It’s easy to get caught up in the beauty and culture of another country when considering it as a new home. But the excitement of living abroad can quickly fade if you have underestimated the cost of maintaining a certain lifestyle there.
One of the best ways to balance your needs with your wallet — and avoid underestimating the true cost of going abroad — is to determine the cost of living in the new country.
Create a budget and make sure you list all possible expenses. It’s not just the rent and utilities that you’ll need to pay, but also factor in everyday items like gym memberships and grocery bills.
Take a look at the following international expenses to help you maintain a budget that fits your finances once you arrive.
Consider Housing Costs
Whether you’re traveling for two months or two years, renting or purchasing a home abroad is a major cost to consider. Look at how rent works — from billing frequency to how local real estate agencies operate and structure their agency fees.
Quick Tip: Local real estate agents can help you learn about the average cost of rent and property purchases in the area. They can also give you any local knowledge that might help your decision.
Factor in Utilities
Utilities can be complicated — especially if they aren’t included in the rent — so make sure you know what to expect in terms of monthly averages.
Quick Tip: Search “utility of” plus “country name” to find a list of local utility companies. Then, search on the companies’ websites to find information about rate structures.
Factor in Food
To budget for groceries, research local stores to see the kinds of products they offer and their price ranges. In China, for example, there are high-end chains and chains controlled by the government. Given that they cater to locals and need to be affordable, the local convenience stores may keep individuals under budget, but they won’t have foreign products and could have lower-quality items. Before you go, research prices at the stores you are likely to go to most.
Quick Tip: Use Xpatulator or Expatistan to help estimate the expenses in international cities. Expatistan.com is a website that shows a side-by-side comparison of cities. Simply type in the name of two cities, and it immediately generates a list of common categories like food, clothing and rent with a percent signifying how much more or less expensive that city is for that item.
Consider Currency Exchange Rates
Foreign exchange rates are one of the most crucial details to pay attention to and factor into your decision-making process. If a domestic currency is significantly weaker than a foreign currency, your money will not go as far internationally. However, if the domestic currency is stronger than the foreign currency, it will be in your favor.
It’s also important to realize that the dynamics of any currency pairing may change at any time. Think about how you’ll exchange currencies in another country. There may be a variety of currency exchange locations, but try to avoid airports or currency exchange offices as the fees tend to be very high.
Quick Tip: Use Western Union’s price estimator to see the current estimated exchange rate to the country you are considering moving, and make sure to determine the cost of living in another country to make it easier to maintain a budget and avoid surprises.