Expat Saving Tips and Ideas Without Compromising on Lifestyle
Deciding to leave the comforts of your home is something that most people would balk at. But the thrill of settling in a new destination is hard to resist for many. You get to experience a new culture and immerse yourself in a different language. Data shows that there are an estimated 50 million expats worldwide and that number continues to increase each year.
Moving to a new country has a certain appeal to it but there’s one complication that many expats run into – money. Even a substantial savings account will gradually wither away, forcing many to either return home or find work locally. A good savings habit is essential then especially if you plan to stay abroad long term.
Here we’ll look at some great expat saving tips you can implement without compromising your lifestyle. The sooner you start saving, the better off you’ll be.
1. Set Up a Budget
To make smarter decisions about money, you’ll need a better understanding of your financial health. Creating a budget lets you see a clearer picture of how you’re doing financially. A budget also allows you to create a spending plan and ensures you have enough funds for all the necessities.
Start by calculating how much money you earn each month. Then jot down all fixed expenses that are the same each month. These might include rent, health insurance, student loans, and utility bills. With these amounts, you’ll know exactly how much you need to set aside to cover these bills. Then calculate variable expenses which may include home cleaning, food, clothes and entertainment.
2. Monitor Your Spending Habits
Next, you’ll need to track your daily expenses for each spending category. You can do this by tracking expenses on an Excel spreadsheet. There are also a number of mobile apps that let you easily track your spending on the go.
By monitoring your spending habits, you’ll have a much better idea of where your money is going. Spend some time each week looking over your spending habits and look for ways you can reduce your spending. For example, prepare your own meals a few times a week instead of eating out every day. Even small amounts can start to add up quickly so always looks for ways to cut back.
3. Reduce Banking Costs
As an expat you may end up paying fees just to use your money. Many banks charge a foreign transaction fee which typically adds about 1% to 3% to the total bill each time you use a debit card. Even if you pull out cash from an ATM, some banks charge a similar foreign withdrawal fee. These fees can really eat into your savings over time.
So how can you avoid these fees? If your bank charges a foreign international fee, consider switching over to a bank that doesn’t. Another alternative is to use a travel-friendly credit card. Many don’t have foreign transaction fees and some even award you points that you can use towards future travel expenses.
4. Open a High Interest Savings Account
Another way to save money as an expat is to open a high interest rate savings account which offers better interest rates than a regular savings account. It helps to look at an example to illustrate the difference. After 5 years, putting $10,000 in a high interest savings account that pays 1.5% annually would accumulate $596.62 in interest over a regular savings account with a 0.35% rate.
The amount may not sound like much but that’s almost $600 that you wouldn’t have had if you simply kept your money in a regular savings account. You choose exactly how much you want to put in and you can always set up regular auto-deposits into your account.
Do you have any other Expat saving tips? I’d love to hear them!