Foreigner's Finances

At orientation before I left for Japan someone asked a question about the exchange rate between Japan and the U.S. The person who answered the question said that we – the people leaving for Japan – were lucky since the yen was doing so well against the dollar. I politely smiled and nodded my head in approval because I had no idea how exchange rates worked and could’ve cared less. I had heard from most American media outlets that the dollar was “weak”, but I had no idea what this meant and didn’t realize how much it could affect my income.

It turns out, a weak dollar is a huge gain for any American working abroad in Europe, Asia, and other places. Just how much of a gain?

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A common tip on personal finance blogs is take care of your stuff to save money. By purchasing quality items that will last a long time, many people can save money on the back end by not having to purchase another item. Financially, it makes sense. But the psychological barrier of overcoming a price tag is often a burden on people’s minds when they visit a store.

Paying for quality items is a battle I’ve always fought with my personal finances. A lack of income in college made it difficult for me to justify paying more for an item, even if that item would have been a better value. If a cheaper alternative exists, I usually pick it, even if it may not last as long or do as good of a job.

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Last week was a momentous occasion in my “adult life” as I received my first paycheck as a salaried employee in my first job out of college.  My previous job was an hourly rate and the amount of hours fluctuated drastically from one week to the next. This created a lot of unnecessary worry and wasted thought as I was constantly wondering how much my next paycheck was going to be.

It was also a huge pain for budgeting and savings. I didn’t have many monthly bills like water, gas, or rent, but I could never settle on a set percentage for savings because of the paycheck fluctuations. I would wind up looking at my bank account the day I got paid, and just choosing a random amount to put in my savings account.

With the salaried paycheck, every month’s pay will be the exact same. Once I figure out my spending next month and create a savings plan, life will be a breeze and I’ll be able to concentrate my efforts on more important things than arbitrary worries about paychecks and savings percentages.

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Many college grads are starting jobs and receiving a real paycheck for the first time in their lives. However, many have no idea what to do with their money and find themselves wishing they knew how to properly save for future goals, pay off debt, and enjoy their hard-earned cash.

The first step to turning around one’s finances is starting. It’s sounds simple, but it’s incredibly difficult for a lot of people due to the amount of choices available. There are a million banks, savings rates, mutual funds, and asset allocation options available so how can anyone choose the best option?

They can’t.

Having too many choices prevents people from making any decision at all, and this is where a lot of young people find themselves with their money. It’s just sitting in a checking account where it’s not gaining interest, being spent on frivolous items, and never properly saved for the future.

What’s the best choice someone can make with their money? Start early. Starting early is the biggest secret to getting ahead with your finances. By creating a simple financial system you can make your money work for you and get back to enjoying life.

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An old friend from high school recently contacted me and asked for advice and information on teaching English abroad, or ESL (English as a Second Language). One sentence in her message caused me to take a second and think:

“for some reason teaching abroad seems to be very popular lately”

I had never thought about the increased popularity of native English speakers going abroad to teach English, but my friend brought up a good point. Teaching English abroad has become a popular career choice for many people fresh out of college. One could blame a dismal job market or the apprehension of graduates to constrict themselves to a career, but I believe the majority of people who choose to teach English abroad were persuaded by other reasons. Let’s take a look at three factors that have led to an increase in native English speakers choosing ESL jobs.

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My financial system in America was a bit hectic. With multiple bank, savings, and investment accounts I felt like I was failing to automate my financial life. I’d learned a lot about personal finance over the past year, but I always struggled to simplify my accounts. As soon as I found out I would be moving to Japan, I didn’t try too hard to correct my confusing financial situation.

Creating a financial system can be a difficult and time-consuming practice for people when they first move abroad. Moving to a new country is similar to starting a new life from scratch. Housing, food, medical, and visa are just some of the concerns you must wrap your head around when you make the move. Adding the concerns of money and savings to that list can be an overwhelming experience.

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Transitioning my life to Japan has been something I didn’t have to do in 2007. I was a student and only here for two months so I was more of a temporary visitor. However, now that I work here I need everything a normal citizen would have, minus the jet black hair. Bank account, insurance, identification, and taxes are some of the items I’ve had to sort out since arriving. I’ve also signed up for a Japanese Post Office account. Yes, a post office account.

This was suggested before I arrived because the post office in Japan is a little different than in America. Where in America you mostly find grumpy workers telling you that stamp prices have once again gone up; in Japan the post office acts as a place to send letters, and as a bank.  Since the post office is run by the government, I can find any one of the 2,560 post offices across the country and access my money, whereas my local bank account only allows me access to my money in my hometown.

I find my post office account to be a good thing. I’m treating it as untouchable and forced savings. Forced savings might not sound good to everyone, but I have certain savings goals in mind that I’d like to accomplish in the next two to five years and having an untouchable savings account will allow me to accomplish these goals. The post office is the physical barrier that I need to separate my checking account – my discretionary spending – and my savings account – money for future goals.

It should be a pretty painless act. A day or two after I get paid I will trek over to my bank, withdraw the amount I want to save, walk across the street, and place that money into my post office account. It’s an easy way to separate checking and savings and avoid tempting myself by leaving extra money in my checking account that would probably be spent on candy or convenience store sushi (incredibly delicious).

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I was an avid credit card user in America. I had two main cards and signed up for a third before I left for Japan. I always paid the minimum and used them solely for organizational purposes and rewards. I loved putting a majority of my purchases on my credit card so that I could sign into mint.com later and see all of my purchases separated into different spending categories. Previously, as a debit card user, I would constantly see my checking balance fluctuate and I came to love that the amount in my checking account would remain untouched except for once a month because of credit cards.

I was still in college and never had one area of spending that was significantly higher than others, so my main card was a generic cash-back credit card. Even though I received small checks once every couple of months, it was still liberating knowing my credit card company was essentially paying me to use their card. I had plans to get an airline-sponsored card so I could start racking up frequent flyer miles and travel the world cheap.

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