Finances Abroad: Determining Your Daily Expenses Before You Go

Grab and Go Highlights

  • Using living cost tools like Numbeo will help you compare pricing between your current city and your perspective city.
  • Don’t get an apartment with a second bedroom unless you are expecting a long term visitor. Your friends won’t visit, I promise.
  • Don’t use travel blogs to determine expenses. Traveling a country is a completely different situation than living there, and you need accurate estimates.

Let’s assume that you have received an offer from a company to work abroad or your company is interested in sending you on a long term international assignment. You are super psyched, but they are adjusting your salary based on the cost of living in your perspective country.

You now need to figure out if 1.) their salary offer is fair and 2.) what kind of life the offered salary will afford you and 3.) will it allow you put aside some cash for the future.

Luckily, there are a couple of methods for determining the cost of living for the lifestyle you are comfortable with, without even stepping foot in your prospective country.

The Price is…Right?

How much does dinner for two cost in Cuenca, Ecuador? How much will you pay for a gallon of milk in Kuala Lumpur? How much less will you spend on rent in your new country for an apartment compared to your current location?

Enter my favorite website ever: Numbeo.

Numbeo.com pegs itself the world’s largest database for cost of living information. You are able to put in your city (Portland, Oregon for example) and compare the living expenses to any city in the world (we will say Da Nang, Vietnam). It will then show you a whole list of items, from a gallon of milk to monthly rent inside the city, and it compares those prices between cities.

At the top of the page, it gives you a general comparison of a few categories. Check out the screenshot below. It estimates Portland rent to be 204% higher than Da Nang, and restaurant prices to be 429.91% higher. Those estimates might be a little high, but they are in the right ballpark.

screenshot of Numbeo
Use Numbeo.com to compare living costs between cities

As you can see, in general, Portland is worlds more expensive than Da Nang. If you explore the page more you will find more details about the price of restaurants, markets, clothing, and rent.  

Numbeo helps working abroad
Numbeo will show you costs of meals, clothes, rent and other daily items.

Looking through all the items, you can begin to add up how much you think you might spend on regular daily items (rent, food, etc.) and begin to calculate your daily, weekly, and monthly expenses to get a general picture of what type of spending you can expect to be doing.

Narrow Down Living Expenses

Numbeo is great, and it gives you a good estimate, but it isn’t perfect. Once you have an idea of how much you might spend, I would suggest speaking with someone at the company you are looking at or connecting with someone in the city you are interested in moving to on Linkedin or Twitter and asking them if they wouldn’t mind sharing some information about what you can expect with regards to living expenses.

Obviously, I wouldn’t ask them hey, uhhh, like how much do you make and is your life, like, cool? But I would ask about rates for different apartment sizes and how they differ between locations, what the prices of local and international food is, what are the best neighborhoods to live in, what a coffee costs, etc. All of this information will help better inform your budget estimation.

You should also ask about pesky and less obvious expenses. Try to figure out what specific things you may not even be aware of before you get there. Do you have to pay for your own Visa? How much does it cost? What is the transportation situation? Are you renting or buying a motorcycle? How much is public transit?

An old cashiers tool abroad
Contact someone in your prospective area to help you estimate living costs.

You can’t know everything. Learning at times will be fun (figuring out how to buy a motorcycle) and then sometimes not so fun (putting down 6 months deposit for rent). But try to get a sense from someone on the ground about what you might be spending daily.  

From there, you should have enough information to get a fairly accurate estimate of what your spending will be. But do your due diligence. I can’t imagine it being fun getting to a country and realizing you got bamboozled on your salary.

Your Home is Important

My first time renting on my own was when I moved to Hanoi, Vietnam. I had never looked for apartments before, and was so excited at the prospect that I essentially just took the first one I found. The apartment was okay: a little overpriced and nothing amazing (even though at the time I thought I was a king).

If you are looking into housing before you leave, and if your company isn’t paying for it, start poking around realty sites. Most cities use Craigslist, but you can also find specific realtors in the area you are interested in living as well. Obviously, don’t chose an apartment until you get there, but start to figure out how much of your salary you want to spend on rent, what that will afford you, and where the best neighborhoods are.

An old Spanish town living abroad
Use Craigslist and local realtors to determine what types of apartments you can afford.

Just to give you an idea of how drastic prices differ between countries, I pay $550 USD a month in Vietnam for a two bedroom which includes cleaning service twice a week, 7 minutes walk from the beach, car service, and 10 great restaurants within 5 minutes of my apartment. So, for $550, I am getting a lot and there is no way I could get that value back in Portland.

Word of Warning: Do not get a second bedroom because you think people will visit you. They will not. If they do visit for a week or so, they can crash on a couch or a hotel. My mom is coming for 3 months, so it made sense for me to get the second bedroom, but otherwise I would downsize. Don’t pay for a room you don’t need and won’t use.

Use Local Blogs, But Be Weary

People love to exaggerate. I read blogs all the time about life in Da Nang where the author talks about how much they pay for a certain type of apartment and I know for a fact they do not have the type of apartment that they claim for the price they claim to be paying.

However, there are local blogs that do a solid job capturing the daily life expenses for different types of lifestyles in cities around the world. Some focus more on local-living, some with more of an emphasis on luxury, and everything in between.

One good resource that I have used before even though it targets retired or older folks is International Living. Their email postcards and posts are great for getting a sense of living costs and daily life in cities around the world, and they are uber-experts on moving abroad.

French window with a bed in front of it
Use blogs of people currently living in your prospective city to get a sense of daily expenses.

On top of being fun to read, local blogs can also help shed light on some of those hidden costs I  mentioned before. For example, a developing country like Vietnam is inexpensive  EXCEPT for things like makeup, toiletries, and name brand athletic apparel, which are all relatively expensive, something I would have never known before coming here if I hadn’t read it on someone’s blog.

Word of Warning: Follow blogs of people living in your prospective city, not travel bloggers and backpackers. Traveler finances are based on a day or two in the city and do not represent normal daily life. Stick with people actually living there for the most accurate estimates.

The Wrap Up

Once you have all of your information gathered, you can begin to work out what your daily, weekly, and monthly expenses might be and from there, it is just some simple math to figure out how much you expect to spend, how much you want to save, and the standard of living you want. If you aren’t sure how much you should be spending you can use rules like the 50/30/20 rule, or other simple personal finance frameworks as a starting point.  

Your research and planning ahead of time are well worth it, helping insure that your time abroad is not just professionally benefit, but financially beneficial and personally enjoyable as well.  

Have you had to judge a salary offer before moving abroad? Have you moved abroad and tried to estimate your expenses before you left? Let me know on Twitter @12hrdifference.

                 

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Aaron Horwath Written by:

Since graduating from the University of Portland in 2014, I have worked abroad. Currently, I live and work in Da Nang, Vietnam as the Head of Global Training at an international technology company. Through my blog, I share my experiences of working abroad to give others a glimpse into international life and help them decide if working internationally is right for them.