Teaching English in Chile can help you learn Spanish, and, if you are careful, save enough money to travel in South America. The Chilean economy is better than that of other South American countries, and learning English is popular. As mentioned above the money you make here will only supplementing your stay rather than giving you any real savings, but many teachers have a great experience here.
Jobs teaching English in Chile - as with other ELT jobs in Latin America - can be hard to set up before you arrive. However, some teachers do just this. I've met several teachers who have done this. However, it is much easier if you are well qualified and experienced in teaching English overseas.
If you are experienced and well qualified, you could find work with the British Council, some of the larger schools, or one of the international schools from outside Chile. For less qualified people interested in teaching English in Chile, a good way to find work is to turn up, look up the English schools in the local yellow pages and call as many schools as you can. Remember to take a copy of your CV to give to schools after you arrive.
Many teachers work illegally, leaving the country every 3 months. The border crossing to Argentina can sometimes snow over, making it inconvenient at times, but fun - for most - at the beginning, at least. Remember that if you work illegally, this comes with certain problems. Possible deportation, possibility of being fired without notice and more. However, if you are a good teacher - or make yourself into one - any decent school will want to retain your services. Being good at what you do is the best protection against unemployment.
The most common destination for teachers teaching English in Chile, is Santiago. Almost half of the country's population live in Greater Santiago, and it is the easiest place to find work. A good time to look for work is at the end of February, a bad time is when people are on holiday during December and January. There is hiring from March to August. There is also some work in Iquique, a city of around 216,000 on the Pacific coast, due to the money from the copper mining there.
I personally recommend some kind of TEFL certification for many reasons, but it is not required by all schools. In fact, some schools won't even understand what a tefl certificate represents. The same goes for a degree. It is often asked for, but not all jobs insist on one.
Pay is low, but enough to live on. With a frugal approach some teachers report saving money. The average pay is around $500-$900 a month; the lower end being the more common. The cost of living is likely to be pretty much the same, and can, of course, be a lot more. Above 4,500 pesos an hour is considered to be a good wage. Many teachers in Chile have private students.
I've noticed that some companies 'offer' you the chance of teach English in Chile for a fee. I do not recommend this. You should not have to pay anyone to help you find work teaching in Chile, or anywhere else. Going there and finding an EFL job by yourself is preferable to this. After all, one of the attractions of teaching English overseas is the adventure.