One of the most important steps in preparing your move abroad is saving as much as you can before departure. But how do you do it? How do you save for a move abroad? Most of us don’t make enough money to put away an extra $2000/month without making sacrifices and adjusting our lifestyles to save. BUT the more you save now, the more comfortable you’re move abroad will be and the longer your adventure will last..so the sacrifices are MORE than worth it!
Follow these steps and you’ll be sure to stay on track and reach your savings goal!
6 Vital Steps to Save for a Move Abroad
1. Analyze your monthly spending
First, it’s important to see where your money is going every month. So open up excel, and begin a monthly spreadsheet. Start at the first of the month and track every single transaction that you make. Whether it’s something as small as a coffee from Starbucks or a huge transaction like rent. Every single dollar is important to keep track of.
As you begin recording every transaction, not only will you become more aware of where your money is going, you see a world of savings opportunities unfold right before your eyes!
Take it a step further and categorize your transactions to pick up on spending habits.
Here are the categories we used:
- Bills (rent, utilities, cable/internet, car insurance)
- Loan payments (student loans, personal loan, car payments)
- Life (gas, tolls, gym memberships, prescriptions, grocery shopping, going out, eating out)
- Credit Card Payments
2. What can you cut out?
Now it’s time to analyze. What can be cut out to save? We noticed that internet and cable alone took up over $160 of our monthly spend. With accounts in Netflix and Amazon Prime, cable was something we could probably live without. For this reason, we decided to cancel cable, bringing our bill down to $60 and saving an extra $100 per month. We could use the internet for our TV/movie fix. Plus, who needs to waste time watching shows when we have no time to waste? First move: consider it MADE!
Next, we looked at our car payments. We had two cars, one with $197/month charge, the other with $227/month charge and insurance for both totaling almost $275. This was where we needed to evaluate. Do we really need two cars? Definitely not! We did the math, and if we sold one, used that money to pay off the other, we would save almost $600 every single month. BINGO! This was where we’d be able to save the most. Check out how we sold our car and what we learned from the car selling process here!
And with just those 2 steps, we were able to put away an extra $760 a month. Two simple steps that we had been completely overlooking. Now, our goal to put away $2,000 sounded a lot more reasonable.
The other savings would come from the extras in life. Instead of going out, we cut our ‘entertainment’ budget to $60/month. Game nights, homemade dinners, with the OCCASSIONAL splurge once a month could be just as satisfying. Instead of romantic dinners, we found a GREAT movie theater deal for $5 per person with $2 popcorn on Tuesdays, so Tuesday became date night. We had gym memberships totaling $275/month. But were they really necessary? Watching Youtube video workouts or going for a walk/run works just as well. There are free solutions to all of these obstacles. Take time to really think through each one. And don’t be afraid to cut out what you think is vital and replace it with something more off-beat, that costs less.
Do the same for your monthly spending. My advice would be to find at least 2 big opportunities to save, and then go from there. Looking at the little things after you’ve identified the big ones makes your goal seem easier to achieve. It is incredibly motivating, and you’ll be surprised at how much progress can be made instantly!
3. Set your budget
Now that you’ve analyzed where your money is going, it’s time to set a budget. This may change depending on where you are moving and what the Visa requirements are. To apply and get accepted for an Austrian National visa, we need to have $12,000 in the bank. With 6 months left to departure that meant at LEAST $2,000 per month. After we established our savings budget, we used the same categories as we did to track our transactions, to come up our monthly budget. BUT this time, we included our monthly income, required savings and credit card debts. Keeping everything realistic and on point!
- Bills (rent, utilities, cable/internet, car insurance)
- Loan payments (student loans, personal loan, car payments)
- Life (gas, tolls, gym memberships, prescriptions, grocery shopping, going out, eating out)
- Credit Card Debt
- Income
- Savings
Here’s a visual to get you started…
Play around with these numbers until you are satisfied with each category. And most importantly, remember to be realistic. After all, you know your spending habits the best.
This process will also be a clear indication of just how long you need to save before you hit the open road. You may find that you’ll need to wait a few months; just to be sure you have enough. Our goal was to leave around June, and after analyzing ALL that we needed to save, we changed our departure to mid-July instead. Waiting another few weeks or even a few months to have the money you need to be comfortable, is definitely worth the wait.
