How to Budget for a Year Abroad

“Budgeting isn’t about limiting yourself — it’s about making the things that excite you possible.” The Financial Diet

Why Budget for a Year?

Moving abroad to teach English is a huge step, whether you plan to go for one year or to put down roots. How much money to take with you will depend on where you’re going, but a good rule of thumb is to save up at least 3 times your expected monthly income. Equally important is planning the whole budget for a year abroad. Download my free budget template and follow along. 

I have filled in the different categories with a rough estimate of my first year expenses in Huelva, Andalusia, Spain. Once you’ve opened the Read Only version of the template, you will need to save a copy for yourself.

Once you have made your own copy, you will be able to edit with your own estimates or actual numbers:

INCOME

You will see 4 different income sources filled out – 700 for aux, 100 for private classes, and 200 for academy work, and later on up to 700 for online work. These are just estimates based on my first year. You can adjust the numbers and even add other categories which will automatically figure in to the formulas. 

In September I have no income listed. That is because I arrived in September and did not work. In October there is only about $100 for private lessons. Since I collected money each time I went to class, I did have some income in October. November is when you will actually start to see real income. After working the whole month of October, you will be paid for it in November. Before that you will be living off of savings and/or private classes. 

Across the bottom line, you can see the monthly total of all income, and at the far right there is the yearly income. These numbers are important for you to be able to visualize which months will require more savings. 

EXPENSES

Here you will see expenses broken into two categories: fixed expenses and variable expenses. Fixed expenses are things that do not change, like rent, internet, and phone, so they are the easiest thing to budget for a year. I have included food here for mine too, because I always used a set amount for food. If you prefer, you can move it to variable. Here are some ideas for keeping your food budget low. 

I also put a one time $250 in other for September. This is to allow for things that you may have to purchase, such as bedding or towels, as well as a security deposit. My deposit was one month of rent, or $180. 

Just like with income, you will see your monthly and yearly totals. They will update as you make changes to your copy. You can insert additional categories by right clicking and inserting a row. I would insert them BETWEEN existing rows rather than before or after so you will not have to change the formulas. 

DEBT

When I first came to Spain, I had a car payment and a credit card payment. My loans are on income based repayment, so I do not have to currently make payments, but it is a good idea to do it anyway so that your amounts do not increase. Debt does not have to stop you from moving abroad when you plan out your budget for a year. It makes it easier to see exactly what you will need to earn. 

SAVINGS

Finally, we can take a look at the savings and balance of your yearly budget. The starting balance will be the amount that you came with. You will see that I put $2100, which is 3 times 700. During the months that I did not have an income, there is -700 in savings. That is because I used some of the money I brought with me.

Monthly and Yearly BALANCE

The numbers along the bottom are my balance for the month when you account for savings – expenses. In September it says -60. When you have a balanced budget, this will say 0, but I went over by $60. To correct the budget, I would need to change the -700 to -760 for an accurate reflection. If you do not have more money to use in savings, you will have to find a way to earn more money or cut some expenses. 

The next month is OVER by $78. You should reconcile this to 0 as well. You can either spend more in a different category, or add it back into savings, which would give you -622 for savings instead of -700. I decided not to zero out the bottom numbers so that you can adjust the numbers for yourself without being confused by me shuffling numbers around. 

On the far right in green, you will see how much money is left at the end of the year. Here, it says $1700, but if I were to put that extra $498 that I never included into my budget, it is closer to $2100, or exactly the amount I came with. You can increase this number by working more or spending less.