’etat brought their stay to a halt. The country no longer felt safe. Mo said it actually felt irresponsible to willingly stay in a place that so many people would have left given the choice. At the time of the coup they had already planned a month long trip through Ukraine, Poland, and Germany during August. Rather than just taking a vacation she decided to actually leave Turkey for good. It was during the weeks leading up to their trip that Mo and her partner decided to part ways. She would go to Korea or Japan to look for a better paying job while he stayed in Turkey to work with refugees.
During the three weeks after the coup Mo and her partner disassembled the life they had built in Turkey. In addition to the sadness of leaving new friends, there were also financial stresses. She closed her bank account and had to pay a hefty Western Union fee to wire the money to the US. To make matters worse the coup meant the Turkish lira had plummeted. They both lost quite a bit by making the transfer after the coup, this is what economists call currency risk. Thankfully, the liquidity from the personal loan made it possible for her to actually leave Turkey.
Mo and her partner spent the month of August traveling. In addition to visiting the lands of her ancestors, Mo also took this time to look for a job. While in Izmir one of the few English speaking channels on TV was a Japanese culture channel. Coincidentally Japan has some of the best paying English teaching jobs. After so many months learning about Japan through various TV programs it felt natural to focus her job search there. In late August she landed a job in Nagoya, Japan starting in December. That was still over three months away.
Mo’s first major decision done exclusively on her own was what to do between September and December. Rather than go back home she looked for a work exchange program through WorkAway. She was able to find one near Munich, Germany. In exchange for room and board Mo did light cleaning and looked after twelve year old triplets. The six weeks in Munich were a well-needed rest after the excitement of fleeing Turkey and the sadness of ending a long term relationship. Once her six week commitment was over she returned to Los Angeles for a month-long stay with family and friends. During this entire time she continued to make monthly payments and amazingly her debt did not rise even though she had no income and just enough in savings to see her to Japan.
In November for the second time in 2016 she left the United States to move abroad. This time she moved to Nagoya where she had her best paid job to date. Thanks to it she began to make progress on her debt. However, progress came slowly. Her roommates were much less frugal than her. They were used to pricey meals and top notch wine, both of which she also enjoyed. But the bigger problem with Nagoya was that she disliked the inflexibility of her job, plus the city hardly had any of the culture she had wanted to see in Japan.
After a couple of months she decided to break her year contract and look for a better option. Moving within Japan wasn’t expensive, but there were a few financial repercussions. She lost about $250 on her security deposit at the sharehouse where she’d been living and also lost almost $700 on her plane ticket to Japan. The company had initially reimbursed her for this, but upon breaking the contract this money was retracted. However, these financial drawbacks were not enough to keep her in such an unfulfilling position.
Now What? – Fine tuning finances as an expat
Mo is now living in Kanazawa, a smaller city at the base of the Noto peninsula. Her friends are on the same frugal brainwave as her and the city is steeped in culture. When I met up with Mo in October I felt so proud of her obvious sense of empowerment. For the first time in her life she lived alone in an adorable apartment. She glowed with independence and pride as she gave me a tour through her city.
I hadn’t been there for two hours when we started talking about finances. Over the next couple of days she brought me up to speed on her loan, the credit card debt, and her current payment plan of $500 per month. It wasn’t until the fourth day she remembered that earlier that year her grandmother had passed away and left her $8,000. She had mentally put this money out of mind for emergencies, but I encouraged her to consider using it.
It was wonderful for me to be able to give Mo ideas on how to move forward toward her goal of being debt free while building savings. Earlier this year Mo had inspired me to reconsider my dream of living abroad and now she was giving me an opportunity to be of service; there’s a reason I love this girl! I listed out a few possible options to deal with her debt, her need for an emergency fund, and getting started on retirement saving. When I left we had lined out the following options:
- Solution One: Transfer debt to a 0% interest credit card for 18 months. Continue making $500 payments – the minimum to the 0% credit card and the remainder to the personal loan. Leave inheritance in US account. Once the personal loan was paid off she could direct the entire $500 towards the credit card balance.
- Solution Two: Use inheritance to pay off the entire debt and save any remaining money as an emergency fund. From there on the $500 going towards debt could go towards further savings
- Solution Three: A combo of both of the options above
Less than a week later Mo said she had decided to pay off the remaining personal loan of $2,000 and move the credit card balance of $4,000 to a 0% account. This means she’ll make fixed monthly payments of $190 and be done in 21 months. This leaves her with $6,000 from the inheritance that can be invested in the stock market, saved for an eventual move to a different country, or used in case of emergencies.
Even if Mo had not received an inheritance she would have made quick progress on her goals. After years of barely getting by she is a pro at frugal living. Before she and I talked, her initial plan was to leave the inheritance untouched as a safety net. I’m glad that I was able to share that it doesn’t make sense to pay up to 23% in interest on credit card debt when she has money in a savings account earning at most 1% in interest.
One of the nuisances of living and working abroad is dealing with currency exchanges and bank transfer fees. In addition to the credit card debt and the personal goal, she also has a credit card she uses whenever she doesn’t carry cash. When she arrived in Nagoya her job instructed her to open an account with the Japanese Post Office for her paychecks. Because she uses a credit card that charges dollars to her American account, she needs to transfer yen to her US account for a hefty $25 fee regardless of the amount transferred.
In addition to the fee, she also has to go in person to the Japanese Post Office and deal with a long bureaucratic process. This whole thing happens every month. I suggested she get a Japanese credit card, or leave a large amount of cash in her US account to pay off her monthly charges. That way she would only have to transfer out of her Japanese account every couple of months. This could be a good use for the money left from her inheritance.
Mo has always been very frugal, but reality sets limits on how far frugality can take someone. Where she lived and her chosen profession meant she lived most of her adult life at the poverty level. Eventually working in theater petered out financially, but she learned a lot from her experiences there while proving her skills in community theater. Living in San Francisco was incredibly expensive, but that experience was her first move out of her comfort zone and it made life abroad seem a little more accessible. Those two things made her first decade as an adult difficult. The lessons learned during this time can make the next 4-5 decades easier financially.
During our interview she shared that had it not been for her partner’s insistence and support she would have never moved abroad. Once abroad life was so much more fulfilling. It felt possible to decide to stay abroad even when he was no longer in the picture. It was as if she no longer needed training wheels or to prioritize peace keeping over her own wants.
She has a lot of big decisions coming up and she’s carefully considering what’s in her best interest. In about six months Mo’s contract is done in Kanazawa and she hopes to find a job in Tokyo. Goals beyond that are a lot more fluid depending on what opportunities arise. Regardless of what she decides to do next, lack of money is no longer a valid reason to write off a dream.
P.S. Both Mo and I turn 30 this month! Here we are by a tiny altar in beautiful Kanazawa