Bank Savings Schemes
A good place to start your nest egg is at the bank. Banks offer savings accounts and investment options that encourage savings so that you won’t spend your hard earned won.
Installment accounts are a relatively new feature at most banks and they are designed for saving! These accounts are set up for a designated period of time, between six months and three years. When you sign up for the account a set interest rate is applied to the account. At maturity, the interest is calculated, and you receive your principle plus the money gained from the predetermined interest. Some accounts allow you to contribute freely to the account or simply watch your initial contribution grow. Other accounts require monthly deposits. If you transfer money regularly, the interest rate you receive will be higher than if you make random deposits. You can set up an automatic deposit from your spending account to your installment account, so you never miss a chance to save. Think of the account as an investment. Not only do you save, but you also watch your money grow. Another perk is that your principle will always be safe and if you need to take the money out early you are only penalized a small fee, usually a month or two of interest.
Time deposits or term deposits are a form of investment and work similarly to an installment account. The main difference between an installment account and a time deposit is that you do not contribute regularly to a time deposit. You contribute a certain amount on the day of purchase and a set interest rate is applied to that lump sum for the duration of the deposit. Time deposits range from one to five years. Your original principle is secure and you gain interest throughout. Time deposits are a safe way to invest. The only downside is that if you take out the money before the term is up, you will forgo the interest earned. If you are planning to stay in Korea for longer than one year, this would be a great fit for you!
Expat Savings Accounts
Sign up for a savings account, because it will give higher interest returns than a regular checking account. Also, it won’t come with the nasty fees like savings accounts do in other countries. You can withdraw and transfer as much as you want. You can get a debit card linked to that account and while you’re at it, it will accumulate some interest (around 0.1% depending on your bank). In addition to special savings accounts for foreigners, banks also offer expat banking packages which can include special deals on overseas remittances and credit cards.
Check the Foreign Exchange Rates
Make checking the exchange rate part of your daily routine. When you see a decent rate, you’ll be able to take advantage of it. Even a difference in a few decimal points can make a huge difference when exchanging currencies, especially if it’s a large sum. It’s always nice to make money off your remittance.
Other Saving Ideas
The bank is a good place to safely lock your money away. You won’t be tempted to spend what you can’t see, right? However, if you’re serious about becoming a scrooge over your time abroad, you might want to double up on your savings plans.
Point (or “Mileage”) Cards
Although point cards won’t save you money (businesses certainly hope you’ll be doing more spending with them in hand), they can get you deals and rebates that will be beneficial. There are literally thousands of discount cards in Korea, including: stamp cards, members-only cards and point cards. Look for cards wherever you go. You might have to fill out a form or sign up online, but you can get some decent savings and discounts in the process. Using your bank card can also give points which can later be converted for money or goods. Ask your bank about their point schemes. If a trip to the coffee shop is part of your morning routine, ask the cashier for a coupon (tip: in Konglish, “coupon” also means a stamp card). Many chain cafes will give you a free coffee for every ninth or tenth purchase.
Contribute Your Own Key Money
This is an unconventional way to save and indeed you won’t be earning interest, but it does secure your money as there is no way to access it. Key money is a large deposit part of wolse or jeonse rent contracts in Korea and it is returned to the tenant at the end of the lease. Deposits usually range from 2 million KRW to 20 million KRW. If your job already includes accommodations, you won’t be paying your own key money or rent, but if you decide to find your own place, this is an excellent chance to secure your savings. Once you hand over your key money you won’t be able to access it until your housing contract finishes. When you leave Korea, you’ll be taking home whatever that deposit was- usually a significant amount!
Living in Korea can be less expensive than in your home country, but it’s not true that everything is cheap! Products that come from other countries tend to be more expensive as they incur heavy import taxes and are harder to find.
That means that drinking vodka from Sweden and eating pasta from Italy is going to cost big bucks. Rather than indulging on your favorite English crumpet, try eating from your local Kimbap Cheonguk /김밥천국. Korean meals at small local joints will run you under 5,000KRW. If you feel like being fancy, hit up a Korean BBQ or tuna sushi restaurant. Various grilled meats and tons of side dishes won’t be much more than 15,000KRW per person. Endless tuna sushi is slightly pricier at upwards of 25,000KRW per person. You may be able to find “happy hour” deals at sushi places. It will be all-you-can-eat in 40 minutes to 1 hour for a cheaper, set price.
