Living Abroad Can Save You Money — Here’s How | Photo of forested mountains and the sea with boads | Photo by Jeff Encke

Jeff Encke

Living Abroad Can Save You Money — Here’s How

•  4 minute read

The trick is to go someplace where your cost-of-living-to-income ratio is in your favor.

What if I said that you can stay in five-star hotels whenever you wish, eat at the finest restaurants, travel internationally, hire a full-time housekeeper, save six figures, and more, all while earning the same money you do, right at this very moment?

It’s not too good to be true. I know because I did this for almost 10 years. The only catch was that I didn’t live in Canada, my home country. I was living abroad.

 

Why Would You Want to Go Overseas?

If you’re not interested in living abroad, that’s totally okay. But for me, my desire to travel and see the world was so intense that I did everything I could to could earn enough money to live that lifestyle.

Since I was able to both make money and travel, I saw that as a win-win.

Sure, I missed my friends and family, and I was occasionally homesick. But there would have been no way I could live the lifestyle I did if I stayed in Canada. Plus, I happened to meet my husband overseas, and we have a wonderful life together.

 

How to Live Abroad

Keep in mind that since I was a certified teacher (not an ESL teacher — that’s different), my job options were much more flexible compared to other industries. I knew this when I chose my profession.

Once I graduated, I went off to Australia to teach and ended up in Asia for about nine years. My salary at this point wasn’t great — probably $30,000 or so. But the cool thing about living abroad is that the standard of living is so low. A teacher’s salary isn’t the greatest, but when you make that amount in a country where, on average, people earn one-tenth of what you do, you’re pretty wealthy.

By the time I landed in China, my salary went up about 10 thousand dollars, yet the cost of living was really low. I also managed to negotiate my contract so that I got free insurance, subsidies for housing, and a free roundtrip ticket to North America every year. Since those are usually anyone’s biggest expenses, I saved a few thousand dollars right there. (That said, even if you can’t snag free airfare, sites like CheapO Air and Travelocity can help you find amazing deals.)

I had so much disposable income that it was almost impossible to be broke at the end of the month.

Let’s break down some typical monthly expenses when I lived in China (all in USD):

  • Rent: Free
  • Utilities (internet, water, electricity, apartment maintenance fees): $200
  • Groceries: $150
  • Dining Out: $200
  • Entertainment: $150
  • Transportation: $50
  • Housekeeper (full time): $500

I do want to be clear that I was married by the time I was in China for a few years. Combining our finances made it much easier to save the way we did. It also helped that my husband is naturally frugal.

 

What About Those Five-Star Hotels?

When you live abroad, expats tend to stick together. We happened to meet a wonderful friend who managed a restaurant at a pretty swanky hotel. Let’s just say that whenever they ran a promotion for free rooms, we happened to score ourselves one. Or if we did pay for a hotel, we would get upgraded.

You do pay a lot for meals (I paid around $60 for one meal there), but it was so worth it. And I was lucky enough to get discounts on that, too, on account of my friends.

 

The Downsides of Living Abroad

Other than being homesick, it was really difficult to make connections to locals because of the language barriers I initially had.

I loved my expat friends, but I wanted to connect to locals more and to learn more about the places where I lived.

I spent a few years learning Chinese, but I wasn’t terribly good at it.

Plus, I missed my friends a lot. When I did have the opportunity to fly back to North America to visit them, they weren’t always available to see me. Obviously, they have their own lives, so most of the time our schedules just didn’t jive. Yes, there’s always Skype or phone calls, but it’s not the same as interacting in-person.

And if I can be totally honest here, I found it difficult to invest while I was living abroad. Part of it was that I was considered a non-resident of Canada. This meant that if I earned any income within Canada, I had to pay a lot of taxes. It wasn’t worth it to me. My husband is a U.S. citizen, but I wasn’t at the time, so a lot of the money we had saved just sat around for a few years. In hindsight, it shouldn’t have bothered me so much, but it did.

Lastly, you may lose money when you convert between currencies. If you’re savvy with investing overseas or holding your money in other currencies, that’s great, but that definitely wasn’t my expertise.

 

The Right Mindset for Living Abroad

I’m a firm believer that anyone can live the overseas lifestyle if they want to. The hardest part isn’t so much the technicalities of living in another country. Rather, it’s the mindset involved.

You need to be open to new experiences and to being challenged. Frankly, you should also be prepared to get ripped off. Sometimes locals will look at you and only see dollar signs. There are also times when you feel like you have so much money in the bank that you end up overspending. Or maybe you neglect the debts you have back home.

Your sudden “riches” don’t mean that you should ignore all the personal finance principles. It just means that you get a bigger bang for your buck with the same money you’d earn in your home country.