Inevitably, when discussing our move to Costa Rica, I am asked this question: How were you able to afford moving to another country? After all, whether or not someone has the option to embark on an adventure like this boils down to money….in addition to other things like guts, organization, patience, and a good sense of humor.
The best way to finance your move abroad is to be independently wealthy. If you are lucky enough to fall in that category, don’t think about it and just move somewhere really awesome! Most of us, unfortunately, do not fall in that category, so we need to come up with a better plan to be able to move abroad. Without going into personal details and numbers, I can tell you there are 3 things we did financially to embark on a wonderful journey to a different country. The fourth item on this list is icing on the cake, and will serve to either extend your move for longer or allow you a more “luxurious” lifestyle in the country you move to.
“I would rather own little and see the world than own the world and see little of it.” –Unknown
1) Get rid of all your debt except your mortgage. Many Americans live above their means. In other words, they spend more than they earn. Before you can even think of moving to a different country, you need to reduce your expenses so you can get rid of all your high-interest rate debt, such as credit cards. Debt is like a set of concrete shoes that will sink you into the ocean, limiting your choices in life, including hindering your dream to move abroad. In his book “Travels with Willie”, Willie Weir discusses the time he talked to a group about his world wide adventures on his bike. Afterwards, a young man asked him how he could do the same. When Willie discussed the man’s finances with him, it turned out that his dream trip to India was going to cost him $17, 850 before he even set foot on a plane courtesy of his car payments and other debt. Clearly, this guy was not going to be able to take off anywhere any time soon with that huge albatross around his neck. Willie writes that when he embarked on his multi-month trip to India, all of his worldly possessions fit in his friend’s closet. Most people have more stuff than can fit into a friend’s closet, especially grown ups with a family to support. We certainly did! But this gives you an idea of the barrier that owning a ton of material possessions can create…..especially if you buy these possessions on credit. Logistically, you cannot take a multi-month trip that may require professional leave if you have hundreds or thousands of dollars worth of debt to pay off each month. The same advice applies to anyone planning to move to another country. You have to get rid of your debt first. Chris had been planning our move for 7 years before we actually did it. About 5 years ago, he overhauled our finances to get rid of all our debt except our mortgage. The overhaul included a dramatic buckling down on expenditures. While we lived a comfortable life, we did live a little different than most of our peers. We did not eat out as often as before. We were the only family in the neighborhood without a luxury car or SUV. I bought the children’s clothes second hand. Our kids were one of the few kids amongst their peers who did not have GameBoys or an Xbox. I clipped coupons. I did this though I was working as a physician! Ditching your debt will give you so many options of what to do with your life. It will not happen overnight. Getting rid of debt can take years and will require some major lifestyle adjustments for some people. But it is totally worth it!
2) Save! Save! Save! Thanks to credit card companies who will give a card to anyone with a pulse, a good chunk of Americans don’t save money. In fact, as mentioned earlier, most Americans spend more than they earn. After you get rid of your debt, you must start saving money to fund your move. I have to credit Chris for saving religiously for the last 2-3 years before we moved. He would put bonuses from our jobs, money from my moonlighting (I would do sedations for outpatient radiology and sometimes work ER shifts), and sales from his photos and magazine articles in a savings account which we called “Our Family Adventure Fund”. Once he paid off our debt, every month he would put a portion of our paychecks into this savings fund also, which of course meant we had less money to spend on “stuff”. One of the expat families that moved here to Costa Rica the year before we did told us that they saved money for 8 years before they moved. Once again, saving money for your move will not happen overnight. It takes patience and dedication to save money for something so far in the future. How much should you save? Remember that for a developing Latin American country, Costa Rica is expensive. For certain types of visas, you need to show the Costa Rican government that you have $60,000 USD saved up to qualify for residency. We are here on tourist visas, so we did not have a savings limit. Regardless of your visa status, I recommend you have at least a year’s worth of living expenses saved up before your move. There are so many factors that go into determining cost of living in any country. How much money you need to save depends on your lifestyle, housing, diet, travel needs, location, and number of family members. As a very general rule of thumb, for a family of 4 living in Monteverde with a comfortable lifestyle in a rented furnished house, $40,000 is a rough(!) estimate to cover living expenses and education for one year, but that may not leave a lot for traveling. This is a very general estimate and you may need less or more than this.
In addition to saving money, save your vacation days and personal time off (PTO) if your job allows you to accrue it over multiple years. Honestly, I had no idea what PTO was until I quit my job, which gives you an idea of what a crazy work-a-holic I used to be in my former life. It was a very pleasant surprise to get 8 years worth of PTO money in one big fat sum along with my last paycheck. We also know a Canadian expat family living here who at least partially funded their move by saving their vacation days and PTO.
3) Sell “stuff”. We sold a lot of our stuff before we moved to add to our savings, such as furniture, bikes, scooters, outdoor playscape, books, DVDs/CDs, appliances (washer, dryer etc), and both of our cars. We sold my iMac computer and a lot of Chris’s camera, video, and computer equipment. We got a good sum for the set of elephant tusks that Chris had inherited from his dad. It is amazing how much money you have lying around your house if you just look. Chris did all of this for us and became very closely acquainted with ebay and Craig’s list. We also sold our house, but we did not put the money that was left over after the real estate agents’ commission and paying our mortgage off into our “Family Adventure Fund”. That money will remain untouched (along with some money to re-purchase a car or two) until we return to the US or decide to buy property in Costa Rica.
4) Talk to your current employer about working remotely. A great way to live in Costa Rica is to maintain an American salary while living on Tico prices. As I mentioned earlier, we went back and forth with Chris’s job about either taking a position in a different country (which would have displaced us to either Poland or Thailand), taking a leave of absence (hence the crazy obsession with saving money), or working remotely. We totally lucked out in the end and he was allowed to telecommute. Once you start thinking about moving abroad, talk to your employer about telecommuting once per week. Many employers started doing this a few years ago with the economy crash in order to allow people to save on gas and meals. Slowly introduce the idea of telecommuting to your boss and see how he or she reacts. If they are totally against the idea, start looking for jobs where telecommuting is more reasonable. As a physician, telecommuting is not an option for me. For now, I am happy not working outside the home and focusing on other creative projects that I left way in the back-burner because of my former crazy life. For our potential second year here, I will look at local or remote job opportunities.
Of course, you also have other options to fund your trip such as starting a business or getting a job in your destination country, but that involves a whole set of complications and steps to take. Since I don’t fall in either of those categories, I can only tell you how we did it. If you are lucky enough to have a job or business opportunity when you move, you may not need to save like we did, and that is great! If that is not the case for you, take the time to do some serious soul searching about adjusting your lifestyle to cut down expenses, ditch your debt, and save money so you will be rewarded with a beautiful, life-changing experience in the future. Only you can decide if that is the best thing for you and your family.
- How We Paid Off $89,000 in Credit Cart Debt and Saved Our Marriage (dailyfinance.com)
- Cost of Living for a Family in Cuenca, Ecuador (www.gringosabroad.com)
- Has Cost of Living Increased in Ecuador? (www.gringosabroad.com)
- Cost of Living in Costa Rica (www.therealcostarica.com)