Ok, I’m ready to move, but can I afford this?

on JULY 14, 2017

 …aka fun with spreadsheets!

When we first floated the idea amongst ourselves, we had no idea of timeline. Living in another country seemed amorphous and very far in the future. We did make two bets early on that ended up serving us well and enabling a shorter timeline than expected. Regardless of where and when you move, building savings and building passive income have made our experience possible.

I am not a finance person, but have learned to love spreadsheets and financial models just as much as I love my lists. Luckily, a model does not have to be complicated to be useful. Here are a few models I put together to help estimate costs and living expenses. Using these models will help you figure out your monthly spend.

Profit and Loss

This is the very first model I put together and I still maintain it monthly. It’s pretty simple in essence – think of it as: money in, money out. For this post, I’ll focus on money out.

For each month, I record how much income and costs I think I will have for the month (projected expenses). Then, as the month goes on, I track actuals – what we actually spent.

For ease of documentation, I have monthly regular costs in one table separated (rent, transportation, utilities, phone) and keep a running tab of miscellaneous (movie tickets, media, clothing, etc.) to the side. Since we’re living in two different countries, here are our two lists.

You can make this as complicated as you want, but remember you have to maintain it. I know myself and know that something super complex wasn’t for me. You don’t need to do the projected part, but it is fun (and sometimes not fun) to see if you can predict how much you will spend.

Projected Cost of Living Abroad

One of the bigger reasons we decided to move in the first place was a cheaper cost of living. We were planning on surviving on passive income (because I want to try laziness for a while), so it was doubly important that we figure out what it would cost to live on a monthly basis in our new environment. Luckily, this is a pretty simple spreadsheet, but did involve a lot of tweaking.

It really is just a list of costs, but since required living expenses are very personal, I suggest making your own list. Here are the costs we have on our spreadsheet:

• Rent

• Online/Internet Service

• Phone (Cellular)

• Laundry

• Gas & Electricity

• Water

• Car insurance

• Student loan

• Charitable Donations

• Legal fees

• Retirement account

• Life insurance

• Misc (all living expenses beyond those listed)

I found lots of resources online to help me with estimating these costs, but the best resource people actually living in the area to confirm my research. Now, we knew how much income we would need and could work toward making that happen. I’ll go more into building passive income in a subsequent post.

This sounds too complicated and/or NOT FUN!

No problem. Get a financial advisor.  We have one and he has been a big help (Hi Dustin!). A good advisor will be open to your crazy goal and will actually help you achieve it. Let them handle the nitty gritty and spreadsheets.