Another great tool to help with the budgeting is Mint.com. This site is AMAZING! You can add every bank account, every loan, and credit card and it keeps track of your spending for you. Not only can you set a budget for each category, it lets you also set monetary goals that are linked directly to your bank account. For example, we have a “Moving to Austria” goal. Input your estimated departure, and it will tell you how much you need to save every single month to reach your goal. Best of all, it will call you out if you’re over budget or spending more than you typically have in the past. You can run, but you can’t hide from Mint.com!
And don’t forget to constantly re-analyze and re-budget, according to your results. The process should not end with your first spreadsheet. You will find things need to be adjusted along the way, so always check back in to look for more opportunities to save!
4. Adjust your lifestyle
There are endless ways for you to adjust your lifestyle to save money. Aside from the major things like public transportation vs a car and internet vs cable, the small stuff adds up just as quickly. Take a look at these quick tips to change your habits:
- Buy breakfast foods at the grocery store, so you’re not tempted to purchase that egg sandwich and coffee for $10 bucks – fruit, breakfast bars, even frozen breakfast sandwiches are CHEAP and GREAT for the AM when you’re on the run.
- Spend $10 on ground coffee and make your coffee at HOME every morning – $3 a DAY = $15/week = $60 in savings per MONTH!
- COOK, cook cook! You’ll end up feeling accomplished and proud of your new culinary skills.
- Make gifts rather than purchase – homemade gifts are WAY more thoughtful anyways!
- Spend $6 on a bottle of wine vs. $6 on a glass…DUH!
- Entertain more instead of going out! Control the flow (and COST) of your own night. GAME NIGHTS = so much more fun and personal than a trip to the bar.
- When you splurge, which is inevitable VERY occasionally, only splurge with a deal. Groupon, CHEAP happy hours, coupons – take advantage of ALL the deals out there.
- Make ‘would you rather’ a part of your every decision. Would you rather order pizza for dinner or save that $30 to eat the best pizza in Italy? Would you rather buy that outfit you can’t afford, or would you rather buy authentic gear for Oktoberfest? This internal question will NEVER steer you wrong.
- Know your habits and adjust to accommodate. Erin, for example, LOVES tea. And a quick $5 trip to 711 can add up. To satisfy his tea-habit, we invested in loose teas and made our own tea every evening for the next day. SO much cheaper.
I could go on and on, but I challenge you to think about EVERY SINGLE THING. Are you using hand towels instead of paper towels? Do you turn off your lights and unplug power cords to save on electric every month? Does your thermostat change temperatures drastically or do you keep it consistent and under control? NOTHING is too small and no dollar is too unimportant to save.
5. Get creative.
Now for the FUN part! Let’s get a little creative. Do you remember how exciting it was when you saved up all of your change in a piggy bank and cashed it in later on?! Well, what would be wrong with using that same method to save for a move abroad?
Try the 52 Week Money Challenge:
By putting in the dollar amount that corresponds with each week of the year, you can save up to $1,375! If you are leaving in less than a year, multiply each amount by 2 and make it work in 6 months. A simple method like this is overlooked every day. Have fun with your savings and turn it into a game rather than a task. If a money challenge is just too much for you, simply put away every loose dollar and all spare change into a jar. You will be SHOCKED at the results! We have saved $500 JUST from doing that in the past four months.
6. Remember the BIG picture.
Keep everything in perspective. You’ve already made the decision to give up some of life’s comforts in exchange for life experiences. Remember why you made that decision! There is a reason why you felt as if something was missing. And I guarantee you it’s not because you haven’t gone shopping in a month or haven’t ordered takeout from your favorite restaurant in a while.
In the grand scheme of things, what’s most important? Chances are, your answer will be moving abroad and seeing the world. And you’ve already invested time into reading this article, so deep down, you have that desire. Act on it! Don’t sweat the small everyday things that you’ll miss by cutting back on spending. Appreciate how incredibly exciting and fulfilling your future will be with each step you take.
There is NOTHING that can top the adventure you are about to embark on. Remember that every minute of every single day, especially when you’re about to pull out your wallet.
After all,
“Nothing worth having in this world comes easy.”
No matter how much money you make per day or per hour, you can and you will find a way to save for a move abroad. Why? Because you HAVE to – wanderlust is in your genes! And when it comes down to it, your happiness is what is most important. The material things can wait.