Teaching overseas offers a unique opportunity to combine your passion for education with the chance to explore new cultures and potentially boost your savings. However, many teachers mistake the listed base salary for the actual savings potential and don’t fully take into account the cost of living in a new location. This can lead to missed opportunities to accelerate their progress towards financial goals like retirement, housing, or investments.
- Your Wage is your primary source of income, the salary you earn from your teaching job.
- Your Savings potential is the amount of money you can realistically set aside after deducting your living expenses from your total income, which includes your wage and the value of any benefits.
Compare what your savings currently are
Understand Your Income/Expenses
Domestic schools usually pay a regular amount each month.
Work out what your expenses are to calculate your savings potential
(Income + Benefits Value) – Expenses = Savings Potential
To get a clearer picture, create a detailed monthly budget. Use a spreadsheet or budgeting app to track your income and expenses. Be realistic about your spending habits, and factor in some buffer for unexpected costs.
Compare what your projected savings are
Understand Your Income/Expenses
- Salary: This is your primary source of income. Salaries vary widely depending on the country, the type of school (international, public, private), your qualifications, and your experience. It’s crucial to look beyond just the salary figure, as a high salary might be offset by a high cost of living!
- Benefits: Many overseas teaching positions offer attractive benefits packages, which can significantly impact your savings potential.
Search Associates registered candidates can see this information for each school at a glance.
Evaluate Your Anticipated Expenses
Housing: This is often the biggest expense. If housing is provided, this can drastically increase your savings. If not, research typical rental costs in your chosen location.
Transportation: Factor in the cost of getting around. Will you need a car, does the school provide a bus, or can you rely on public transportation?
Food: Research the cost of groceries and eating out. In some countries, eating local food can be very affordable.
Utilities: Some schools even cover utilities like electricity, water, and internet, further reducing your monthly outgoings
Visa and relocation costs: Factor in the expenses of obtaining a visa, moving your belongings, and settling into your new location. These may be offset by the school.
Key Factors That Influence Savings
Location: Countries with a lower cost of living and competitive salaries offer the greatest savings potential.
Benefits package: A generous benefits package can significantly reduce your expenses and increase your savings.
Lifestyle: Your spending habits will play a major role in how much you can save. A modest lifestyle can greatly increase your savings potential, even with a moderate salary.
Salary: Higher salaries generally lead to greater savings potential, but the cost of living in that location is also very important. A high salary in an expensive city might yield less savings than a lower salary in a more affordable location.
While your teaching salary in an international school, might be numerically lower than in a major city at home, consider that rent for a comparable apartment could be 60-85% cheaper.” (Based on cost of living comparisons). Groceries, transportation (public transport is often incredibly affordable), and utilities are also significantly less expensive. Dining out at local restaurants can cost a fraction of what you’re used to paying at home. Your dollar will go much further day-to-day.
Tools and Resources
Online cost of living calculators: Websites like Numbeo and Expatistan can help you compare the cost of living in different cities. Eg.
Cost of Living Comparison Between Melbourne and Zagreb 
| Indices Difference |  |
|---|---|
| Cost of Living in Zagreb is 25.3% lower than in Melbourne (excluding rent) | |
| Cost of Living Including Rent in Zagreb is 31.8% lower than in Melbourne | |
| Rent Prices in Zagreb are 46.5% lower than in Melbourne | |
| Restaurant Prices in Zagreb are 21.4% lower than in Melbourne | |
| Groceries Prices in Zagreb are 36.8% lower than in Melbourne | |
| Local Purchasing Power in Zagreb is 35.2% lower than in Melbourne. | |
Restaurants
|
Melbourne Edit |
ZagrebEdit |
Difference |
|---|---|---|---|
| Meal, Inexpensive Restaurant | 28.00 A$ (15.73 €) |
18.69 A$ (10.50 €) |
-33.2 % |
| Meal for 2 People, Mid-range Restaurant, Three-course | 120.00 A$ (67.41 €) |
106.81 A$ (60.00 €) |
-11.0 % |
| McMeal at McDonalds (or Equivalent Combo Meal) | 15.00 A$ (8.43 €) |
14.24 A$ (8.00 €) |
-5.1 % |
| Domestic Beer (0.5 liter draught) | 12.00 A$ (6.74 €) |
5.70 A$ (3.20 €) |
-52.5 % |
| Imported Beer (0.33 liter bottle) | 12.00 A$ (6.74 €) |
7.12 A$ (4.00 €) |
-40.7 % |
| Cappuccino (regular) | 5.49 A$ (3.08 €) |
3.74 A$ (2.10 €) |
-31.9 % |
| Coke/Pepsi (0.33 liter bottle) | 3.95 A$ (2.22 €) |
4.91 A$ (2.76 €) |
+24.1 % |
| Water (0.33 liter bottle) | 3.58 A$ (2.01 €) |
3.74 A$ (2.10 €) |
In conclusion, you would need around 6,480.1A$ (3,640.3€) in Zagreb to maintain the same standard of life that you can have with 9,500.0A$ in Melbourne (assuming you rent in both cities).
Budgeting apps: Apps like Mint or YNAB can help you track your income and expenses.
Expat forums and communities: Connect with other overseas teachers to get firsthand insights into their financial experiences.
Use AI: Use a prompt like… “Illustrate Savings Potential with Realistic Financial Scenarios for international school teachers coming from “Your City” (with a masters degree and 8 years of experience): Create hypothetical monthly budgets showing income, typical expenses in “Your City”, and estimated expenses in the overseas location (factoring in the lower cost of living and benefits). This will visually demonstrate the potential for increased savings.
Focus on Disposable Income: Show how a lower gross salary, when combined with significantly reduced living costs and valuable benefits, can result in a higher amount of disposable income available for saving and discretionary spending.”
Scenario 1: Teacher in Melbourne, Australia (Master’s, 8 Years Experience)
-
Gross Monthly Salary (AUD): $8,500 (Based on average salaries for experienced teachers in Melbourne with a Masters Degree)
-
Gross Monthly Salary (USD Equivalent – using an exchange rate of 1 AUD = 0.65 USD): $5,525. (All salaries are in USD on the Search Associates database for ease of standarisation).
-
Monthly Expenses (AUD):
- Rent (1-Bedroom Apartment in City Centre): $2,200
- Health Insurance (Private, after any public subsidies): $150
- Public Transport (Monthly Pass): $190
- Utilities (Electricity, Gas, Water, Internet): $250
- Groceries: $600
- Student Loan Payment (if applicable, converted to AUD): $300
- Discretionary Spending (Entertainment, Dining Out, Hobbies): $700
- Savings: $1,110
-
Total Monthly Expenses (AUD): $5,390
-
Disposable Income (After Expenses – AUD): $3,110
-
Monthly Savings (USD Equivalent): $721.50
Scenario 2: International School Teacher in Shanghai, China (Coming from Melbourne – Master’s, 8 Years Experience)
-
Gross Monthly Salary (USD Equivalent): $5,000 (A competitive salary for an experienced international teacher in Shanghai)
-
Monthly Expenses (USD Equivalent):
- Rent: $0 (Provided free by the school)
- Health Insurance: $0 (Provided free by the school)
- Local Transport (Metro, Bus): $40
- Utilities (Electricity, Gas, Water, Internet): $100 (Often lower cost or partially subsidized)
- Groceries: $300 (Lower cost for local produce and goods)
- Student Loan Payment (if applicable): $300 (Assuming this remains the same in USD)
- Discretionary Spending (Entertainment, Dining Out, Travel): $900 (Increased due to lower cost and travel opportunities)
- Savings: $3,360
-
Total Monthly Expenses (USD Equivalent): $1,640
-
Disposable Income (After Expenses – USD Equivalent): $3,360
-
Monthly Savings (USD Equivalent): $3,360
Visual Demonstration of Increased Savings (USD Equivalent):
Despite a slightly lower gross monthly salary in USD equivalent, the teacher moving from Melbourne to Shanghai experiences a notable increase of $688.50 in disposable income each month ($3,360 vs. $2,671.50 USD). The primary drivers for this are the elimination of significant housing and health insurance costs, along with generally lower expenses for transportation and groceries in Shanghai compared to Melbourne’s relatively high cost of living.
Conclusion
This comparison illustrates that even for a teacher coming from a developed and relatively expensive city like Melbourne, an international school position in a location with a lower cost of living and comprehensive benefits can lead to a substantial increase in disposable income and savings potential. The significant reduction in core expenses like rent and healthcare frees up a considerable portion of their earnings, allowing for greater financial security and the opportunity to enjoy a higher level of discretionary spending and savings.
By carefully evaluating your income, expenses, and the factors that influence savings, you can get a realistic picture of your savings potential while teaching overseas. This will enable you to make informed decisions and achieve your financial goals, such as saving for a down payment or retirement, while enjoying a rewarding and enriching experience.