How to Use Living Abroad to Boost Your Finances

Have you been thinking about living abroad but wondered whether or not you could afford it?  Well, I am here to say not only can you afford it but living abroad could help you increase your financial security.

I have had many friends that look at me and think that I must be rich to be able to live out here in Japan.  But that just isn't the case.

You can actually survive on very little salary here.  I mean seriously most recent grads barely earn $17k a year.  So uhh yeah I'd say you probably don't need as much money as you think.

Living abroad has been the BEST decision I could have made financially as it has not only helped me become debt free in just a few months but it has done wonders for my heretofore non-existent retirement funds.

And it can do the same for you!  I am constantly on Clubhouse telling everyone who will listen about the amazing financial benefits of living abroad.  And yes.  It truly is amazing!

So today we are going to take a closer look at how you can use your life abroad to boost your financial security.  We'll cover the steps you need to take as well as what you should look out for.

Have a Plan

Before you even set foot in a foreign country, you need to make sure you have your financial goals (and your plan to achieve them) outlined beforehand.

There's nothing worse than going into a new country and a new life without a plan for how you are going to come out of it when all is said and done.

Take it from me.  I flew out for the JET program when I was very young with, of course, no plan in mind other than to have fun and enjoy my experience.  

You can imagine just how much I had in the bank when I left.

Yup.... Nada.

So if you want to make sure you don't come back poorer than when you left, be sure to have your financial game plan laid out and ready to go before you travel.

Asking yourself these questions and writing down the answers could help.  From there, you'll be able to see what you need to do, financially, to accomplish your goals.

Questions to ask yourself

• Why am I going abroad?  What do I want to get out of this experience?
• Financially, where do I want to be after this experience?
• What are my 5-year and 10-year plans for my finances?
• What can I do to ensure my financial success abroad?

Know Your Cost of Living

Speaking of planning your trip before you go, do not forget this very important step: Knowing the cost of living in the city you want to move to.

The worse thing you could possible do is just pack your bags and hop on a plane without knowing what exactly you are getting yourself into financially.  

Trust me.  I had a friend who did this and found out very quickly that she wasn't making enough money to survive in her city.  Yikes! 

Never assume that the income you receive from your company will be enough.  Do your own research beforehand.  After all, it's not the company's responsibility to make sure you are financially stable.

So make it a point before you leave, and maybe even before deciding on where you will live, to do your research on various locations. 

Figure out if the cost of living is cheap enough for your financial goals but not so cheap that you will feel like you are living like a pauper.

You can use sites such as numbeo or cost of living to check the cost of living by city.  

But you know what's better?  

Asking the locals or the people who are already living there.  So head on over to Facebook, LinkedIn, IG or check out those expat blogs and find people who'd be willing to spill the tea.

Choose the Right Program

After you have your financial success plan laid out, you then want to choose the program or company that will help you accomplish your goals.  While, of course, still enjoying your new found life abroad!

Going Through a Program

There are tons of study abroad programs, teach abroad programs, doctors without borders, etc.  that can help you move abroad.  Literally, if you want it, it probably already exists.

The best part of going with a program instead of just finding a company on your own is that most programs will actually pay for your flight there and back when you do decide to go home.

So you would literally be able to start living abroad for free!

Pretty sweet, huh?

Also, with programs, they take care of everything for you.  Some even provide you with discounted housing.  

I know on the JET (Japan Exchange and Teaching) Program they provide you with discounted housing, set you up with health insurance, make sure you file the appropriate tax documents, and the schools even set you up with someone who helps you get a phone, wifi, and more.

And when I say discounted housing, I mean proper discounted housing.  Like I was only paying $100 for rent kind of discounted housing.

Can you imagine?! I was living the life!

Plus, the bonus in going with a program is that it usually comes with a built in social network so you don't have to look very far for some social connection and a core group of people you can call friends. 

Going Through a Company

If you do decide to go with a company, there are plenty of companies who will pay for you plane tickets as well.  And with companies, there is a bit more flexibility. 

You get to choose in which country and which city you will live as well as pick your own housing with all the amenities you could want.

In addition to that, you'd be able to choose exactly what kind of job you will be doing.  You could choose to be a teacher, designer, or work in IT.  

With a program such as JET, you are locked in to teaching English (unless you go the CIR route) and you don't even get to choose whether you will be teaching kindergarten, elementary, middle school or high school.

So if you want to do something besides teach, going through a company may be the best bet for you.

Find Your Tribe

Now once you touch down in a foreign country, one of the first things you'll want to do is find your tribe.

These are going to be the people you resonate with the most.  The people who you know you can call on when you need help and support.  Who may even become like family to you.

Your tribe will protect you from the loneliness that is bound to creep up on you at some point.  And when you have a core group of people you can rely on, not only do you feel more safe and secure, but they can give you tips on how to survive abroad without losing your shirt! 

Remember my friend who ended up in a country she couldn't afford to live in because her company wasn't paying her enough?  Well, it was her tribe that helped her stay afloat until she got back on her feet.

So finding your tribe is important.

Now the key to finding your tribe and staying on budget is finding people who align with the goals you have for your time abroad.

