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Why It’s Financially Possible to Move Abroad

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Financially Possible to Move Abroad

As many readers know, I just moved back to the United States after about 2.5 years of living in the Caribbean. Moving to a tropical island seems like just a dream for so many people, and if I had a nickel for every time someone told me how lucky I was, well, I wouldn’t have so many student loans. 😉

The thing is, anyone can do what my husband and I did. Moving wasn’t too difficult to figure out, and it didn’t require a particular skill level. Sure, it took a little adjustment and a big flying leap of faith, but there were lots of people just like us who were in the same boat.

Here’s why it’s financially possible to move abroad:

Foreign Income Exclusion

 

When you work abroad for a year and you don’t leave your new country for extended periods of time, you can claim residency in your new country and be excluded from paying US tax on your foreign income. It’s a bit complicated, and I had to ask for help with my taxes to fully understand it. However, what happened is that I just paid 12.5% tax to the country of Grenada while I worked as a university instructor, but I didn’t have to pay income tax to the US because of the foreign income exclusion (there’s a specific form that you fill out for it.) I’m not an expert on this, so I would recommend doing your research to find companies in countries that have low income taxes and who pay for work visas for expats.

Lack of Materialism Makes it Financially Possible to Move Abroad

 

It was expensive to live in Grenada. I’ve written about that many times before. The prices were all marked up to tourist prices, and the groceries were super pricey. That being said, my husband and I saved so much money simply by not living in a culture of excess.

We had to really want to order something, because if we bought new clothes or a book and had it shipped to Grenada, we had to pay customs fees on it. So, we went an entire year with only buying 1-2 pieces of clothing each. There was a mall, but it didn’t have the stores we were used to. We didn’t have cable, and for a year out of the two, we didn’t have a car. We survived it all, and everything went just fine.

Learn to Tell Yourself ‘No’

 

I’ve already been back in the U.S. for two weeks and have a renewed appreciation for tight budgets and managing spending. It was so easy for me to write about trimming budgets while I lived in Grenada because I had no extras to buy. Now, I find myself telling myself “no” numerous times a day. It’s tough, but if you want to live abroad, there are so many great places in the world that don’t have such a focus on materialism.

Other ways to save money as an expat if you really want to do it is to limit the amount of times you fly back to the U.S. and try to buy local as much as possible. We spent thousands upon thousands of dollars on plane tickets to go home during the holidays, and we could have saved a lot by not doing that! All in all, it was a great experience, and I’m so glad I did it. I’m happy to be back Stateside, but that little island will always have a piece of my heart.

Have you ever wanted to live abroad? What’s holding you back?

Photo Credit: Sedoglia

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Catherine Alford is a professional public speaker and freelance writer who covers family, finance, and freedom. Check out her blog, BudgetBlonde, and her bio at CatherineAlford.com.

50 Comments

  • I want to travel abroad but thinking to live in abroad is impossible for me. First financially, I’m not that stable enough for that, secondly I don’t want to leave my mom in here because before my father died I made a promise to him that I won’t leave my mom.

  • I would love to live abroad. If we didn’t have kids, I would seriously consider moving to a very inexpensive country and living it up =)

  • I spent a year abroad in Asia for work and the cost of living was nothing. The company paid for our hotel rooms and gave us a per diem which I spent like crazy and STILL never used up, which means I never dipped into my salary.

  • Matt Becker says:

    I think living abroad for a little while would be a lot of fun. I’d love to do it as a family when our kids get a little older (which will require us to first stop having new kids, haha). Not only do I think it would be cool to fully experience another culture, but I think there are a lot of really interesting places where you can live on a lot less. And with a lot less.

  • I have wanted to live abroad. The thing holding my wife and I back is the fact that I have a good job here on a good career track, our student loans, and the fact that we don’t have a big enough online income to justify moving abroad. Oh, and we’d have to rent our entire house, which isn’t a huge problem but could be quite the hassle.

  • I have never really wanted to live abroad. I’ve always been so comfortable where I am and just travelling to other countries. Canada really is a great place to live and I’d hate to move away from my family and friends. However, I’m sure it’s possible, and you have brought up a lot of great points.

  • I expect we’ll live abroad at some point for at least a few years. But it probably won’t happen until we are financially independent.

  • I’d love to live abroad! Not sure how feasible it is in the near future, but something to think about. I wasn’t aware of the tax situation- good to know. Thanks for the great post.

  • I don’t know that I’d want to live abroad for the rest of my life, but it might be fun for a few years. We’d have to have some passive income because my degree would probably not translate to other countries and I don’t think the pay scale would be as good. Although, if the cost of living was cheap, it wouldn’t matter. I am afraid we would still feel the need to live like Americans and that would derail the whole cost of living thing.

  • FI Fighter says:

    My plan is to definitely live abroad for a few years once I reach early FI. I’ll gladly give up material possessions so that I can save money and actually experience things… experience life. Looking forward to giving up my car and not having to worry about paying for gas, insurance, registration, etc. At least for a few years anyway.

  • Every time I watch house hunters international on HGTV I tell my husband, “we should live abroad”. Maybe one day but I have to confess I do get quite homesick after a while.

