How to Financially Plan Moving Abroad

Moving abroad is something that is always very risky financially and in other ways as well. In this case, planning your finances in advance can save you a lot of stress and make your moving process easier. In this blogpost, I will be telling you how I saved up money for moving to Germany in 6 simple steps. However, know that I am not a financial expert, I’m only recommending things that worked for me!

Step 1: Look up the costs of living

The first thing you HAVE to do is look up the cost of living in the country/city you’re moving to. This is a must, because you get an idea of how much you’re going to spend per month and it gives you a bigger picture of how much you should save up before moving. I, for example, always use Numbeo.com to compare the costs of everything, it’s a very practical site and it really helped me to see how much money I needed. Of course, every person’s costs may vary depending on how much you eat, which neighborhood/city you’re going to live in, if you smoke or drink, etc., so keep that in mind when making your calculations.

Step 2: Inform yourself about the Visa requirements

For different types of Visas, they might ask proof of sufficient funds, which varies depending on the Visa you chose. For example, for my first Visa, which is the Youth Mobility Visa, I had to have at least 3000€ in my bank account (with proof!), among other requirements, and this just shows the German government that you will be able to support yourself for the first few weeks/months of your stay. However, for Fall 2021, I am applying for a Student Permit, which requires me to have 10,332€ in a blocked bank account at a German bank/company. The blocked bank account is basically your own money, but they send you a monthly ‘allowance’ of 861€ and the rest of the money is blocked, which is actually pretty nice, since it gives you a maximum amount of money per month you can spend with the amount you saved up. You can find a bit more information here and here.

Step 3: Set a specific monetary goal

Once you’ve looked up the costs of living and the Visa requirements, you should have a basic idea of how much you have to have for a certain amount of time you’re going there/moving. For example, my first financial goal that I set for myself, was 15000$, because I was moving there completely and not only for a few months. When I achieved that goal, I set myself another goal: 20000$, then 25000$ and that’s when I stopped. I was almost at my goal of 25000$ when I moved to Germany, so I was very stable financially when I left and I don’t have to stress about it, which really helped me.

Step 4: Beware of the currency conversion

Another thing to keep in mind, which is quite important is the currency!! Don’t forget to acknowledge that in every country there might be a different currency and sometimes it can be tricky to always keep track of it. I would recommend tracking the currency conversion every now and then, so see how much it fluctuates to make sure that you’re saving enough. The currencies can really fluctuate, especially during economically difficult times, like during Covid, so really, be careful!

Step 5: Get a savings account and start saving!

Once you’ve set up your goal or plan, start saving ASAP!! A good way that I learned to save up, was to always put around 30% of my earnings in my savings account. I felt like that was a good amount to save up and it still left me with quite some money for other stuff. Now, I was saving 30%, only because I was living with my parents and didn’t really have anything to pay, so when I really started saving, it took me around a year and a half to two years to get to my goal. I put more than half of my birthday money in my savings too, I had two or three jobs for a small period, I did everything possible to save up as much as I could. If you have other stuff to pay, then you should lower the percentage of what you’re putting in your savings to what works for you and how much time you want to take to get to that goal. The percentage tactic was actually something my teacher in high school taught me in economy class and I am very thankful for it! With this tactic, you don’t need to google everything and you don’t need to think about how much money to put after every paycheck, you just calculate 30% and with one click, you put it in your savings where you can’t take that money out. It’s very easy and you always have a percentage set, so you don’t spend the money you earned on other things.

Step 6: Take the cheap option, but don’t let it control you

Once you’ve moved, try to keep your expenses to the minimum and try to take the cheaper stuff. For example, when you go to the grocery store, you might want to take the brand from the store itself instead of the brand everyone knows, which ends up being more expensive. This applies to pasta (Barilla), tissues (Kleenex), butter (Becel), etc. However, you shouldn’t always limit yourself to cheap things, some things are better to have from good brands in the long run, like clothes, furniture, and things you like, in my case, coffee, shampoo, etc. But you should always compare different brands in grocery stores and try to choose the cheapest, trust me on this one, it will save you a lot of money at the end of the day. Also, check what’s on discount at the store and try to make different dishes with that!

In conclusion, I hope this article helped a bit to get an idea of what’s necessary when planning your move to another country, I know I would’ve wanted something like this to help me when I was doing it. It could’ve saved me so much time of googling things and trying out different saving systems. If you have any other questions related to this topic, don’t be scared to ask them in the comments or to contact me on Instagram at @sashalexosintseva!