Working overseas might be one of the most rewarding, and at the same time high-pressure jobs to do. In this article, I suggest that you should follow these steps on how to create a budget while you are abroad.
As an expat, you have to make sure that you establish an outstanding balance among all the aspects of your life to make things work properly. Thus, the proper discipline, mindset, and actions are required. Without these, things become extra tricky and troublesome, once you notice that not all details are in order.
Perhaps, one of the most crucial parts of being an expat is how to create a budget. You will have to manage all your finances plus savings, without sacrificing your health and welfare. This is where rigorous self-discipline comes in, which will force you to work within your budget – no more, no less.
Despite the circumstances that you might be facing overseas, you are compelled to do all the budgeting on your own because you know that you must rely solely on yourself and not on anyone else. The dependence given to you as an expat now enables you to grow and develop into a wise decision maker, most especially in the aspect of budgeting.
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In this article, I will be sharing with you some useful budgeting tips which you may use in your day to day living. Here are the “10 Steps on How to Create an Exact Budget While Working Overseas.”
1. Find a job first and know your monthly income
At times, you apply for a job just because you want to have one! You fail to analyze whether the salary you can get out of this job will be enough to sustain your needs and to provide an ample part of it as savings. You apply and join the workforce only to realize later on that you could have done better and that you could have found a better paying job. Later on, you feel tons of regret because you did not analyze the position you took. So, the best way to address this is to make sure that you identify the monthly income of the post and analyze whether this could work on your budget.
2. List your one month spending
This tip means merely that you are supposed to list all your spending on a weekly basis and make a total of it to arrive at your monthly expenditure. If you are single you can list your spending daily. Through this, you can keep track of the way you spend your money, and you can prepare and adjust it based on your salary and based on your needs. If you see that in the past months you have been spending a little bit higher on non-essential things like unnecessary shopping, you can adjust by making sure that you won’t take the same action for the current month.
Here are the lists of my daily spending but I have just made it bi-weekly to keep it short. Please note that I am alone so this list is for a single person only. If you are with your family, make sure to adjust your list and include everything you’ve spent.
|Room Rent||Accommodation/Housing (including Internet and Electric bill)||2,500.00AED/679.35USD||2,726.00AED/740.76USD
|Petrol for Car||Transportation||60.00AED/16.3USD
|Mobile phone recharge||Communication||75.00AED/20.38USD||
|Dining out with a friend||Eating out||90.00AED/24.46USD||
|Mobile phone recharge||Communication||50.00AED/13.59USD||
|Laundry soap||Household Maintenance||17.00AED/19.84USD||
|Mobile phone recharge||Communication||25.00AED/6.79USD||
|Salik/ Tool gate fee||Transportation||50.00AED/13.59USD||
|Total monthly spending||4,466.99AED/1,213.86USD
Now, on the above monthly spending, it looks rather high compared to most expats in Dubai, but this has only happened to me after 10 years of being an expatriate. I’m not telling you this to brag but I’m just giving you an idea about how you could do the same. I can now afford to rent such a room.
But when I started to work in Dubai back then, 10 years ago, I was very frugal. I lived in a bed space with a monthly rent of 650AED or 176.63USD and I didn’t buy a car during my first two years in Dubai – not until I got a pay raise or increment. So here is a piece of advice, do not spend your money unwisely, always think of saving.
If you want to work out your monthly spending list very easily you can use the moneywise app. You can download it from Google App Store.
So, if you are a starter expat you can save a lot more like I did.
3. Create a plan for vacations
Vacations are supposed to be planned on a yearly basis, not just the random vacation that you grab every time you see a plane ticket sale. For example, at the beginning of the year, make a plan of your vacation schedule, plus the estimated budget that you will use for a specific vacation. Through this, you could save enough for the upcoming event and make sure that you do not jeopardize your other savings to fulfill your planned holiday. You won’t have to let your separate allotted budget be used in this activity, for that might affect your entire budgeting plans.
If you want to save more think of cash back when you book your plane ticket or book your hotel or any products that you need. Sign up with Ebates – they give 10 percent cash back every time your purchase. Sign up here now.
