I would LOVE to live in another country some day as an expat. This sounds like an amazing experience and some great financial lessons here!

3 Financial Lessons I Learned as an Expat

I would LOVE to live in another country some day as an expat. This sounds like an amazing experience and some great financial lessons here!

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.
Me: [silence]

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?
Me:  No.
Ian: [silence]

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.

FINAL THOUGHTS

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.

What ways have you benefited financially from challenging yourself to do new things?

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16 Responses

  1. When I bought my house at the age of 22… that was outside of my comfort zone!

    I had a few roommates coming in to rent from me, so it’s been very good to me financially. I’ve brought in about $25k in rent payments in the past 2 years and been able to pay off my student loans and car loan.

    Also, I’ve became more handy in the process 🙂

    Thanks for sharing.

  2. You’re absolutely right about challenging your comfort zone! Looking back, I can’t think of one incident where I regret moving out of my comfort zone. And yet I still don’t ‘push the envelope’ enough.

    1. I have a tendency to embarrass myself, so I can definitely think of times I regretted it, lol. But really, it’s almost always worth it to try something new and get out there.

  3. Going to college as an adult and receiving my degree in my early 40’s was new to me, and it definitely benefited me financially.

    Thanks for a peek at this interesting time in your life and the great lessons, Kathryn!

    1. My older sister recently went back to college and I’ve reflected how difficult it would be to go back to school after having so many other life responsibilities. I have a lot of respect for those who have the motivation to do it!

  4. Like yourself, I travel a lot but not as an expat. Although it certainly is more expensive to always be on the goal, the monetary rewards are indirect. I’ve made a lot of contacts in my travels that have benefited me and my business.

  5. This was an awesome read!!! I have always thought about living overseas but haven’t had the chance to jump on an assignment. I can’t believe you lived in Shanghai for a year and then Korea shortly after that. That must have been an awesome adventure 🙂 I definitely want to take more chances in life and experience things like that. Thanks for an awesome recap!!!

    1. It was quite the adventure and we were so lucky that our kids were young enough that it wasn’t a huge transition for them for the first two moves (the move back to the U.S. was tough though).

  6. Interesting. We keep getting on the cusp of an international assignment only to change directions. It still might happen. Any tips for adjusting? I’ve run projects abroad where I’ve had to stay as long as a month but beyond that I don’t have a frame of reference.

    As for the question, for me it was he simple act of changing companies in spite of being told I worked for a company people never left. In retrospect my prior employer laid everyone off an closed that site. Here I am at the next employer ten years later and seven promotions later.

    1. My tip for adjusting is to have an open mind about doing things a different way than what you’re used to. This includes not only DOING things, but buying things, eating new things, etc. The most miserable expats were the ones that refused to adapt to the culture. It’s an AMAZING experience.

  7. What a great post! My experience has been the same in that I’ve experienced the most financial success by moving outside of my comfort zone. Now that I’m feeling comfortable again, it might be time to rock my own boat.

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