How To Calculate The Real Cost Of Living Abroad

by Dan Johnston

One of the most frequent questions people have about travel is “How much money do I need before I can “mobilize” and live abroad for a few months?”

It’s an interesting question and can be difficult to answer.

Below I will share with you two approaches to calculating your budget for living abroad and two videos on reducing your fixed expenses. Before I do, I want to touch on a third option: Just go.

My personal approach has always been to continue and increase my income while I travel abroad. Adopting this approach means your travel is sustainable and can continue indefinitely…without fear that depleted savings will send you home.

And there are lots of ways to do this so you can begin long term travel without so much as a blip in your current income.

I’m not saying a nest egg isn’t a good idea to be safe.

But I didn’t have one.

And you don’t need one either.

OK, I just wanted to get that out of the way for those reading who are as crazy as me and just want to go for it. Now, let’s put that aside and dive into budgeting and calculations around cash-flow and the cost of living.

There are two ways to find the real cost of living abroad. I am going to cover both here.

These methods will really simplify the thought process for you.

The second method in particular will save you hours and hours of calculations and stress.

Cost Of Living Abroad Method #1: Burn Rate + Budgeting

First you need to know your “burn rate” or “spending rate” right now.

How much money are you spending to live each month?

Include your housing, car, grocery and any other costs.

For the sake of an example let’s say that number is $3,500.

Now let’s assume if you’re spending $3,500 per month than you are earning at least that much.

Now let’s assume when you leave to travel you only keep $600 of your current fixed expenses back home.

Note: $600 is actually very high for fixed expenses. It’s critically important you cut your fixed expenses to near zero when you move abroad. Don’t worry, it’s actually quite easy. For more on this, be sure to watch the included videos at the end of this article.

OK, back to budgeting. So you had a net income of $3,500, and you’re going to have to support $600 in expenses while you’re away.

So you’ve now got $2,900 to play with for your living abroad budget. To be safe and account for extras like flights and hotels for your first couple days I would round down to $2,500.

$2,500, that’s your number. Now you can start researching costs in the places you think you may want to live. The three biggest are rent, groceries and entertainment. Don’t even think of getting a car. It’s a waste of money and not needed most anywhere on earth.

When researching your dream destinations, if one of the places has a lower cost of living than the others, I would suggest starting there. This will give you a chance to lock in your productivity and develop your marketing systems while your expenses are low.

Cost of Living Abroad Method #2: The Apples To Apples Approach

If you’re a bit more of a risk taker and not overly excited about detailed budget planning, this approach is for you.

Let’s start with a few assumptions.

At this moment you live where you live and manage to pay your bills and survive.



And let’s have faith that if you properly mobilize your business, your income won’t disappear just because you change locations.

Still with me?


Now all you have to do is compare the cost of living in your current location with the place you want to move.

Simple right?

I just wish there was a magical website that let you do this…


Wow. There is. Actually…there are two of them. Amazing.

Go to these two sites:

Expatisan Cost of Living


Numbeo Cost of Living

These provide awesome and detailed cost of living comparisons between any two cities.

They rely on user generated data which is constantly updated. This means the information is up to date, but it also means it depends on each users approach to shopping etc.

For instance, you’ll always be able to find “a glass of wine” for a lot less or a lot more than their average.

One way to understand this is to look up your own city and look at specific costs.

The general direction, whether City A is more or less expensive than City B, is always accurate.

I suggest checking on both sites and averaging the results.

Don’t Over-Complicate It

I know people who have spent months buried in spreadsheets and savings accounts hoping to feel “safe” enough to book a flight.

The two methods I gave you today eliminate the need for extensive research and will save you a ton of time.

I’ve consistently checked the two sites I provided as I’ve moved around and overall I can attest to their accuracy.

The work has been done for you. Now all you need to do is decide where you want to go and then double check the numbers work.

How To Reduce Your Fixed Expenses So You Can Travel Longer and More Often

When someone has been struggling to make the move and go abroad more times than not finances are the root cause. When you’re just starting out reducing your expenses is even more important than increasing your income. Watch the two videos below to learn more about living light and reducing your expenses.

The Secret To Travelling Longer and More Often

5 Tips For Reducing Your Fixed Expenses


Leave a Reply

Your email address will not be published. Required fields are marked *