It was just another busy tax day at the office in February 2011. I was sitting at my desk completing some client tax returns when I received a text from my husband.
Ian: What would you think about moving to China?
Me: Can you maybe give me a call?
Ian: Oh, sorry. I’m busy with meetings all morning.
And so it was the beginning of our expat assignment in Shanghai. (Note to husbands everywhere: don’t text your wife such things, just wait until you can call, yikes!). We accepted the assignment after discussing it…of course, not through text messages.
I didn’t even have my own passport. I had never even been outside the country, except to Canada (and driving up to Toronto hardly counts when you live in Michigan). We had two little kids at the time; our daughter was 3 and our son was only 9 months old.
I was nervous and scared.
I didn’t even know anyone that had been an expat and I had no idea what to expect from living abroad. This was possibly the most courageous thing I’ve ever done in my entire life. Without a doubt, it was the one single decision that had the largest impact on our finances.
I’ve already shared how my mindset changed during our expat assignment in Shanghai and then our subsequent assignment in Seoul. In addition to changing my perspective on money and life, it also changed our financial situation significantly.
I learned some valuable lessons while living abroad, many of which I’m convinced I wouldn’t have effectively learned otherwise.
1. SUCCESS LIES OUTSIDE YOUR COMFORT ZONE
When your comfort zone is about 7,000 miles away, it’s no longer an option to stay in it. As an introvert, it was a big step to move away from my life as I had known it. We had lived in Michigan for nearly eight years by this point and we were well-established in our home, church, relationships, and careers.
In China, I didn’t know anyone outside my family, couldn’t read or speak the language and wasn’t even sure where I could go to find food I recognized at first. Eventually, even this foreign place became a new comfort zone for me. I learned to love my life in Shanghai and wanted to stay forever. And then, after just a year, I received another text from my husband:
Ian: Do you want to move to Korea?
We lived in Korea and learned to adapt to another country and culture for another three years before returning to the U.S. Seoul became our home and we learned so much while living there.
By experiencing new cultures and ways of doing things, I realized that many things are done simply out of cultural habit rather than truly being the best way to do things. Case in point: in Shanghai, everyone uses their umbrellas when it’s snowing. And why wouldn’t they? It’s basically just like rain! From a financial perspective, the American culture encourages a buy-now-pay-later attitude that encourages materialism and promotes debt. It was simply stepping away and looking from a different perspective that encouraged me to challenge the things we do as a society and find a better way.
Because we were willing to step outside our comfort zone (both emotionally and physically), we were able to save more than ten times the amount we would have saved if we hadn’t accepted these challenging assignment. In addition, this gave me the confidence to do other things that I previously thought were too scary or difficult.
Perhaps financial success is waiting for you outside your comfort zone. Consider starting that new job, seeking that promotion or starting your own business.
2. HOW TO HANDLE A WINDFALL
Despite me no longer working (I was mainly working during tax season only at this time), we made a lot more money overall as expats. We received a pre-assignment bonus plus a post-assignment bonus, a monthly premium and cost of living allowance. In addition to that, we rented out our home in the U.S. and sold our cars. Our housing and transportation were covered by the company.
This combination of higher income and lower expenses gave us a windfall of sorts. Having a significant influx of money in a short period of time pushed me to get our finances in order and start a financial plan. I realized the positive long-term benefit we had to gain through learning to save and invest. We set goals for our money and tracked our progress.
A windfall, even a small one like a tax refund, provides an opportunity to analyze your dreams and determine how money can help you achieve them.
If you don’t have a plan for your money, now is the time to start. Don’t wait until you have a windfall because it’s too likely that without a plan it won’t be used toward your real financial goals.
3. MINDFUL SPENDING MAKES A BIG IMPACT
Chinese groceries stores are quite the shock to a foreigner. They’re generally dirty and smell because of the dried fish and other unidentifiable animal body parts. Just as shocking are the prices on imported goods.
At the time we lived in Shanghai (about 5 years ago), I documented the following prices:
- $5 for one avocado
- $6 for a box of Honey Bunches of Oats
- $2.50 for 1L of imported milk
- $7.50 for a bag of Hershey’s chocolate chips
- $6 for a 5-lb bag of Gold Medal flour
I learned to adapt to eating fresh, local foods in China and Korea and saved a ton of money doing so as opposed to buying processed, imported foods. The real benefit, though, was that we lived much healthier and wasted a lot less.
In addition to food, not being able to buy something from Amazon and get it within days meant that it was suddenly a lot of work to buy things. Most places required extensive bargaining, especially for things like electronics. It really made us think more about how much we really wanted to purchase items and whether it was worth the hassle. It was great for our bank account.
If you’re struggling with spending, try cutting yourself off from Amazon or online shopping for a while. You could initiate a spending freeze on one certain category, such as clothing, for a month. Or, you could institute a waiting period of several days when buying something to give yourself time to decide whether it’s something that you really want.
The greatest growth usually comes from challenging yourself. It may be as simple as going to networking events and meeting new people. It could be pursuing a new job or a more challenging role within the same company. Perhaps it’s taking a risk with a new business idea. Maybe it’s moving to another state or country like we did.
By taking on difficult things with purpose, you’ll find that you will benefit financially, but also in the skills that it takes to be truly successful.