Shockingly, in these times of economic crisis, people are failing to do the one thing that can help carry them out of the financial doldrums, saving money! Yes, figures show that personal savings levels have reached all-time lows, especially amongst new expats. So what can you do to remedy this, what can you do to motivate yourself to Save? Simple, make a budget.
Speaking from personal experience a regular question I used to ask myself was “where does all the money go?” Saving money can certainly be very difficult, and as an expat in a new country with new costs, a new currency and a need to get to know ones new surroundings, saving can be one task too much. Trends are showing that more and more people are spending money beyond their means and savings levels are at their lowest ever.
Depending on your lifestyle saving may not currently be top of the list with regards to what you want to do with your money. Obviously becoming an expat comes with many costs, it will be natural for you to want to explore your new home and that means going out a lot, making new friends, entertaining guests etc, which all costs money. To give you an incentive think about what the saved money can be used for, if you have children it could go towards a university fund, or perhaps save for yourself to ensure a comfortable retirement.
So a budget could be the way forward. Budgets give one a clear outline of where money is going, where it is coming in and where it can be saved. Of course you will need to set aside a bit of time to create a comprehensive budget, but the end result will pay for itself.
The first thing to calculate is your monthly income, not just your employment wages but anything that gives you money per month such as investments or any other source. When you have an exact figure of what is coming in you can quickly establish how much money you have to spend and in turn assist your savings plan by not going over that amount.
Once you have figured out how much money you are making you will need to figure out where the money is going. An important thing to note here is that outgoings don’t just mean bills, we’re talking about everything, that includes your daily visits to Starbucks, no expenditure is too small for your all-inclusive budget!
To make sure this is all done in a well organised manner, make yourself a budget spreadsheet and put your different expenditures into different categories such as Committed Outgoings like a mortgage, insurance or loan payments, these should be the outgoings that don’t change in amount. Next you will make a category for Other Expenses, these will include things like food, clothing, utilities and such, all things that are a necessity but can vary in price. Finally make a section for Personal Expenses, these will be items that you don’t necessarily need but want, this is where those Starbucks Frappucinos will go.
Once you have compiled all your outgoings it’s time to take a good look at them. The Committed Outgoings list will obviously be difficult to bring down, like wise other expenses so the best section to look at if you want to reduce your monthly outgoings will be Personal Expenses. As an expat you will no doubt want an easy transition in to your new home, this may include a reliance on cabs and other expensive luxuries you may not have indulged in back home. Think about the things you could cut out, or at least relax on. Instead of getting a taxi or other form of transport you could walk, this way you’d be able to get to know your new surroundings a little better anyway. Other things to consider- instead of going to the cinema maybe invite friends over and rent a DVD? There are many little ways to reduce your outgoings, it just takes some thought.
Next up its time to look at Other Expenses. Now you may find it difficult to reduce expenditure in this area however if your finances need it then you can always find a way to cut costs. When you venture to a new country the last thing on your mind will be how to save money at lunch time but its these little spends that add up in the long run, you may be tempted to sample the local restaurants but remember you can have just as much exposure to your new culture via canny grocery shopping.
If you have a credit card then it will be very important to examine your monthly bill very carefully, a high balance could prohibit you from saving greatly so it would be a good idea to find ways to lessen your bill. Perhaps investigate getting a credit card with better interest rates? Or speak to your current card provider and ask if you can get a reduction on the interest rates they offer.
Once you progress into your budget after a few months you will start to see increases in your savings, helping you reach your target, whatever that may be. Also be ready to review your budget every month to make new amendments based on changing circumstances.