How much money should an International Teacher have in the bank?

Hopefully your money is in a high interest savings account instead of a jar somewhere! Photo cred

I have read a lot about an “emergency fund”  in various  finance blogs and they seem to agree that a rule of thumb is to have three to six month’s worth of money available (some even say 9 months to a year) in the bank. That means, three months of rent, utilities, food, fun, and miscellaneous money.

But what does that mean for an international teacher? What does that mean if I say that I am so worried about retirement and paying off my student loans?

A little background: my job as an international teacher in Venezuela currently pays for my rent, electricity, water, half of my internet, and my health insurance. I spend about $300 a month on food, transportation, and my half of utilities.

I could stop paying into my student loans since my plan currently says I am required to pay $0 per month and I could stop paying into my retirement if it were an emergency situation. I have no other debts to worry about.

Does that mean I should only have $900 or $1800 in the bank? That seems really low to me!

Some things I also plan for:

  1. Escape: What if the situation in Venezuela became too unsafe and I needed to leave tomorrow? This thought is really scary because I just read an email from the embassy that says there are 50% fewer flights from Venezuela to the US as compared to six months ago. I just looked at flights leaving tomorrow and there is a flight from CCS to MIA for $927USD. That would at least get me out of the country. But, if I wanted to get all the way home to PDX the cheapest flight leaving tomorrow would be $1584USD. Lets just say $1600 to be safe.
  2. Vacation: Many people wouldn’t consider a vacation fund to be a part of one’s emergency fund, however to live in a place like Venezuela, I like to get away from time to time (basically, every vacation that is 4 or more days). I actually have separate accounts that I save for specific big trips I have planned (currently two “savings goals” in SmartyPig for Machu PIchu and Europe).  I like to set aside a smaller amount for the smaller unplanned vacations. The cheapest international flight I can find for my first break is $466 (CCS to BOG). Plus $100 per day (food+ hotel+entertainment). Why not round up to $1000? We are already at $4400 btw.
  3. Wedding: My inner optimist says that I will get married one day. Considering that every year I seem to care less about potential wedding trappings I have an online savings account labeled “Wedding” where I stashed $1000 and it currently accrues .75% interest. This fund combined with my vacation fund would allow me to elope, do paperwork, and have a little salsa dance party in someone’s backyard. Haha. I had this money in a CD before, but the short term CD rates I’ve seen are earning less than my savings account. So that is another $1000.
  4. Buffer: I also have a second account with a brick and mortar bank that gives me no perks other than easy access to my money when I’m home or traveling. I have my paychecks directly deposited here, and I take my monthly allowance for living expenses out of this account. I try to keep $1000 in here at all times so I don’t get charged any fees and to cover any automatic withdrawals from credit cards (which I usually only use when I’m traveling or at home over the summer).

So how much money should I have in the bank according to my little guidelines I’ve listed above? $6400.

After I have that amount saved I try to either make an extra payment on my student loans or an extra deposit into my retirement account.

Other people think about saving additional money for a down payment on a house or having children.   While I would like to do both of these things, I don’t see them in the cards for myself anytime soon, so I don’t save for those goals at this point.

I know travel shouldn’t really be such a high priority for someone who hasn’t paid off all of their student loans and who has less saved for retirement than the amount recommended (due to college/grad school/low paying jobs), but since people tend to develop heart problems and Alzheimer’s in my family, I’m enjoying life to its fullest!

Like I always say, I’m not a certified financial planner so pay no attention to my personal not-so-secret savings plans! haha

Please comment: How much cash do you like to keep easily available? How did you figure out that number? Do you use a brick and mortar bank, online banking, or a combination of both for your emergency fund?


2 responses to “How much money should an International Teacher have in the bank?

  1. Stop it! You think too much! Save as much as you can, travel as much as you can. Work as hard as you can. Simple. At least you don’t have a house payment or pay for your insurance. Much love darling!


  2. Ann Marie, I would love to not think about it, but I’m on a pretty tight budget! I like to have a plan! People in my family are notorious for not budgeting well. I like to be the exception to the rule. If I don’t pay my own way, it doesn’t get paid. I love to travel and have fun as much as the next person, but if it isn’t in my budget I do my best to avoid it.


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