  • Jamie V says:

    I would love to live abroad someday, sooner rather than later. We got back from Peru a week ago and I think we’re more than just playing with the idea now. This Wisconsin cold and bitterness was a wake-up call after exiting a plane that took off in 95 degree weather. We would like to be in a warmer climate for more than 4 months out of the year, with a lower cost of living and maybe we’d get to use our noggins and learn another language! I’ve been toying with Central American and he’s pushing for Peru (go figure!). Who knows what the next few years might hold??

  • As much as I love traveling, I don’t think I would move abroad now, but perhaps after retirement. We at least plan to travel extensively after retirement. 🙂 My job requires me to be stateside and I don’t want to sell my practice at this time. So now I just satisfy my travel bug with nice trips. I do think you and your husband had an amazing experience though. Loved seeing all those gorgeous pics!

  • Michelle says:

    We have definitely been thinking about moving abroad more and more. I don’t know what’s stopping us. I guess I’m just afraid to leave the family and friends that I love so much!

  • A friend of mine took a teaching science (in English) job in Abu Dhabi this school year and she did it mainly to save a lot of money and have a unique experience.She was contemplating coming home for Christmas and I told her if she can wing it without doing so, she can save so much money. She’s instead taking a discount carrier to Europe from Dubai for Christmas which is a heck of a lot cheaper and travelling with a friend. If you have to get out of your area, travelling locally can still get you that experience (especially if your loved ones can meet you in the local destination)

  • We moved to Canada (Vancouver Island) in 2009. Not exactly tropical, but mild climate and beautiful. Most commodities here are more costly than in the US. Part of that I suppose is because we live on an island and bringing goods across on the ferry is expensive. Conventional wisdom is that taxes are far higher in Canada than the U.S. I haven’t found that to be the case, when you consider all taxes–property, income, & sales. But all the higher costs combined are overwhelmed by the savings we’ve experience on health insurance. As two self-employed people in the U.S., our last premium before we moved was ~$500 per month and we had a $6,000 annual deductible. And we were healthy! Here our monthly premium for both of us is $120.50, no deductible. With savings like that, a move anywhere is possible!

  • Michelle says:

    My husband has dual citizenship with the US and Ireland. It’s been a longstanding dream of ours to move overseas, but we need to guarantee that he can work first. Part of our goal is to save up enough money for him to live in Europe for 6 months to find a job, claim residency, and find a home so that he can eventually bring me over. Thanks for the tips, Cat!

  • Average Joe says:

    You didn’t have cable???? How did you exist? 🙂

    Of course, I’m joking. When I was in eighth grade we went without television for about two years. What happened? I didn’t melt, my grades went through the roof, and I wrote a book. I think a TON of my creativity stems from that period.

    I’d love to live abroad and dig into a different culture. What a great experience.

  • E.M. says:

    I would like to live abroad, or at least experience it for a few years. I think we would have to be financially independent, though. Neither of us have mobile careers yet and money would be too great of a concern. I would also miss my family. I am hoping it will be possible eventually, as I would like to experience different cultures.

  • There are lots of products that come at a premium in Guatemala and we just learn to do without. When a pound of bananas is $0.12 and a pound of grapes is over 15 times more, you eat bananas. I do go abroad once a year and stock up on things I need, I like the wait, it makes things more exciting.

  • eemusings says:

    I would definitely be down to move abroad for awhile, but I would need a job offer or be pretty confident of my prospects first. Being jobless at home is one, being jobless abroad another. I would definitely love to live somewhere like NYC or Berlin for a couple of years!

  • I would love to move abroad and live a digital nomad lifestyle, and this is why I am working on building my online income to decent standards so that my family and I can afford it. In my case, it’s pretty strange because I’d be moving from a really cheap country – Romania – to something really expensive, but I’d love to see that happen.

  • I think the only thing holding me back is deciding where I’d want to go. There are so many places I still want to visit to see if it’s even a possibility to live in a foreign country. I think you get a lot out of the experience, but not sure I’m ready for it.

  • Hi Cat and John,

    Just wanted to drop you a line and let you know that this post was selected as an Editor’s Pick in this week’s Carnival of Money!

  • sarah says:

    I know this is an outdated post but I have been doing research as my husband and I are considering living abroad. With regard to your comment about groceries being expensive… and I am sure they are in Grenada but given the high rate of poverty among locals, how do they shop and eat? I can’t imagine those are prices or even foods the locals buy or people would be starving, no?

    Just stumbled upon your blog and love the financial advice, being in my late 20s I appreciate hearing it from someone in a similar situation as me!

    • Hey Sarah! The locals grow a lot of their own food and make very simple meals. Grenada is quite lush so they have extensive gardens and fruit trees and mostly eat off of the land. It’s very rare for a local to shop at the stores I’m talking about. Best of luck in your journey!

  • Sean Og says:

    I had a chuckle when I opened this article and saw the beach image. That is Keem Bay in Achill Island, Ireland. Oh how I wish it had the climate of the Caribbean…..I would move home in a heartbeat 🙂 Although I’m sure it would be far more urban if is did.

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