Live Abroad for Less (Also at Home)

Philip Brewer — Wed, 14 Apr 2010 13:00:03 +0000

Look around and you'll find any number of articles on living abroad for less. Some are full of great ideas — but of those great ideas, only one is uniquely applicable to living abroad. All the rest work just as well at home.

The one thing that sometimes makes living abroad cheaper than living at home is a preferential exchange rate. If your home currency is strong — and if your savings and your income from work or investments are in your home currency — then someplace with a weaker currency can be a really cheap place to live. But pretty much all the other "live abroad for less" ideas are just as applicable to frugal living in your home country.

Besides the exchange rate, what are the attractions that make living abroad seem attractive? Here's a short list.

Stuff is cheap where people are poor

If you go to a place where people are poor, things are going to be cheap. Besides that, everything is going to be set up so that people can get by without a lot of money — because that's what everyone is doing.

Well, guess what? There are poor people where you live now. Just as in a poor foreign country, in the neighborhoods where the poor folks live things will be arranged so that it's possible to get by without a lot of money.

Many of the poor neighborhoods in your home country are places that you wouldn't want to live, but that's beside the point — many of the poor countries around the world are places you wouldn't want to live either. All you need to find is one safe place where food and rent are cheap because that's all the locals can afford.

Interesting culture provides free entertainment

There are two general categories of people who seriously consider living abroad. Some are purely looking for someplace cheap — they have no interest in interacting with foreigners, except perhaps as servants. For others, though, much of the draw is living someplace exotic.

If you're the latter sort, then learning a new language, eating new foods, seeing new art, and just hanging out with people whose world-view is different can make everyday life so interesting you don't mind giving up the nice-but-expensive stuff that makes living where you live now expensive.

Once again, guess what? Unless you live in a truly homogeneous place, there are people with different cultural backgrounds in your home country too. They might not be particularly thrilled to have you show up and treat them like a source of free entertainment, but then the ones in foreign countries probably feel the same way (even if they hide it a bit better because they need the foreign exchange).

Those neighborhoods do exist, so if what you want is a place so interesting that you can lose yourself in its exotic charms, visit a few.

Excess baggage left behind

Most people who live abroad don't bring a houseful of possession, so they can live in a small apartment. All over the world, most big cities have some sort of public transit, so it's possible to get by without a car.

If you've caught onto the point I've been making here, you won't be surprised when I point out that you can do this in your home country as well. Even in the U.S., where public transportation isn't as comprehensive as it is some other places, there are plenty of cities with excellent public transit systems. (Anyway, all you need to find is one residence from which you can get to all the places you need to go. Those can be found even in places with mediocre public transit.)

If you're ready to get rid of your car and most of your stuff (that is, if you're the sort of person who might seriously consider moving abroad), then you can do so in your home country as well.

Real estate prices are low

If you're coming from a place where real estate is expensive, any particular foreign country may have remarkably low real estate prices. This is largely a specific example of "stuff is cheap where people are poor." Buying a cheap place to live is a hugely powerful enabler of a cheap lifestyle: It's even more powerful than a favorable exchange rate, because once you buy your costs are relatively fixed (unlike the exchange rate, which can be expected to fluctuate).

In a rich country, especially a small, rich country, there may be no cheap real estate. In any case, there probably won't be any cheap real estate on a bus line in a big city. Still, it's worth pulling the pieces apart and looking at them individually. In the United States, for example, there is plenty of cheap real estate, as long as you don't need to live near a city. Even in cities real estate prices are down sharply from the peak of the bubble.

Abroad or at home, renting is often cheaper than buying. You do lose the permanent cost savings that comes from buying cheap real estate, but you also avoid the permanent expense drag that comes from buying expensive real estate.

The whole live-abroad thing

If you're not the sort who might be attracted to the "live abroad for less" idea, there won't have been much here to grab your interest. But I do have a point, and it is not that you should give away all your stuff and move to a slum, even if that would replicate pretty well the experience of a lot of people who try to live abroad for less.

My point, rather, is this: If you're the sort of person who might consider living abroad, you're the sort of person who's willing to consider making big changes. And if you're willing to make big changes, you can live very frugally in your home country.

Obviously, there are huge upsides to staying in your home country: You know the language, laws and culture; you don't need to get a visa or a work permit; moving costs will be relatively low.

If you are drawn to the notion of living abroad, think about why. Is it the low cost? The interesting people? The beaches (mountains, rain forests, tropical weather)? Is it the exotic food? The adventure? The opportunity to completely change your life?

Depending on exactly what is really motivating you, many of those things will be available, in some measure, in your home country. In particular, you don't have to go away to change your life; you just have to have enough gumption to make the change.

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This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: