For years, juggling income earned in both Korea and the United States felt like navigating a financial tightrope. After teaching in Korea and simultaneously starting to earn money from U.S.-based companies, managing finances across two countries became a significant challenge. Initially, I lacked a clear strategy for effectively handling income streams in different currencies and financial systems. This complexity not only added stress but also hindered my ability to make sound financial decisions.
My journey towards financial clarity began when I recognized the need for a structured approach to manage my “Korean money” and “American money”. Like many expats or individuals with income sources in multiple countries, I struggled with the practicalities of currency exchange, budgeting, and saving across borders. The turning point came when I sought guidance from a money coach, who provided invaluable insights into simplifying my cross-border finances. The most impactful advice I received was surprisingly straightforward: keep your Korean money separate from your American money. This simple yet profound shift in mindset revolutionized my financial management, leading to greater control, improved savings, and reduced financial anxiety.
Initially, when I moved to Korea in 2013, my financial picture appeared relatively simple. My primary income was my teaching job. However, the reality was complicated by a significant debt burden – $60,000 in student loans. Out of necessity, the majority of my Korean salary was immediately directed back to my U.S. bank account to meet my monthly loan obligations. Living abroad while managing U.S. debt required careful budgeting and constant currency conversion calculations, a process that often felt overwhelming.
After a couple of years in Korea, my financial situation evolved as I started freelancing as a writer and editor for a content marketing agency. Suddenly, I had a second income stream originating in the U.S. While initially modest, this American income became crucial for supplementing my loan payments and affording imported goods that were either unavailable or significantly more expensive in Korea, such as specific toiletries and comfort items from home. Managing these dual income streams, however, soon revealed its own set of challenges.
The Pitfalls of Mixing Korean and American Money
As income flowed into bank accounts in both Korea and the U.S., I realized I was not effectively managing my earnings. Despite successfully paying off my student loans ahead of schedule while living in Korea, I developed poor financial habits. I often relied on credit, carrying over balances that negatively impacted my credit score and increased financial stress. There were times I overspent in Korea, leaving my local bank account depleted before my next paycheck. To cover these shortfalls, I would resort to ATM withdrawals, transferring money – whether from my Korean earnings or U.S. freelance income – back and forth between accounts more frequently than I’d like to admit. This constant movement of funds between countries, without a clear strategy, was a recipe for financial confusion and inefficiency.
My turning point came when I acknowledged my lack of financial responsibility and decided to take decisive action. I recognized that continuing to manage my finances like a student was no longer acceptable. It was time to establish a more mature and organized approach to handling my money, especially considering the complexities of managing finances across two countries.
Separating Finances for Clarity and Control
Seeking professional guidance, I hired Joe Maddux, a money coach, whose primary recommendation was transformative: keep my Korean money and my American money separate. This simple strategy fundamentally changed my perspective on finances, impacting my saving, spending, and debt repayment habits.
Joe helped me identify costly financial mistakes I was making, particularly regarding the movement of money between countries. I hadn’t fully appreciated the financial drain caused by currency exchange rate fluctuations. When I first arrived in Korea, the exchange rate was almost one-to-one, with $1 equaling approximately 1,040 Korean Won. This near parity made mental conversions straightforward.
However, by 2024, the exchange rate had shifted significantly, fluctuating between 1,300 and 1,400 Won per dollar, often settling around 1,350. Each time I transferred money to the U.S., I was essentially losing value due to the less favorable exchange rate. This felt like a constant financial leak. Moreover, regardless of the transfer method, I consistently lost a percentage to exchange rate variations and bank fees. These seemingly small losses accumulated over time, significantly impacting my overall financial health.
krissi driver poses in front of three mirrors hanging on a pink wall
Furthermore, mixing funds blurred my financial accountability. The mindset of having income streams in two countries inadvertently justified inconsistent budgeting and, at times, overspending. Each time I moved money back and forth without designated purposes, I undermined my financial discipline and made it easier to rationalize poor spending choices.
Practical Strategies: Budgeting and Sinking Funds
To regain control, Joe and I collaborated to create a detailed budget for my Korean expenses. I implemented “Financial Fridays” where I review my weekly spending on my Korean credit card and pay off the balance immediately. If I exceed my allocated budget, the overage is deducted from the following week’s allowance, creating a direct and immediate sense of financial accountability. Surprisingly, these Financial Fridays have become a positive ritual, reinforcing my commitment to staying within budget.
Another game-changing concept Joe introduced was the sinking fund. This involves calculating annual expenses for predictable costs and proactively saving for them throughout the year. This approach transformed saving from a chore into an empowering activity, as I could see how targeted savings contributed to achieving specific goals, like travel or larger purchases.
Now, any leftover “Korean money” can be strategically allocated. It can be sent to my U.S. accounts to accelerate credit card debt repayment or kept in Korea as savings for future needs. While the temptation to spend is always present, the simple act of keeping my Korean and American money separate has provided a clear framework for financial management. This separation has been instrumental in taking control of my financial life and moving closer to genuine financial freedom, proving that sometimes the most effective solutions are also the simplest.
