How Living as an Expat Can Save You $4,747 Each Month
Why have so many people started living life as an expat? Are they crazy or unhappy with their current location? What’s driving this ever-increasing trend? While the desire to travel the world and make an income on the go can be personal and vary from each individual, there are a few factors that drive people to pack their bags with a carry-on to pursue their dreams of living abroad! One of the biggest factors people have started living as an expat is finances.
Here are three reasons living as an expat pays off:
1. Save Money Living as an Expat in a Low Cost of Living Country (Pull Factor)
Imagine having the ability to increase your purchasing power 5-fold or more! That’s exactly what some who are living as an expat aim for when they embark on their adventure around the world. A lower cost of living means saving a higher portion of your income. Saving money is a huge factor that lures people into becoming an expat (as it has for me!)
By traveling to places that have a lower cost of living than your current location, you can afford to increase your standard of living. For example, a beachfront bungalow, fancy cocktails in coconut shells and eating fresh seafood is a lot cheaper in Phuket than Miami, for example.
And that’s the whole idea.
Getting the same (or sometimes better) quality for a lot less. The lower cost of living allows those living as an expat to save up or vastly improve their standard of living.
It’s simple economics. When you’re paid in a higher-valued currency (the Euro, US Dollar, British pound, etc.) and living in a country that has a lower-valued currency equals huge savings. When doing a living expense comparison from Numbeo.com, we see that Switzerland ranks relatively high. On the opposite spectrum, Georgia (the country, not the state) ranks quite low.
By transferring from Bern to Batumi, you’d reduce your cost of living by 83.08%. To put that in perspective, the average net monthly salary in Bern is $5,347.79 with the average expenditure (including rent) for one person being USD $2,436.77. This means approximately 45.56% of your net income goes to expenses.
Meanwhile, transferring to Batumi (with the same average salary) where the cost of living plus rent only costs roughly USD $600, you’d be able to save $4,747.79, which is significantly higher than your savings in Bern.
2. Avoid High Cost of Living in Western Countries (Push Factor)
For many in the West, it’s not all glitz and glam. While we’re stereotyped for being rich by others (especially in the third world), the reality is, we face more expenses and taxes (that seem to be ever-growing!). As a result of such high expenses, many are pushed into living as an expat in a country with a lower cost of living.
Many Westerners find it increasingly difficult to keep up with rent and expenses. The U.S. poverty rate stands at 12.3%; a significant portion of the population. And that doesn’t include the middle class! Many are bogged down by mortgages, debt, student loans and healthcare expenses for chronic illnesses like cancer (U.S. Census Bureau, 2017).
A Living Expense Comparison Between Anglosphere Countries
High living expenses aren’t exclusive to the U.S., either. When exploring other countries in the Anglosphere, the average net salary in the UK is $2,302. However, the average expenses for a single person in London (renting a central 1 bedroom apartment) is USD $3,2111.28 (Numbeo.com, 2020).
This means living in London would require you to take out USD $1,000 each month in savings if you’re paid an average UK salary and living in London. This could force you into finding roommates and cutting back on food and other expenses, leaving virtually no room for savings.
Looking at Sydney, Australia, there’s a similar “crowding out” effect. As we can see, the cost of living plus rent leaves no room for savings. This causes residents to sacrifice their lifestyle (i.e. eating lower quality foods, shopping for cheap hygienic products, etc.) to keep up with expenses.
For example, the average monthly net salary in Sydney is USD $3,404.85. Meanwhile, rent and expenses for a single person add up to be USD $2,704.94.
While this leaves an average of around USD $700 each month, many would prefer living as an expat in a country where they could stretch their monthly savings to eventually afford a house in Sydney; home to the second most unaffordable housing in the world, costing 12.2 times the median income (Demographia, 2019).
3. Escape the Rat Race by Living as an Expat
For many in the West, life has already been mapped out for us. We’re led to believe we must follow the status quo and work a 9-to-5 job. And the indoctrination starts young: You need to get good grades to get into a good university. After university, you need to get a good job. And of course, after working at your good job for several decades, you need to save to live a good retirement.
In an extreme example, the German education system already begins to differentiate the factions of society by age 10:
- Gymnasium for top-performing students on track to attend university
- Realschule for average students who should go on to achieve white-collar careers, and
- Hauptschule for the lowest-ranking students who will likely become laborers or blue-collar workers.
Crunching the numbers on the ‘Rat Race’ lifestyle, you spend 8 hours sleeping, 8 hours working, 2 hours cooking and eating, and let’s say 1 hour commuting. But, that only leaves you 5 hours to really live. And of course, after working 8 hours, so many are too tired to pursue their passions. So, they plop themselves on the couch and tune out with Netflix. It’s no wonder 94% of Americans are stressed from work! But does it need to be this way? Your life may have already been mapped out for you, but fortunately, the Laptop Entrepreneur lifestyle allows people to redraw the lines of their own destinies.
Living as an Expat: Prioritizing Lifestyle and Avoiding the Rat Race
Laptop Entrepreneurs and Digital Nomads are individuals that are creative and innovative enough to realize fitting the cookie-cutter mold in life doesn’t guarantee happiness and success. Education systems and jobs tend to put people in boxes. The systems make people think their life and value are centered around how much they make, what they studied or where they went to school.
Escaping the rat race means pursuing your passions, not your desired income. It means you value free time over making more money with overtime. It means you ride the waves of life as you work, rather than working to save up for that vacation you’ve been needing all year.
Ultimately, those living as expats, “often define themselves based more on their specific leisure interests and orientation—beach and surfing, mountain climbing, or snowboarding—rather than focus on an identity based on their specific type of remote work that supports their lifestyle” (Blackshaw 2018, 80).
Do you want to learn how to join the growing movement of happy people living as expats in paradise? If so, download my book: Laptop Entrepreneur.