Saving Tips for Financially Squeezed Expats

You often hear talk of the ‘expat advantage’ – in fact, you’ll have read all about it on this site if you’re a regular visitor.  The expat advantage is a financial one, basically if you live and work abroad some surveys suggest that you earn a higher professional salary on average than your peers back home.  You may also benefit from a lower cost of living and there can be tax advantages to being an expat too.

All of these potential fiscal benefits achieved by those who choose to live abroad are lumped together under the umbrella of the ‘expat advantage,’ and you’re encouraged to make the most of your situation by saving and investing wisely to make your additional wealth grow healthily over the long-term.

But are all expats still feeling so financially well off now that the credit crisis has gone global?  We aren’t so sure – which is why we’re going to present you with some money saving tips for financially squeezed expats today.  These tips will perhaps allow you to continue squirreling some money away for a rainy day – after all, whether you live at home or abroad, you should ideally have at least 3 to 6 months worth of salary in an easily accessible savings account.

If you can get to the point where you’re saving money on your outgoings each month, this ‘extra’ cash can be diverted into a simple offshore savings account that you may be able to watch appreciate tax-free or in a tax deferred way.  Naturally the taxation benefits of such an account differ depending on your own situation, but the universal truth is, if you can stash some cash out of reach, you’ll be securing your financial future one day at a time.

Our first top tip for saving money is a simple one – don’t buy bottles of water!  Many of us automatically think we can’t drink the water when we go abroad, but have you actually looked into the water treatment rules and standards in your new nation?  For example, I know expats who live in Germany who drink expensive bottled mineral water when the Germans probably have far higher water treatment standards than we do in the UK! 

If you live in a nation with clean drinking water – drink it!  Don’t automatically think you have to buy bottled.  Even when you go to a restaurant, ask for a jug of tap water with ice and lemon and you’ll save yourself a few euros off the bill.  This simple saving could net you upwards of £20 each month.  Of course, do please think about the cleanliness of the water in the nation you’re in before you ditch the bottles…

The next top tip is to cut out the morning macchiato and macaroon – if you’re an office worker almost anywhere in the world there is a real culture of enjoying a morning coffee and even a cake with colleagues…but instead of indulging in this treat once a day, cut down to once a week and not only will you enjoy the treat all the more, you’ll save yourself at least £8 a week in our estimations.

Now then, if you drink or smoke you’re spending cash on a daily basis that could be better diverted into the health of your long-term bank balance!  Ideally you’ll quit smoking and reduce your alcohol intake significantly…but if you don’t want to quit altogether consider these alternatives.  Smoke a cheaper brand and/or smoke fewer cigarettes a day.  Try and go all day without a fag break, and then if you’re still determined to smoke, you can ‘reward’ yourself with a cigarette in the evening.  If you slowly cut down your intake you shouldn’t suffer from such strong cravings, and the money you could save as a result will dramatically stack up.  When it comes to alcohol, try cutting back on the number of times a week that you drink and on the number of drinks you have.  Look for bargain deals on booze, and if you only drink occasionally you will enjoy the treat all the more.  Also, for every alcoholic drink you order, make sure the next one is a soft drink or even water, and you should see this having a steady and positive impact on you savings rate.

Are you a member of a local gym, do you need to be?  Do you make maximum use of your membership?  If so, then fine and good for you…but be realistic, couldn’t you do just as well taking your dog for a more regular walk, having a swim in the sea, jogging to work, cycling home from work or taking a hike at the weekend with friends?  So many people have a gym membership but do nothing with it – they seem to think that by signing up they somehow start fighting the flab as soon as money is debited from their account each month!  We say that keeping fit should be fun, and that there are far more fun things that are free than running on the spot in a sweaty gym!  By ditching the gym membership you may be able to save significantly each month and allocate that cash to something far more beneficial instead.

Hopefully these tips give you some ideas about how you can save some expat cash and stash it away for a rainy day.  Remember that you may have many offshore saving and investment options once you move abroad that will allow your money to potentially grow at a healthy rate as well.  To find out more, speak to a financial adviser…