The expat lifestyle brings its own set of financial stresses. While others may tend to view our living overseas as an extended vacation, we know that our financial lives are far from worry free, even if we live in paradise on earth. To our disadvantage, we usually do not have easy access to friends and family when we face these stressors. The lack of support often intensifies the feeling that we are facing these issues alone, and in turn makes us more stressed. I hope that this post acknowledges some of the common struggles that we are all dealing with, and that I can offer some ways to reduce the stress in your financial lives.

In my experience, many of financial stresses from living overseas usually come from the following areas:

  • Keeping our spending in check become a little bit more complicated when you transition to a new way of living.
  • Unforeseen events incur costs that you are not prepared for, such as medical emergencies, loss of personal property, or even temporary loss of income due to disability.
  • Having to meet financial obligations back home, such as student loan payments, may make you feel stuck overseas even if you want to move back home.

I will discuss these three areas in separate posts.


Below are some of the choices that I’ve made while living overseas that had helped me reduce stress related to spending.

#1: Budget your travel cost in advance

One of the greatest benefits of living overseas is that suddenly we are so much closer to many cool places in the world that we want to visit. Being “out of the country” also somehow gives us the sense of freedom that we can easily travel since we are already away from “home”. However, we are also far away from family and may need to pay much more to see them regularly. All of these drive up the travel portion in our budget significantly, even when other parts of the budget stay the same.

While increasing travel cost is natural when you live overseas, it is important that the amount is clearly defined in your annual budget, after other fixed expenses and necessary savings are covered. The one common pitfall in budgeting is that a one-time expense such as a vacation is not listed as an item in the monthly budget; when it’s time to pay for travel costs, many resort to paying with credit card or from an emergency fund, hoping to repay in the next few months. Some never do, and rack up credit card debts or deplete cash savings in the process.

One way to make sure this doesn’t happen is to open a separate account and make small automatic monthly deposits from your paycheck (or automatic transfers from your main checking account) that make up your annual travel budget. This will help you keep the travel budget in check without spending the money you don’t have.

#2: Don’t get pressured into spending on things you don’t need

All your expat friends may be hiring a housekeeper, a driver, and a gardener, but you don’t necessary have to do that when you simply can’t swing it within your budget. If there is a social norm or pressure from local residents to hire household help that you need to adhere to, you need to make sure you cut other parts of your budget to accommodate this expense. The same principal goes with normal day-to-day expenses. If you are happy with purchasing local products, don’t feel that you need to purchase the imported ones with a surcharge because others expect you to.

#3: Don’t splurge because things are cheaper

On the other hand, sometimes no one pressures us to spend but ourselves. Because things are cheaper in the country where you live, you may be more likely to splurge without tracking the expenses, until you find out that you’ve splurged a little too much. To avoid this trap, you need to take a hard look at what it is that you need and what it is that you want, and don’t let prices trick you into thinking want is a need.

#4: Think in local currency and shop locally

When you get paid in US dollars, it is understandable that you would want to translate the local prices you see everyday into the currency you know, and compare it to how much it would have cost in the US. However I think it’s adding a level of complexity that introduces unnecessary stress. If your only option is to buy locally, the best thing is to shop like a local and find the balance of price and quality that you are willing to accept. This way it saves you the trouble of tracking the exchange rate all the time.

In the period of rapid depreciation of US dollars, you may find that your spending suddenly eats into your paycheck more. This is something you can track monthly. If this trend continues for a few months and you don’t have too much of a cash cushion, you may need to lower your budget a little bit. However, the exchange rate usually fluctuates, and the gain and loss of earning power will even out over time.

#5: Curb stress shopping online

Living in an unfamiliar place, we often try to get things that are familiar to us to make us feel closer to home. Thanks to the internet, we now have online shopping at our disposal and can get things from the US at a relatively reasonable price with shipping included. Nevertheless, the convenience sometimes turns into a vice when we use shopping online as a way to escape the stress that comes with living overseas. Since you can only pay with a credit card when you shop online, you are more likely to overspend without realizing it.

If this is a problem for you, you may want to go with the extreme measure of cutting your credit card (or deleting the credit card number online.) If you really need something from the US, ask family or a friend (or even a service provider) to purchase for you, and pay them using online bill pay or PayPal directly from your US checking account.

What are some other financial stress you’ve experienced while living overseas related to spending habits? Share with me in the comment section below!

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