Moving abroad will impact your financial situation. A lot of expats are stressed about the financial risks of living in another country. Planning your budget ahead will save you from insecurity in your new country of residence and make you feel more confident on how to manage your life abroad.
Step 1: Define the different cost categories
First, you should determine which expenditures you will be facing. You can divide them into different categories and compile them into a specific spreadsheet. This will allow you to have a clear view on your budget plan, at a glance.
- Obviously, moving abroad will include moving expenses such as flight tickets, luggage, shipping, cost of moving, etc.
- Once settled in, you will need to take into account different accommodation expenses such as: renting, furniture, groceries, transportation, shopping
- To make sure that you are fully on the safe side, you should not omit your insurance fees: health insurance, car insurance, evacuation and repatriation, home insurance, etc.
- You will also need to pay fees related to travel/work visa or residence permit
- If you are a student, ask your university about tuition fees and scholarship
If the currency of the host country is different from the currency of your bank account(s), then it is better to devise your budget plan accordingly, so you will have a concrete picture of all related costs before moving abroad.
Step 2: Organise and define your plan
It will be your own choice to set up the budget you need and determine the accurate way to track your expenses. The most common strategy is to define a monthly budget. In order to do that you simply need to ask yourself the following questions:
How much will I spend on groceries / entertainment / shopping / Internet / etc.?
How much money do I have left in my bank account?
How much will it represent in total?
If you are moving with your family, partner or children, you might be overwhelmed by all the different expenses it implies. Don’t be discouraged, and proceed step by step. Moving with your children undoubtedly involves more costs regarding schooling, childcare and canteen. Determine which expenses are more important than others.
Many countries around the world provide financial support such as family allowance which you could benefit from. Try to collect all the necessary information prior to moving abroad so that you claim these benefits upon your arrival.
Step 3: Stick to your plan
Once you have arrived in your new country of residence, you should track your finances wisely and make sure to keep your spreadsheet or written lists up to date. If your plan is well-conceived, you should stick to it as much as possible and everything will run smoothly.
If you travel to another country and feel that your budget plan cannot be used for these new expenses, then you could take advantage of an app to help you sort your budget during your stay abroad. It is up to you to find the budget management methodology that best suits your needs. However, we strongly advise you not to use more than two methods in order to avoid getting completely mixed up with your calculations.
Step 4: Always keep money on your saving account
We talk about expenses, but savings are also of a great importance. Setting monthly limits for example will enable you to easily set a monthly saving goal. Ensure to make regular adjustments to avoid unpleasant situations. If you notice that you have spent too much in one category, then you simply need to adapt your habits and spend less in the non-essential expenditures. Allocating enough budget for unexpected events that can occur during your stay, such as household accidents or injuries is a must!
To conclude, it is very easy to manage your finances if you find the right method and structure. Therefore do not be shy, and try several until you identify which one works best for you. Being organised is the key advice to avoid stress during your stay. If you have any other fears of moving abroad, then we invite you to read and comment our blog articles about expat life.