How to Move Abroad and Save Money

Updated: 08/20/2018 | August 20th, 2018

There are many people I look up to in travel writing. Tim Leffel is one of them. He’s been writing about budget travel long before I knew what travel — let alone budget travel — even was. He’s been places I’ve only dreamed about and was even kind enough to give notes and feedback on my book. I respect Tim a lot. He’s the master at finding good value destinations to live in around the world. I get a lot of questions about how to move abroad, especially with a family, so I was honored Tim agreed to write about this subject. Enter Tim.

On a typical day, I’ll send my daughter to her school on the other side of town in a taxi for $3, buy a couple of warm pastries at the local bakery for 50 cents, and pick up a fresh-squeezed 16-ounce juice for a shade over a dollar. A multi-course meal for lunch will cost me $4 if I go to a nearby restaurant and get waited on. If I want to take my wife out to the symphony or a concert, it’ll be around $12 for the two of us. My monthly electric bill seldom tops $20, and a maid cleans our four-bedroom house top to bottom for $17.

No, I haven’t jumped in a time machine and gone back a few decades. I just moved.

I live in central Mexico in a historic highland town called Guanajuato. I’m one of several million Americans who has moved abroad to find a better way of life at a lower price. I’m joined by Canadians, Brits, Australians, and others who have found it harder and harder to get ahead in the supposed rich countries of the world and have rebooted their life in a cheaper location.

Cutting Loose Instead of Cutting Back

If you have traveled abroad for any length of time, or even just read Matt’s book on traveling the world for $50 a day, you know it’s cheaper to circle the globe for a year than it is to just pay the bills in a country like the United States or Canada. Developed countries have a lot going for them in terms of convenience, selection, and infrastructure. But there’s an accompanying downside of higher taxes, more expensive housing, and larger bills for health care, utilities, and car expenses.

If you move from a rich country to a less wealthy one, you can easily cut your expenses in half. This is without making the kind of sacrifices you would have to make to “cut way back” on expenses where you were born. You can live a better life while spending far less. You end up with more money to spend or save without moving to your parents’ basement. It’s the equivalent of going on a diet without giving up ice cream or cheeseburgers.

Moving to another country to enjoy a better life for half the price is not odd, radical, crazy, or dumb. The people around you might say that, or at least think it, but very few who have actually done it will. Often when I asked people what regrets they had or what mistakes they had made, they replied, “I just wish I had done it sooner.” Right now there are digital nomads, families, and retirees all dramatically increasing what they have to spend or save each month without earning more money. They just changed their address.

I’ve interviewed expats living in a couple dozen cheaper countries around the world, and the savings they see is dramatic, especially if they were living in an expensive city like New York. One was paying $1,300 a month for her one-third share of a Manhattan apartment that barely fit three beds and a table. Now she pays $300 a month for a larger two-bedroom place in Bangkok, Thailand. “Instead of spending half of my salary on regular expenses, I’m spending a fifth. Now I can not only have a travel fund but an actual savings account. Despite making a lot less, I can easily save at least twice as much.”

In the San Francisco Bay area, one financial analyst I spoke with paid $1,340 per month for a one-bedroom place that wasn’t anything special. Then he got a job in India and says, “My one-bedroom apartment of comparable quality costs me $247 a month. A five-mile cab ride in San Francisco would be about $25, while the same distance cab ride in Delhi would be about $2 at the most.”

These are all big-city examples too. Naturally, the prices drop more when you settle in a smaller city or town, whether that’s in Mexico, Panama, Portugal, or Malaysia. Housing is where you may see the most dramatic drop, but you’ll also pay less for food, entertainment, transportation, and anything requiring human labor. That includes health and dental care, which for many self-employed Americans can go from 20 percent of their income to less than 5 percent. See the price comparison site Numbeo.com to get an idea of how average costs in other locations compared to where you live now.

How to Make the Move

Moving to a new country can seem daunting, but, like most projects, it’s a series of small steps that eventually get you to where you want to be. There’s no one-size-fits-all blueprint, but here are the big items to get on your to-do list.