If you want to save up $30,000 for a down payment on a house, you definitely don't want to surround yourself with partyers or people who live the extravagant life.

When choosing your tribe, always remember your financial goals and choose your friends wisely.

To Find Your Tribe Check Out These Sites

• Meetup
• Facebook Groups
• Online Forums (For your specific country and city)
  • Expat Forums
  • Internations, etc.

Befriend the Locals

Now this step right here is key to being able to use your life abroad to increase your financial security.  And sadly, it is often overlooked.

If you are from the west, life abroad most likely means a significant reduction in your cost of living which you can then use to save tons of money, increase your savings, pay off debt faster, and start investing.

The only thing that could make this deal even sweeter is being able to save MORE money.  And do you know how you can do that?

Yup.  You guessed it.  With the locals!

Your local homies tend to know where to buy things on the cheap, especially the old grannies and granpas.  Not only that, but they can direct you to the places with quality goods, show you how to haggle, and keep you stocked up on lots of random candy they just happened to have in their pockets.

Thanks Obaa-chan!

Friending the locals is not just a great idea but it's very integral for your life abroad.  As a foreigner, it is easy for shop owners to take advantage of your ignorance and overcharge you on everything.

But by getting close to the locals, you'll learn how much things should cost so you won't get ripped off.  And bonus point, you will also learn more about the culture of your new country and truly be able to appreciate its unique customs.

Long story short, your top priority when you touch down abroad is to make friends with the locals.  

Not only will they be your hook-up when you are trying to save money, but they will also be the key that will help you fully embrace the new country and culture that you live in.

Send Money Home Immediately

For finances in general this is something you would want to start implementing but it is even more important when you go abroad.

When you live abroad, you may find it tempting to shell out loads of money for your creature comforts and for the sake of the experience.

By removing the temptation that is having money in the bank, you will not only be able to save more by default but you'll also become more aware of your finances and your financial situation in general.

So make it a priority to figure out how you are going to send your money back home for saving, investing, and paying off debt.

I use and highly recommend Wise.  They offer super fast and very cheap.  They also have a debit card you can use to access your money anywhere in the world with no fees!

So as soon as you get your check, account for your expenses, then send the rest of your money back home immediately.

No ifs, ands, or buts.

Increase Your Side Hustles

There's no doubt about it.  To increase your financial security having more side hustles can go a long way.

And the beauty of living abroad is that the amount of side hustle opportunities expand exponentially.

There are so many opportunities that open up for you when you move abroad.  Why?  Because you have one big thing going for you... you are different.  

And, most likely, you speak English.

So don't be afraid to take advantage of that!  It is not unheard of for people to move abroad and suddenly become a top model or a TV star.

You could even take those English skills of yours and teach online, offer private English lessons, or start your own English school.  

Being a foreigner and a rare commodity really does open a lot of doors for you so don't be afraid to use that for your benefit!

Take this opportunity to step out of your shell and go for things you might never have gone for back home.  Anything is possible.

Here's a list of a few side hustles you can do while abroad:

• Private Conversation Classes
• Start Your Own Business (Importing/Exporting, Restaurant/ Bar, School, etc.)
• Become a Model/ Actor
• Do Voiceovers
• Become a Travel Blogger
• Start a Youtube Channel about your new life/country/ etc.
• Host events/parties for other Expats or Tourists
• Become a Translator/ Interpreter 

Remember You Are NOT on Vacation

One of the biggest problems that expats face financially when living abroad is that they sometimes forget that they are not on vacation!

When you move abroad, especially if it is your first time, you will feel all the excitement that goes along with going to a new destination and experiencing a different culture for the first time.

You will want to go here, go there, eat this and that, and party with your friends at ALL times.  Not to mention, you'd probably want to do even more traveling since you are already abroad.

But all this hype and excitement results in just one thing.  You spending all of your hard earned money.  Period.  

This is not to say that you can't go out and enjoy yourself every now and then. But if you want to have some money in the bank when you get back, don't party like it's 1999.

You have to remember that while it may feel like vacation, it is most definitely not.  

So treat your new fancy foreign digs just like you would your life back home. Yeah, you know the one.  Your life, in the real world.

Understand Your Tax Situation

Before you go abroad, you'll want to check if your home country has a tax treaty with the country that you are going to.  Because if it does, it could save you on having your income taxed twice.

As an American in Japan, I know that I can make up to ~ $107k and not be taxed on it in the US.  But even though I won't owe taxes, I still have to file and fill out the appropriate forms.  Otherwise, failing to do so could land me in big trouble with the tax man.

Which, need I mention, won't be good for your bottom line.

So remember, just because you move abroad, doesn't mean your tax obligations magically disappear.  Plan for it.  And plan wisely.  Your future financial security depends on it.

All in All

Your life abroad is really what you make of it.  Sure you could go abroad and live it up.  Party all day, drink all night.

But what you will find is that you will end up broker than you were when you first moved abroad.

Living abroad provides you with so many opportunities to make money and build wealth and all, most likely, at a much lower cost of living than your hometown.

So you must decide before you go, what's it gonna be?  

Are you going to use your time abroad to ensure your continued financial security and to support your financial goals?  Or will you throw it away?

The decision is yours.