4. Prepare your goals
Preparing your goals will enable you to create a budget efficiently and effectively. First, identify what the goals are that you would like to set on a monthly and even yearly basis. Keep track of how much you will spend on those goals and where will you get the resources to address those goals. Remember that in trying to set goals, you have to take note of your current capability to achieve them. Self-discipline once more is essential in this entire process. After all, achieving your goals as an expat will bring you a higher level of happiness and fulfillment.
An example of your goal is “you will build or buy a $20,000 rental property.” To work on this, you should allocate a percent of your monthly income for it, the duration depends on your plan on how many years that you want it to become true.
5. Plan for retirement
As an expat, you have to realize that you are not going to work forever! There will come a time that you won’t be able to do the same jobs and activities that you do at the moment. As much as your spirit is willing to carry on the job, your body will be the one to set the limits. So, you have to create a better budget in preparation for your retirement plans. Just try to imagine, where do you see yourself thirty years from now? What do you want to do in the future? Bearing these questions in mind will help you create a budget more easily.
6. Plan for savings
Savings should always be a part of your budget, regardless of how much earnings you get per month. You are not supposed to entertain the idea that savings may come later on! You can make a habit to improve your personal finances and not just simply save your hard earned money but, to choose to invest it.
The right time to do introduce saving as part of your budget is now. Not later, not tomorrow. If you become complacent about your saving goals, this will be detrimental in your budget since you are failing to prepare for the long term. Thus, the future is sacrificed in a variety of ways through your inability to save. In making a wise budget plan, always make the savings part of your top priority.
By planning for savings you will actually want to fulfill your goals in item no. 4. So, planning for savings is greatly important.
7. Set aside a percentage of income to your side business
Admit it or not, being an expat will test your ability to work simultaneously. More than the usual working jobs that you do, you should also make sure that you allow a part of your income as a preparation for your side business. Whatever that may be and how much it will take, saving and planning for it as part of your budget will turn it into a reality. Whether that be an online business, or a business being managed by the family back home, this will also serve as an additional income generating source for you and your family.
8. If you don’t have an emergency fund, fund it!
I have reiterated many times how vital an emergency fund is. Just try to imagine, someone back home calling you and telling you that there is an emergency! May it be for hospitalization, natural calamity, or just the mere need to change the car battery or tires, it will entail needing emergency cash to spend. So, if you have not been saving some for these possible situations, then you are failing to prepare for the unknown. Know as well that emergency funds should not be spent on things that are not considered as emergencies such as vacations and shopping purposes.
While you are earning money from your job have the discipline to save for your emergency fund regularly.
9. Change your bad habits of spending
Self-discipline plays a vital role in this aspect. Figure out how you can reduce your spending when it comes to unnecessary things. Mostly, these fall under the “pleasure” and “wants” category rather than the needs.
Try to ask yourself. Is it something you need? Is it something that can make you happy? Is it something that your family can benefit from? And is it something that the higher being (God) wants you to have? If the answer to these questions is yes, then by all means, do so. But if even just one of these gets a no as an answer, then I suggest that you think about it thoroughly. From personal experience, I have seen expats who are into liquor drinking as well as parties on a weekly basis.
The need to socialize tends to be one of their top priorities. But come to think of it, is it a need or just a want? Changing these bad habits of spending will be a healthy step towards making an efficient budget.
10. Monitor your budget regularly
The way you monitor and reflect on the way you spend will further encourage you to do better. You will realize how much you are progressing as the months go by, and you will become more motivated to do it the right way. Budget monitoring is an overall operational protocol that you should do to better analyze your earnings as well as your spending activities. Therefore, self-discipline and motivation are enhanced through the habit of monitoring.
How to create a budget as an expat, as I have said earlier may be complicated. This will test your patience, character, and even your values. But letting yourself follow the excellent habit of creating a budget will benefit you in more ways than you could ever imagine. It may be a simple concept, but the effect of it will be felt not just by you as an expat but also by those whom you are working hard for your family. Although it may be complicated, remember that with the proper mindset and discipline, nothing is impossible.
Good luck with your budgeting plan!
Do you follow the budgeting steps mentioned above? What is your budgeting style? Please share your thoughts below.
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