Live Abroad for Less (Also at Home)

Photo: Philip Brewer

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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Live Abroad for Less (Also at Home)

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Guest's picture

Totally agree with all the above Philip. You can live frugally anywhere, you just need to make the big changes to your lifestyle; obviously when you've done this and have frugal habits, you can then move abroad and see some sunshine :-)

Guest's picture

One of the hardest things is that you are not immediately aware of the places and ways that people use to save money so making use of an existing expat community is important, as is talking to as many locals as possible (important not just for saving money).

Try to learn the local language too.


Guest's picture

Don't forget that if the things are cheap, probably the salary is terrible. I live in Brazil, things here look like so cheap for foreigners, but they are really expensive for us, because our salaries are terrible. If you move here you will get a Brazilian salary, not an American one. In my city, Brasilia, an small apartment, two bedrooms, is about 200k dollars. So, be wise before moving abroad. There are cheap places and expensive places in poor countries.

Philip Brewer's picture

Right. The "live abroad for less" strategy is much more attractive for someone whose income is still coming from a rich country even after they move to a poor one.

Guest's picture

Good article, and timely for me. But I must take exception to your statement that poor neighborhoods have cheap options for food and transportation. That would be the ideal. However, many times, there is no supermarket in the neighborhood, so people rely on more expensive small stores or even high-priced 'convenience' stores, or else travel to better-priced supermarkets (and public transport or walking is no picnic with bags of groceries. Laundromats, where they exist, tend to be substandard or run-down. Health-care options are few and expensive. Public transit is often non-existent or sub-standard.All this is aside from the fact that poor neighborhoods are often crime-ridden -- I know there are exceptions.

Finally, one of the chief reasons I am looking at foreign options is reasonably-priced health care.  Of course, since I am looking at relocating for retirement, my income will be in us dollars, so a low exchange rate will work in my favor. It's a very complicated issue; good for you for exploring it here.

Philip Brewer's picture

It's certainly true that many poor neighborhoods don't offer a way for locals to meet their needs cheaply. Any place poor people live, though, the people who live there are getting by somehow. Learn from what they do, and then improve on their strategies using your own knowledge and experience.

And, since you're in a position to do advance planning, you can look around for those exceptions.

Guest's picture

I love this--I do live 'abroad' in France, having escaped expensive California (at least the expensive parts I lived in).  I agree with everything you say above INCLUDING the fact that the live abroad mentality can be brought home.

One drawback of living around fewer wealthy people, however: fewer practically free and hardly used finds on craigslist.  In fact, there is only craigslist in Paris here . . .that's about 7 hours's drive. 

Guest's picture
Kate Forgach

Southern France is affordable if you live in smaller, less-popular villages. I lived in the Dordogne Valley for $10,000 a year and still managed to travel throughout Europe.

Guest's picture
Kate Forgach

I've always felt living in New Orleans was the closest you could get to living in a foreign country while still inside the United States.

Xin Lu's picture
Xin Lu

My inlaws moved back to the Philippines after living in California for over 25 years.  They downsized significantly, but to be honest I'm pretty jealous of their lifestyle now because they were able to basically "retire" early.  They are doing what they want to do because they chose to give up their life here.  It wasn't easy for them to move after establishing so much here, but I think they are happy where they are now.  That's what matters.  Some people just cannot give up the connections and things they have in one place, and that is understandable.

Nora Dunn's picture
Nora Dunn

Great article, Philip! I've maintained that full-time travel is cheaper than staying in one place, for many of the reasons listed above - but I also believe that the same "travel" mentality can be applied at home to keep our expenses much lower. It's about not getting wrapped up in consumerism, and appreciating all the little things around us that we tend to take for granted when we are rooted in one place for a while.

Guest's picture

One thing that hasn't been considered yet - the foreign earned income exclusion!  If you live abroad full time and still make a salary in USD, you pay very little if any federal income tax.

Philip Brewer's picture

That's true! That's a second way living abroad can be cheaper that won't work living in your home country.

For US taxpayers you have to live abroad pretty much a full calendar year to qualify, and it only applies to earned income (not interest or dividends). And, of course, you have to pay local taxes, which may well be larger than the US taxes would be. But if you live in a low-tax, low-cost foreign country and have a good-paying job, it can be a huge benefit.

(Note that I'm no tax expert.)

Guest's picture

Good article. It is possible to live frugally anywhere. It takes work and commitment, but it can be done.

The Internet is really a game changer here. I live in Poland, which is a very low-cost country compared to the USA, though the salaries are much smaller too. But if you earn your salary in USD, it's a huge benefit.

Guest's picture

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Guest's picture

Agree with this article for the most part but as someone who has lived in Portugal and Spain (I'm a UK national) for a number of years the single most important thing you need to do is to ingratiate yourself into the local culture. You will soon be able to shop and find bargains where the locals do and also avoid the toursist traps (even the ones that don't look touristy at first glance) This alone will save you a fortune on your day to day living expenses.

Philip Brewer's picture

Right! But here again, it's even easier to do that in your home country, where you're already integrated into the local culture.

That's not to say that integrating into a new culture isn't fun and interesting—it's kind of the point of travel. But as a money-saving move, looking at how people live cheaply at home is hard to beat.