|I recently banked some $ with a friendly bet on Floyd 'Money' Mayweather|
After such extravagances as taking a Christmas vacation on the bus and having my parents visit me, my mind has inevitably turned to saving for a rainy day. As an English teacher, unless you work in a high pay high pressure job (e.g. in the middle east), you're unlikely to be earning so much that you don't have to think about saving. I've heard many stories of EFL teachers becoming 'trapped' in the country they are working in due to the pay to cost of living ratio. Paying for plane tickets isn't easy in those places where Ryanair doesn't operate.
I wrote a finance post last year, and want to focus on personal spending this time to give you a better idea about whether you are better off running around a classroom or punching numbers in an office. Just as a note, I'm going to refer to prices in Mexican pesos (20 to the pound), or US Dollars as it's the most universally known currency. At the time of writing $1 is worth around 15 pesos.
Cheap or chaffa?
Mexican goods (especially electronics) are not known to last long. If you get six months out of a speaker or a clock that's not bad. People here are concerned with price, not value. I remember once asking in a shop for a recommendation on headphones and the guy just went through the prices. "Which ones are good?" I enquired. He ignored my question and just kept on giving prices, "These ones are 50, these ones are 80, these ones are 100" and so on.
Anything that requires time or labour is cheap here. Artisan goods, clothes, building work and services. Anything that requires quality control or quality parts, doesn't come cheap or just isn't available. One thing that certainly is reasonably priced here, is food. You could eat out three times a day for 100 pesos ($7), or alternatively buy a weeks supply of food (maybe without drinks or meat) for the same price.
Essentially, foreign made goods and long distance transport are relatively unaffordable. Due to high petrol prices, even long distance coach journeys have become untenable for many Mexicans. Owning a car is certainly a luxury that only middle class wage workers can afford. Import duties and foreign prices are comparatively high, so unless you want a clapped out VW Beetle or a gas guzzling pickup truck, you have to pay over the odds for a crappy Chevy or Jeep.
Flights are not the same as in Europe either. There are few budget routes as United and national carriers have the Americas locked down with expensive poor quality options. If you want any genuine foreign brand named goods, there aren't any discount websites or TK Maxx stores to raid, you pay western prices with a non-western wage. It always amazes me that everyone here wears genuine branded trainers. They cost around 1,000 pesos - the average weekly wage. Imagine spending that on a pair where you are!
If only I had stayed in advertising. I could have been scratching around for a $2k pay rise and moaning about certain directors or managers holding me back. That said, I certainly wouldn't moan about a $2k pay rise here! I earn around US$1,000 net per month. which is actually a very liveable wage for a family here in Mexico.
Added to this, I receive a savings plan payout of around $3,000 every July, and a Christmas bonus of around $1,000. The university provides retirement and housing benefits for when I'm old and wrinkly and I receive free healthcare through my social security contributions.
I also teach some private classes which net me around $100 per month, providing they're not cancelled.
(as a % of net income)
- Rent: 10-15% - What a difference a country makes. Rent is cheap here but I used to pay around 40% of my income on housing in England.
- Bills: negligible - I pay $8 or so for Internet, $3 or so for phone credit, $8 or so for gas and nothing else. I don't even have a TV subscription to pay for.
- Entertainment: negligible - Music and movies are all ripped off here anyway, so the fact I download them, just means that Juan on the street doesn't make his 10 pesos off me. A laptop and a kindle provide all of my multimedia needs.
- Going out: 10% - I spend a little on extra curricular entertainment shall we say. A beer is around $1 and concerts and events are often put on by the municipal government.
- Food: 10-15% - If you stick to the local cuisine (tortillas, rice, and no fancy foreign foods) you can eat very cheaply. The Monday market is a great place to pick up fresh goods, and dry goods are reasonably priced in supermarkets. This figure includes meals out too. It's so cheap to eat out, it's no wonder none of my students can cook.
- Travel: negligible. I spend around $1 per school day on buses and $1-2 on taxis at the weekend. This doesn't take into account the longer trips that I take.
- Shopping: 0 - Luckily, there aren't any good shops where I live. I don't tend to hanker after many gadgets, I can't buy any clothes that fit and any internet shopping probably won't arrive because of the crappy postal system.
- Extras: 10% - My main extra expenditures include a yearly working visa payment ($300), gym visits, street charity, and owning a cat. Around once a month I spend $100-150 on a weekend away at the beach or in the mountains.
I can generally save a third of my paycheck which adds to the bonuses I receive to form a decent amount. In fact the amount of money is around the same I would have saved if I was working in the UK.
However, when your travel obligations include pricey long haul flights with a loving family but very expensive beers at the end of them, accumulating wealth is a little harder as an English teacher. It would certainly be easier if we didn't want to blow all of our hard saved money on travel between jobs, but then there has to be some perks to this gig right? I would say the keys to saving when abroad are the ratio of your rent to your income, and to isolate yourself from the consumer culture and internet shopping capabilities of the western world.
OK, I'm off to count the pennies, which incidentally I have an abundance of after a shop gave me 450 pesos worth of change in coins.
A tall man with full pockets.