my journey from negative net worth to financial freedom

Life on $400 a month: Training for Freedom

Life on $400 a month: Training for Freedom

So, living on $400 a month might not sound possible…but here in Korea I’ve found it quite doable.  I’ve been living on about 25% of my monthly income since I moved to Korea 6 months ago.  From day one my intention has always been to save at least $12,000 by the end of my year long contract. That goal has given me purpose.  It’s one of the first steps I’m taking toward reaching my real estate investing (REI) goals. Sacrificing is definitely easy when you’re able to keep your plan and purpose in the forefront of your mind. I take my savings off the top, then take care of necessities, use extra money for extras, then rinse and repeat. Though I don’t have a set budget, this repetitive process helps keep me on target.

Cream off the Top

As an EPIK teacher here in Korea I’m paid once a month ( I think that’s the norm for most jobs here).  My total paycheck generally comes to about $1,700 (USD) or $1,700,000 won.  My gross pay is about $2,000 USD or $2,000,000 won. Though taxes are not taken out of gross pay, things like, pension (50% is my contribution), medical insurance, and a lunch fee are.  One of the cool things about working here is that 100% of my pension (both my contribution and the school’s) is collectible at the end of my contract!  Not to mention other monies like severance pay, exit allowance, etc.

Now, when I receive my monthly paycheck, I immediately take 75% off the top and transfer it to my account in the States. While it sucks that I lose a few bucks along the way to wire fees and exchange rate differences, I’m still able to clear about $1000/month.

Bare Necessities

From my remaining funds I then pay my monthly bills. My electricity bill here is about ($4.00 USD or $4,000 won), gas in the winter ($40 USD or $40,000 won), gas in the summer ($5.00 or $5,000 won)  and cell phone ($60 USD or $60,000). In addition, I spend at the most $40-$50 USD  a month (though usually less) on transportation costs. I walk to my job (middle school) since it’s literally right next door to my apartment and take the bus, light rail or subway everywhere else I need to go. So, that comes to about $150 USD a month. My last necessity – food – is honestly what I spend the most money on.

Extra for Extras

I’m not a big shopper so I rarely buy clothes. Though I do love skincare/body products I’ll usually buy 1 or 2 products – use them till they run out and then re-up. I go to the movies occasionally and go out to have drinks and such, every now and then. The thing I love the most though: eating out. The thing I hate the most: cooking (and washing dishes). So typically in a month my grocery shopping bill might average about $100 USD (maybe). But I’ll probably spend double that, $200 USD, on eating out – I know…. a very bad habit.

Recently, I decided I have to do better. I could save even more if I ate out less and cooked more. This will be a behavior change. So I know it won’t be easy – old, ritualized habits are hard to break. But my life/work here in Korea is not just about saving money. I’m training myself to exist on less – to be happy and comfortable with enough. I’m training myself now for early financial freedom later.

Training for Freedom

Frugality actually comes naturally to me. I don’t have many vices (outside of eating out). I actually don’t like spending money – wasteful spending literally pisses me off. Not to mention I was raised by an accountant who to this day continues to make and follow her own personal budget (love you mommy!). However, I think no matter your starting place, everyone can learn to live on less – especially if you have financial goals and plans you’re committed to.

When I return to the States I’m going to house hack a duplex or triplex (so that my shelter costs are close to $0 – like they are now). Though having a car in Metro Detroit is a necessity, buying a new car isn’t. So I’ll buy a used car under $5,000 to drive around in. I’m going to find a job that’s as close to my house as possible (so that I save on transportation costs). If it’s financially feasible (i.e. if what I’ll make outweighs the additional gas, wear and tear costs I’ll incur) I’ll do Lyft driving on the side. Because I’ll hopefully be better trained on eating out less and cooking more, I won’t blow money unnecessarily on eating out. I’ll also get a cheaper cell phone plan. I’m planning to live on at least 50% of your income. I think for me that’s definitely doable. What’s more, if I’m making $40,000 – $50,000 a year – that’s $20,000 – $25,000 I’m saving in a year. Those savings will then be put to use for REI.

Have additional insights or experiences to share? Please leave a comment below!

Motivating Mantra: “Motivation Over Short Term Urges”

Living on $400 a month here in Korea is doable. Though there are those who do exist (barely) on $400 in the States, that’s of course no way to live (if you have the option). A single person like myself can live on $25,000. My long term motivation is to attain financial freedom by the time I’m 47 years old. So, that’s why I’m sticking to a more frugal lifestyle and learning not to give into short term urges. Not only to get to early financial freedom but to keep it once I have it, as well.

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