One of the main motivations for expats to move to another country to live a better life with a lot less and to be able to save substantially more than they would do otherwise which should, in theory, give them a great opportunity for saving money.
However, that is not always the case and financial experts say that many expats moving to different countries get drawn into the expat lifestyle of spending everything they earn, driving expensive cars, having a large house and eating out in fine restaurants every night. Certainly not the best way to go about saving. So, here’s an Expat guide to saving money.
Sometimes the best advice is the simplest. Everyone should make a budget to plan how you are going to spend your income regardless of whether you are an expat or still working in your home country.By not spending money on unnecessary items, it’s easier to regain control on spending; and that creates a surplus which means saving is more likely. Another piece of advice when setting the budget is to allocate an amount of money to save every month so that the practice of actually saving money becomes a habit and you’ve created what is effectively a rainy-day fund which may then pay for travel in case you need to travel unexpectedly.
Finally, on this tip of making a budget, it’s important that the expat keeps records of their expenses so they can track spending patterns. This way, when they need to create accurate budgets, which will vary through the year because of seasonal demands on their wallet such as Christmas, for instance, then they will be able to budget accordingly.
In order to be successful , write down every monthly expense and ensure these have been paid first before spending money on anything else. This will force the reality of a financial situation because you’ll appreciate where your money is being spent.
2. Compare prices
Again, a tip that is crucial for expats and non-expats alike is for them to compare prices for just about everything they need to buy.
This is a particularly good tip for expats who are new to their country because their lives are still disorganized and complicated and they are still really finding their feet. .
This process is made much easier by using online price comparison websites which cover most needs including toiletries, cars and utility provision in most countries.
One good way for comparing prices is to speak with other expats, so networking could be crucial. The other expats may have saved lots of money on something an expat is about to spend a small fortune on. Don’t be shy about asking since they will usually be proud about how much they saved and how they managed to do it.
Networking with other expats also leads to other money saving ideas which can be easily applied and will help boost the prospect for saving money while working overseas.
In addition, Nicaragua now has several expat online (Facebook) forums where long-term residents exchange ideas freely to help save money and boost the enjoyment levels for the expats staying there.
3. Change your lifestyle
We’ve already mentioned that many expats are drawn into an expensive lifestyle because they believe that is what’s expected of them but they don’t just work overseas to further their career as saving money is important so they shouldn’t turn their back on this opportunity.
This means that by living a simple lifestyle the expat should be able to save money on everyday living costs. Indeed, just because an expat is living overseas does not mean they should not be living within their means.
Even if they have moved to a country that has a higher cost of living than their own, they should make lifestyle changes if they want to save money and enjoy their posting.
One of these ideas may be to live closer to work so the expat has a short commute time with little cost. It also means they don’t need a car, which can be very expensive in some countries, and they can walk to work or use public transport. They will also be saving time.
Also, expats who move to Nicaragua will appreciate that the Nicaraguans cycle everywhere so you will save money and get fit as well.
Some expats may be given a travel allowance by their employer and they may not insist on it being spent just for that purpose which means, effectively, the money can be saved.
4. Find Cheaper Housing
The previous tip of changing an expat’s lifestyle also means they should consider the subject of housing. This is likely to be the largest expenditure for all expats.
Finding affordable housing is going to be challenging if the expat has not been helped by their employer, but the struggle to find a cheap home also extends to the local people as well. And because the expat is new to the country they may use a Real Estate agent who might not be cheap and will offer relatively expensive properties.
However, if the expat could compromise on the type of property they want to live in and save a substantial amount on the rent, their living costs are much lower and they will save more.
5. Buy second-hand
This tip will not be at the forefront of most expats’ plans when they are thinking of moving overseas but there are two considerations why it should be; do they really need to take their belongings with them to a new country and do they really need to buy brand-new items for their new home?
Let’s be honest, having to buy new furniture, or some electrical items is not going to be cheap so it makes sense to buy second-hand goods which are probably fairly new anyway. It may also help to make contact with other expats, particularly those who are leaving the country, and offer to buy their belongings (May and June are, apparently, popular months for expats to move on and many will be looking to sell their goods before starting life in a new country).
This is also a good opportunity to visit things like flea markets which offer a wide range of quality items at a very cheap price. Nicaragua abounds with Thrift stores called “American Stores” which are equivalent to Goodwill in the US.
It may sound trite but expats can save lots of money by choosing carefully where they shop for their groceries and clothes. In Nicaragua there are supermarkets mostly geared towards expats but they are much more expensive than those used by the locals.
This idea of saving money on shopping also extends to saving money on clothes; lots of cheaper retailers offering decent quality clothes at a much lower price than many better known chain stores. Expats should always consider shopping for cheaper items so they can save money.
Also, when out shopping, expats should regularly use markets where the produce is fresh and offers a great insight into how local people actually live.
Also, those expats who may not meet the criteria for an offshore bank account need to sign up with a forex platform so they can exchange currency at better rates or at least for a smaller fee. Many forex broker platforms also enable clients to choose when the best time for exchanging currency is, which helps bring down fees so changing money is much cheaper.
We all know that saving money as an expat is not always an easy task but financial experts will tell their clients that saving is an important habit to fall into even if the amount being saved is not very large. It’s also important to start saving early and to begin investing in pensions and other long-term investments to pay for an expat’s retirement.
Saving early also gives time for the money to grow and help smooth out market volatility; there’s no doubt that by saving a small amount over a long period time will grow into an effective and significant nest egg for an expat’s retirement plans.