You can also take advantage of your local supermarkets and fresh veggie and fruit shops. Learn about Korean products. You might not be able to find exactly the same type of cucumber you like from home, but you will be able to find an equivalent. Try learning about Korean food for some of the basic sauces and cooking ingredients. Once you start filling your pantry, you’ll be able to cook at home, which will also save you money. Be warned that the convenience stores like 7-eleven, GS25 and CU are always more expensive than your local markets. As well, the big box stores like E-Mart, Home Plus and Lotte Mart have great sales but otherwise can be quite pricey.
Drinking local beverages is a great way to save. It’s not fun to stop living your life just because you are in debt, but in Korea, the fun doesn’t have to stop. At less than 3,000KRW a pop, Korean alcohol is mind-bogglingly cheap. Your main options for bevies are Korean beer (Cass/Hite/Dry Finish/Max/OB), soju /소주 (a type of distilled liquor), and makgeolli /막걸리(a fermented rice wine). There are a few other special Korean wines and liquors that are not much more expensive. You can find these drinks at any restaurant and convenience store.
Shopping locally is another way to save money. Head to Dongdaemun, the underground subway markets, and small road side stalls to find reasonably priced goods. There is also the chance to bargain at markets whereas that is not possible at big stores.
Big stores and outlet stores do provide sales. You might stumble upon some great deals. Try shopping after 8pm, especially on Sundays. Stores want to get rid of goods in inventory as much as possible before the week starts and new goods come in. You’ll be able to bargain better at this time and prices will be slashed in half.
Save money buying used furitunure and books. There are plenty of shops to check for good used deals especially around Itaewon, Noksapyeong and Hongdae in Seoul. WorknPlay and other websites have forums to check for used items. People leaving Korea need to get rid of stuff ASAP. They often post items for free when they have to go.
Why go out when you can stay in? Shopping online is a great place to find good savings. Coupang and Ticket Monster are both group-buy websites. There are so many people in Seoul that there is usually quite a variety and you can get amazing deals. The only problem is that the websites are in Korean only. Try GMarket, which does have an English portion, for discounted goods of all types.
Day to Day Savings
The Public Transportation System
It’s tempting to use taxis, especially because they are still cheap, but you’ll save a lot of money by sticking to a no-cab policy. Reserve taxis for date nights and late nights out when the subway has stopped running. Invest in a transportation card (T-money in Seoul), which will give you a 100KRW discount on each ride you take. It doesn’t seem like much but it can quickly add up if you’re using public transportation daily.
Turn It Off
It might be easier said than done, especially during the frigid months of winter and the sweltering humidity in the summer, but try to turn off your heating and AC. Utilities are not cheap in Korea. Bill day can be a shocking time of the month when you really didn’t think you had used your air con that much! Make it a habit to turn off your electricity and gas when you leave the house. Everyone has tricks to stay warm or cool without blasting the utilities, but a commonly mentioned tip is to turn on your utilities when you first come home. Keep your bathroom door closed and shut your windows. When the house reaches a desirable temperature, turn it off. Use an electric blanket in the winter and a fan in the summer when you sleep. That way, you don’t burn through the electricity and gas during the night and you won’t be uncomfortable either.
There are many free things to do in Korea. Museums are often free or extremely cheap, and it is easy to stumble upon free cultural shows. The Seoul Global Centers offer free Korean classes and Koreans are always looking for language exchange partners. The Korean Tourism Organization (KTO) also offers free events and cooking classes. It’s easy to find contests in Korea. Take advantage of all the free activities before you start paying for things.
Consider getting a roommate. If you don’t mind living with another person, you can really save on rent. Once you have found a place, it’s up to you to rent the extra space in your apartment. You might need to mention that there will be another person living with you to your landlord, but it’s up to you about how much to charge.
Lindsey lived and worked in Seoul, South Korea for over 5 years. While there, she dabbled in different areas of work and explored the culture. She spent time teaching elementary students, business English to adults and high school students about college preparation. She also studied Korean, wrote blogs and tasted as many foods as she possibly could including fermented skate fish. Over the years, Lindsey developed a love for Korea and the culture. She is keen to share her knowledge of Korea with others and she will always consider Korea a second home.