A study by Insight Discovery found that one in five expat in Gulf Cooperation Countries fail to save any of their salary. Higher wages, however, is often why people want to settle abroad. What are the pitfalls to avoid?
Expats often choose to live abroad because wages are higher elsewhere. However, it is difficult to evaluate one's spending before leaving and, therefore, plan for savings. Higher cost of living, expensive health insurance, very expensive housing are all reasons why it might be difficult to save while living abroad. Of course, there is no universal solution as it depends on one's family situation, whether they are living in a rural or urban area or one's salary. But there are certain things everyone should keep in mind.
What should you consider before making a decision?
In the United States, for example, even though wages can be much higher than in France, it is not always easy to save money. Why? Healthcare is very expensive, it is often difficult for accompanying partners to obtain a work permit and the university fees are exorbitant.
To prepare your expatriation, here is what you should keep in mind:
- The cost of living on the spot and the difference between salary and local standard of living
- The cost of health and other social contributions which often charge a large part of the salary
- The cost and prospects of housing
- If you go with your children, the price of schooling on site
- If you leave with your spouse, the possibility for the other to work in the new country and therefore whether you will be able to rely on another source of income.
A few tips…
- Plan for a projected budget of your cash inflow and outflow to anticipate your expenses
- Keep an account in your home country with sufficient funds in case of emergency and as a safety net for when you move back
- Think about your retirement, if you do not contribute in your host country, consider public retirement plans in your home country if it is offered for expats or private retirement plans.
What are the best destinations to live and save?
Among the places that often come back in the rankings of the best destinations in terms of quality of life and cost of living are:
- Portugal is very affordable compared to the rest of Europe
- Colombia, which has big cities like Cali is safe with a very affordable standard of living
- Vietnam, an exotic destination and very accessible from an economic point of view.
