December 24, 2015

Budget Planning for Moving Abroad

Common expenses and how to plan for them

By Jacob in Planning 6-minute read

Moving is always stressful, but moving abroad presents new challenges which are even more cause for stress – including the immediate expenses of moving and the longer-term financial risks as you get settled in your new home. So if you’re going to pack up and ship off to another country, it’s wise to prepare for these costs months in advance.

Our savings plan includes 6 months of “buffers” for everything from rent and utilities to health insurance and new clothes. And we’re not bringing much with us, so we’ve included budgets to buy new furniture, kitchen goods, and other supplies. Plenty of these items may not cost much on their own, but they add up quickly! And that’s why it’s best to plan ahead and save in advance. That’s why the best first step is…


Build an accurate budget

If you just follow a few key tips, it becomes much easier to get started on crafting your savings targets. I’ll share my specific process soon, but for now you should focus on the following:

  • Start with the basics: Start with the big buckets, and define your budgets in more detail as you go. If you try to dive right into the details, you’re going to get too focused and you may end up missing more of the big pieces.
  • Define budgets in your destination currency: Because conversion rates will vary more than cost of living, list your budgets according to your new home country’s currency. This will become more realistic as you begin to elaborate on specific costs.
  • Research: Read up not just on advice for living in your new country/city, but also for traveling there. This can tell you a lot about the culture and weather of your destination, and what it might mean for daily life. If you can find guides for expats, that’s even better. These often tell you about application procedures and fees which you should save for.
  • Determine your major “buffers”: Depending on whether you’re moving alone or with your family, whether you’ll be looking for a job or taking your job with you, and the daily cost of living in your adopted home, you’ll want to set some ballpark buffer amounts for key expenses. Based on your own comfort with the risks involved, you can set your buffers anywhere between 3 months and 1 year. We opted for 6 months.
  • Brainstorm: Now close your eyes and think about yourself taking each step along the way, from old home to new. What unexpected costs might you encounter? Online research can help, but articles like this one may not cover something unique to your situation.
  • Carry a notebook or a good reminder app: Once you start thinking about your budgets, inspiration will hit at unexpected times. Have a way of jotting down those random thoughts so you can incorporate them into your budget later.
  • Start building a spreadsheet: You may start with written lists, but you’ll eventually need to plan things in more detail and spreadsheets are great at crunching the numbers. I’ve got some great recommendations coming for you so, in the meantime, just create your free Google Sheet however you like and remember to use tabs.
  • Don’t forget about sales tax: Your new country’s sales tax may be higher or lower than your own, but keep in mind that plenty of goods you buy there will be taxed. You will want to set up formulas to adjust for this.
  • Start selling your stuff: If you’re getting rid of anything/everything before you go, start selling it early. You may get more if you sell sooner, and it doesn’t hurt to account for positive cash flow in your budgets either.

To help you get started with all of these, here’s a very short list of some of the common and unexpected expenses you may need to save for.

Types of costs to include in your budget:

  1. Moving Expenses: Airfare, Extra Luggage, Shipping, etc.
  2. Fees: Early Passport Renewal, Residency/Visa Applications & Attorney Support
  3. Accommodations: Temporary Rental, Apartment Deposit & Rent, Furniture, Utilities, etc.
  4. Living Expenses: Groceries, Transportation, etc.
  5. Insurances: Health, Auto, etc.
  6. Work: Job Search Supplies, Office Supplies, Office Space, Accountant, etc.
  7. Lifestyle Changes: New Clothes, Language Lessons, etc.


Make a savings plan

The hard work is done. This part is simple, really… once you get used to tightening your belt. Tally what you need, divide it by the months you have left, convert it, and then set monthly spending limits for yourself to meet those targets!

Tally what you need: Now that your budgets are evolving, start writing formulas to automatically tally those amounts! This is yet another area we’ll be providing more insight on soon, but the best way to make sure your budgets fit your needs is to get your hands dirty. If you’re feeling really adventurous, you might set a lower and upper target with different columns. This lets you know when you’ve saved enough to be “safe” while still reaching for that full amount.

Create your monthly savings goal: If you’re using Google Sheets, it’s easy to find out how many days there are until your move date. Just use this formula if, for example, your move date is March 30, 2016: =DATEDIF(today(),"3/30/2016”,”D”). Then divide that by 30 and you’ve got an approximate number of months until your move date. Divide your total savings goals by your “months until” number, and you’ve got your monthly savings goal.

Convert into your local currency: Take that total and monthly savings goal, and convert it from your destination’s currency into your local currency. Making this conversion as a last step helps to ensure that your savings remain accurate.

Set your monthly spending limits: Now that you know what you’ve got to save and, compare that to what you earn to figure out if you need to “trim the fat” off any of your current spending. Hint: Either way, you probably should. You’re in savings mode, and any extra amount you save could end up making a big difference once you move. If you use a tool like Mint by Intuit, then you can really set yourself up for success by turning on alerts for when you’ve exceeded your limit goals.


Buy your flights early (with points)

The farther in advance you buy, the better deal you’re going to get. Even better: Continue your research daily over the course of a month across a few major online vendors to get a better idea of the best timing and store for your particular destination. and other sites can be a valuable resource in this search.

On the other hand, if you have a card that has a good points rewards program, you can also focus your spending on a credit card for the points. If you redeem these for airline miles, you can really make the most out of these points and potentially pay for the entirety of your flights! You’ll have less control over the final cost of your flight, but that doesn’t matter much if you’re still spending less than you would otherwise spend. We managed to get one-way flights for two from Los Angeles to Amsterdam, with only about $150 out of pocket.

Because Rich travels a lot for work, it even made sense for us to pay for a Citi Prestige card for the host of benefits. You may want to consider a similar strategy, and The Points Guy has a great article on three of the best options from Amex, Visa, and Citi.

Plan ahead to transfer your money

We’ll share more later about some of the best ways to save your money and plan to transfer it, but for now it’s worth pointing out: Once you save this huge chunk of cash, you will have to pay some type of fee to transfer it. Planning ahead versus waiting until the last minute could make a difference of thousands of dollars, so just plan ahead!

Okay, fine, we’ll give you an early tip: TransferWise.

Thanks for reading, and good luck!

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