When I first went abroad, I was utterly transfixed by how cheap everything is. Unfortunately, I quickly found myself spending as I would in the United States for a lifestyle that should have cost 50% of what I was paying. In attempting to be as antifragile as possible, I boiled my financial problems down into five specific categories, with my fiscal health drastically improving since I took steps to address them.
1. Not having a budget
Without a budget, even a rich man can become poor. With proper budgeting, even a poor man can live comfortably. This is the number one financial mistake made by most people, not just expats. For the longest time, I never used a budget and honestly dreaded the idea of having one. That all changed when I realized how easy it can be when one uses a spending tracker like Mint.
Mint allows one to input all of their credit cards and bank accounts into one place, while also tracking deposits. Automatically, it will determine how much you are spending versus how much you are making, while also displaying all of your transactions on one simple, easy to read sheet.
Pro-tip: My personal strategy is to use a Charles Schwab checking account with 0% foreign transaction or ATM fees, and a Chase Sapphire Credit Card to earn travel miles for free flights, both linked to Mint. Just make sure you have your auto-pay settings set to pay the card’s balance off in full every month!
Before I used Mint, I was spending as much as $2,500 a month abroad. Now? I’m spending around $1250 for a nearly identical lifestyle. I challenge you to try this. Chances are, you’ll be as shocked as I was.
Numerous studies have shown that spending money can often be a process that triggers the emotional centers of the brain as opposed to those that deal purely in logic. Budgeting allows you to spend less money on things you don’t need, and more on the things that enhance your life.
For example, I realized I probably don’t need to spend $60 a month on cabs and $30 for online subscriptions when I can just download movies and take the Metro instead. Had I never used Mint, I wouldn’t have come to this realization. Now, I occasionally spend that $90 on new clothing, something that I feel actually adds value to my life.
The one downside of using a spending tracker abroad is that your transactions will likely be in a different language, but you should be able to figure out what they are with relative ease based on their prices and dates. In Mint, you can even rename the transactions for greater clarity when checking in on one’s budget each month. Mint can even send you an email alert when you are getting close to overspending in a certain category.
This feature caused me to seriously look at my monthly budget and find out ways I could reduce it, with my rent payment being the first to get slashed.
2. Airbnb vs. renting locally
All across the globe, business savvy property owners have realized that they can rent out very average apartments to expats on Airbnb at a significantly higher rate than one would charge a local person. Do you really think your friend Igor or Oleg are paying $600 a month for their apartments? They’re not, and your landlord is laughing all the way to the bank.
Some cities have better Airbnb prices than others, with Kyiv and Tbilisi being among the cheapest. Even still, I encourage one to look elsewhere once they are settled into a country. Airbnb can be a great way of getting set up initially, but it is an irresponsible strategy long term.
For this, one can enlist the help of a local girl, or even contact hosts on Airbnb and ask if they are willing to work out a lower rate that can be paid in cash each month. To date, I have been able to convince all of my Airbnb hosts so such a deal after staying for a short period through the website. This is partially because there are no company fees involved, they likely won’t be paying taxes on cash payments, and I’ve presented myself as a trustworthy guy.
When I go to a new city, I never rent an Airbnb for more than a month, and I always include in my message I may be interested in staying another month afterward. In doing so, I’ve lowered my rent payments from $650 each month to right around $475, a significant amount to say the least.
If you’re saving money on housing, you’ll have plenty to blow on booze, women and other vices that are surely abundant in your developing country of choice.
3. Vices, vices, vices
Living in a developing country can feel like a playground at times. The rule of law is far less of a factor when outside of the police state that is the USA, and one can feel empowered by a new sense of freedom that was missing in life before. As such, one may find that virtually anything can be bought and paid for at an extremely low price, each with varying degrees of morality.
The first month I was in Ukraine, I was hardly ever sober. It was awesome, and I now think of a short period of excess as a right of passage for many men who go abroad. I would walk around drinking beer, chatting up girls, and trying to land lays while discovering the city. This sounds gay, but it was pretty god damn magical. While I toned it down in the second month, many of my friends know of no such restraint.
This can create a big problem for some men. Similar to watching a rock star who suddenly obtains windfall earnings fall victim to alcohol, drugs, and cheap sex, expats in developing countries face similar issues. If one can go get plastered at the bar for $10 pay for sex for $60 afterward, a vicious cycle where one is overindulging in their vices can happen very quickly. Add drugs and an addictive personality to this situation, and one has a real recipe for disaster on their hands.
4. Limiting the scope of remote income
In my first three months abroad, I was making more cash than I knew what to do with. In making close to $1000 a week, my schedule was pretty damn full. Foolishly, I thought the line of work I was in at this point was to remain continually busy indefinitely, so I quit a $50 a week social media job I was doing for a small company in the United States. I was in for a rude awakening when December came around, and I found my online work was very seasonal, and it would not be returning until February.
Considering I was overspending to begin with, I had to live off of savings for two months until my work started coming in once February hit. I immediately regretted giving up the $200 monthly I was earning from social media, as it could have paid for half of my rent or my entire grocery bill each month.
Jobs that can be done remotely can be difficult to find at times, especially if they are somewhat less mundane than data entry or copywriting. Even if they pay less than one should come to expect, they are worth their weight in gold when one’s expenses are comparatively low. I suggest anyone who has multiple income streams think long and hard before giving one up to focus on another. This may be one situation where there really is strength in diversity.
5. Buying groceries at bougie supermarkets
For me, this has been the most difficult saving to achieve, and one I am still working on. It is no mystery that the majority of local people in developing countries shop at outdoor markets to buy groceries for a cost that can be as little as 1/4th of what one would pay at a supermarket.
Unfortunately, this often requires a bit of haggling and proficiency in a local language, not to mention it can be intimidating for an American who is used to the convenience of home. Even though it may be daunting at first, this can become one’s biggest source of savings next to their rent payment.
I invite you to look at this as a challenge and go for it. I’m no better than the local people of the countries where I live, and neither are you. If shopping at an outdoor market is good enough for them, it is sure as hell good enough for me. In the times I’ve been able to pull this off successfully, I’ve been able to buy up to a kilo of vegetables for less than 80 cents, a kilo of beef for less than $4, and cleaning products for pennies. The same vendors typically use the same stalls in the local markets, and once you buy from them a few times and they know what you like, the process becomes far easier.
Ask one of the girls you’ve been banging to take you to a local market as a “cute” thing to do on a walk one day. She’ll be able to giggle while you clumsily try to buy from the local babushkas, and will likely find it quite endearing that you’re living like a local person and not just being a rich Westerner who throws money away, a trait that most girlfriend quality women in developing countries screen for.
Too good to purchase from a local market? I’ll quote Jay-Z, “I’ll forgive your weak ass, hustlin’ just ain’t you,” and wish you adieu on your flight back to the USA.
In refusing to pay exorbitant prices in foreign countries en masse, we benefit the expat community as a whole. Furthermore, one can gain a new appreciation for how people in “poor” countries live by seeking not to be above them, but in trying to emulate and learn from their frugality. Sure, you can keep your designer jeans and above average apartment to bring girls to, but make a real effort to do away with your wasteful Western habits, and use your experiences traveling as an opportunity to challenge yourself and grow as an individual.
In doing this, one will inevitably end up with more money to save, build your portfolio, and ensure you will never have to return to the institutionalized hellhole that is the modern Western world.
Read More: 6 Rules All Expats Should Live By