Work out your income stream
The big advantage of living in a cheaper country is that you can stretch your money much further. If you have to earn money in the local currency, however, that can reduce much of your advantage. Some do well by running a local business, especially if it’s one geared to other expats. Legions of people end up teaching English as a second language. The best bet, however, is to earn your income in a wealthy country and spend it in a less wealthy one.

Any job that can be done remotely is great for this: writer, designer, tech worker, or online publisher, for example. Many other jobs can transfer easily to another location, such as teacher, NGO manager, real estate salesperson, or medical professional — but they may not have an equivalent salary unless you’re working for a foreign organization. Figure out how your skill set can transition to a remote earnings situation, and you’ll be able to get the full arbitrage of earning dollars (or pounds, or euros) and getting much more value for them locally.

Do a trial run

Living somewhere is very different than being a traveler passing through. Before making the big leap, spend some time in the place or places you’re considering, living like a local for a while. That means renting an apartment in a real neighborhood, shopping at local markets, and eating where the locals eat. If you can run some typical local errands and take some language classes, even better.

The easiest way to rent a neighborhood apartment or house is through a vacation rental service like Airbnb or Housetrip. Some people have had good luck with home exchanges or finding a short-term rental through the local Craigslist site. If you’re going to stay longer than a month, however, you’ll pay less and get a better feel for local prices by finding something after you arrive. The vast majority of local owners don’t advertise online, so you’ll need to ask around and keep your eyes open.

Sort out your visa

Some countries will allow you to live there for years on a tourist visa, and you simply have to leave the country every once in a while to renew. Others require mountains of paperwork and a very long application process. Investigate the situation for the country you’re considering and look beyond what you can find online at the embassy site. Check local message boards and recent articles, as visa requirements are often in flux. In some cases, you’ll need to apply for residency before you leave your home country. In others, you can sort it out after arrival. In every case where you need some kind of residency permit, assume extra cash and lots of patience will be required.

If you’re a parent, you’ll also need to research the school situation, and if you intend to find work locally, you’ll need to check out the local prospects for teaching English or other jobs legally open to foreign workers.

How to Deal with Resistance

When looking at a big life change, you are bound to meet a lot of resistance, both external and internal. By nature, we are more afraid of the unknown than we are of what’s familiar and comfortable, even if that familiar world is costing us every cent we earn. You may have fears yourself, but these will probably pale in comparison to the warnings you’ll hear from friends and family members who are following the status quo and haven’t traveled much.

The first concern is usually safety, even though almost any statistic you look at makes the United States look like one of the most dangerous countries on earth. You can see all the ugly details in the annual FBI report on crime. We’re #1 when it comes to guns, random shootings, and prison inmates. We also have an inferior health care system for anyone who doesn’t have a platinum insurance plan through their employer, which is a whole other kind of safety risk. In general, though, expatriates don’t tend to settle in dangerous places. They’re in Puerto Vallarta, not Ciudad Juárez, or on Roatan Island of Honduras, not in the capital of Tegucigalpa.

Despite all evidence to the contrary the past two decades, many still cling to the belief that if you get a good education, work hard, and have a family you’ll be part of the prosperous middle class. As millennials are finding, from Canada to Ireland to Australia, the opportunities are not what they used to be.

Moving abroad isn’t necessarily an escape. For many, it represents better opportunities or a longer runway for starting or financing a business.

Many parents scoff that, “You can only make a move like that if you don’t have kids,” but tens of thousands of families would strongly argue that point. In every country I featured in my book, there are families living a less hectic, less expensive, and less consumer-driven life. Your education choices in specific towns or cities may be more limited if you’re not home schooling, but there are, after all, children already living wherever you’d be planning to go.

Moving overseas can be time-consuming process. Yes, this all requires some time and effort, but the payoff can be huge. You can end up with twice as much money in your bank account at the end of each month instead of watching it all flow out to pay expensive bills. Moreover, you’ll get to experience a new culture, raise international kids, and give yourself an added perspective on the world outside your home country. I believe moving overseas has not only made my family more financially secure but given us a richer life. If you’re looking to change your life, this might be the way.

Tim Leffel is the author of The World’s Cheapest Destinations and the new book A Better Life for Half the Price. He lives with his family in Mexico. See more at CheapLivingAbroad.com. You can visit his website for more information (with step-by-step instructions) on how to move abroad.