This guest post from Bon is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes.
I’ve always been a bit of a capitalist so to speak, so when I decided to join the Peace Corps several years ago, not only was it a shock to my family and friends, it was a little bit of a shock to me. At the time I loved my job but knew that I would regret staying too close to the corporate path I had been following.
Calculating opportunity cost
When considering a major lifestyle change, ask yourself if you’re really losing your entire salary when you take a break from work. When I was weighing the financial impact Peace Corps would have, I knew the program would cover my travel, living expenses, and health care, so I wouldn’t really be giving up my entire salary for two years. I’d only be giving up what I might potentially have saved at the end of each year. Instead of my opportunity cost being something like $100,000 for two years, it was actually closer to $14,000 total. This seemed like a reasonable price to pay for the experience.
So, I did it.
I lived in West Africa for two years working as a small business advisor, and I loved every single second. Okay, maybe not every second, but as most volunteers will attest; although you join Peace Corps to serve others, you come away from the experience feeling as though you were the one who received the greatest service.
When I returned, my perspective on money, wealth, and consumption had changed. I had lived extremely simply, and this dramatically impacted my spending habits. (An early trip to Banana Republic brought me to tears.) I’ve always been frugal, even before my service, but living in a developing country on $150/month makes it much easier to see the line between Wants and Needs. Years after my service, the savings I’ve gained from my modest lifestyle have easily made up for that initial opportunity cost.
Standing out from the crowd
I had never considered that international volunteer work could be advantageous for my career; in fact, I always considered it a bit of a professional sacrifice. However, my experience set me apart from other job candidates. When I returned home, it took some time but I found an excellent position in the field I wanted. A bit further down the line when I wanted to live overseas again, my time in Peace Corps was a key selling point to my new employer, which was looking for someone with international experience.
I now live and work in Asia, and I’m happily back on that corporate path I was following before my service. But now I have confidence knowing that I can change routes and be successful.
Aside from making frugal habits nearly automatic and gaining valuable international and cross-cultural experience, there are other potential financial advantages of programs like Peace Corps:
- Time to let your nest egg grow. This isn’t a planned benefit, but I can see great value to those near retirement who may want to leave their jobs but aren’t quite ready to tap into their savings or social security. Why not spend two years volunteering and let compound interest work its magic? Peace Corps has been trying to attract older and more experienced volunteers recently. A caveat to this: One of the older volunteers in my group needed to end her service early for health reasons, so be sure to have a backup plan.
- Experience. Rather than waiting out the economy unemployed or in a job outside of your field, this could be a unique option for those who need to build experience for their careers (or before applying to a graduate program).
- Student loan deferment. Some federal loans are eligible for deferment during Peace Corps service (and other programs such as AmeriCorps), and now Perkins loans can even be partially cancelled for service.
- Graduate program affiliations. Peace Corps has affiliation with several universities that allow you to either take part in the Master’s International program, where your service counts towards your master’s degree, or the Fellows/USA program, which provides eligibility for generous scholarships upon your return from service. Definitely look into this early as offerings are limited and application timeframes can be long.
Words of warning
Just as there are potential benefits, there are also several cautions and considerations:
- I’m not advocating that anyone should join a program like Peace Corps that hasn’t already considered it strongly. I simply want to help people understand that long-term volunteer service can have a neutral and sometimes positive rather than a negative impact on your finances.
- I believe most of the benefits I discussed above can be gained from any experience where you are able to spend significant time living at a similar income level to a disadvantaged community. Peace Corps is a U.S. government-based program; if you don’t like this or it wouldn’t apply to you, consider VSO or IESC. Local options based in the U.S. include AmeriCorps and Teach for America.
- The Peace Corps support post-service (financial, medical etc.) was, in my experience, not very strong. Unfortunately, many of my peers were un- or under- employed for several months after service; so it’s important to have a solid plan for this period. (Grad school is a common next step.)
There are several things that can make Peace Corps difficult or impossible:
- You can join as a married couple, but you cannot take kids with you.
- Having significant debt or a mortgage will not disqualify you, but will make things harder on you if you are living on a local salary.
- You will have to pass a medical screening, but many times known medical issues can be accommodated.
- Unless you have strong work experience, you will need a college degree.
Finally, if you do decide to do international volunteer work, don’t be tempted to spend a lot of money on Stuff before you go. I spent too much, and most of my â€œessentialsâ€ ended up under my bed for two years!
A chance to see the world
Full-time volunteer work isn’t for everyone. That said, if you’re longing to see the world, but don’t see yourself being a blogging nomad or specializing in â€œlifestyle designâ€ — and if you genuinely want to push yourself and serve others — your finances shouldn’t stand in your way.
Are there others who have participated in similar programs with very different experiences? If you’re considering a program like this, what else might be preventing you from taking action?