Creating a Budget When You Don’t Know Your Expenses

September 14, 2017January 19, 2018Melissa

Creating a Budget

Creating a budget can be very overwhelming – especially when you’ve just moved and you don’t know what your expenses will be. I’ve definitely been there. When I arrived in Spain in 2015, I came with $2000 as my starter budget, but without a plan in place, I blew through over half of it before receiving my first paycheck. If I could do it again, what would I do differently? This is what I recommend for incoming auxiliares de conversacion.

I would begin by creating a budget using the 50/20/30 Rule. Here’s how it breaks down:

50% of your income goes to cover your NEEDS – Things like rent, food, electricity, transportation, internet, etc. These are the absolute basics you will pay for every month.
20% of your income goes to SAVINGS – You may need to buy a plane ticket at the end of the year. Or, if you’re staying in Spain over the summer, you’ll need a summer fund for when other opportunities dry up.
30% of your income can go to WANTS – things that you could do without in a pinch, but make life more enjoyable: eating out, drinks, travel, new clothes, etc. These things are likely the reason you are here.

Creating a Budget with the Auxiliar Income

So how would it look for an auxiliar creating a budget based on this plan?

Debt Management For Moving Abroad

July 5, 2017June 22, 2018Melissa

Raise your hand if you have debt. Yup, me too. According to Market Watch, Americans have $12.73 trillion worth of household debt as of March 2017, topping the 2008 peak of $12.68 trillion! About $1 trillion of that is in credit cards alone. How much of that is YOUR share?

the shame of debt — You, me, and about 80% of Americans.

We all know that debt holds us back, but what can we actually do about it? The first thing you should do is acknowledge it. Add it up and get a total. I like to use Unbury Me to visualize how different steps will affect my payoff date. Then, when I need to make a payment, I use TransferWise to send money back to my US account.

Debt Management Abroad

Moving abroad with no debt is ideal, but for many of us it isn’t realistic. If you can pay off all of your debts before moving, you will have less required monthly expenses. However, you should not use up all of your savings in order to achieve this, as you will need a starter budget to help yourself get set up in your new location.

When moving abroad, you can’t just focus on your total debt. You need to break it down into individual loans and monthly payments. Many personal finance experts, such as Dave Ramsey and Suzy Orman will recommend that you eliminate debt by lowest debt first (Dave) or highest interest debt first (Suzy). I respect both of their opinions.

However, for people moving abroad, the most important thing is minimizing monthly expenses. When I moved to Spain, I had $262.27 in minimum monthly payments. That’s a lot when your steady income is 700 euros a month. Now I’m down to about $42 a month in required debt repayment. How did I do that? Let’s take a look:

Living Expenses in Spain

June 21, 2017June 22, 2018Melissa

Research Your Living Expenses

Before moving to Spain to teach English with the Auxiliares de Conversacion program, I did a lot of research to try to figure out what my living expenses would be. There are some really great resources with sample budgets from different cities, like this series by COMO Consulting. Obviously, there won’t be information for every possible city. Neither of my two cities (Huelva, Andalusia and Vitoria-Gasteiz, Basque Country) were included, but you can still use them as a benchmark to get a pretty good idea.

Something to keep in mind when looking at other people’s living expenses is that even though you see WHAT they spend, you don’t often get a glimpse into HOW they spend. That is what I intend to do with this post. I’m going to use examples of my living expenses from Huelva and from Vitoria-Gasteiz, but the techniques for cutting costs should be applicable in any city.

MY LIVING EXPENSES

Rent: 225

Groceries: 65

Phone: 10

Electricity: 25

Internet: 16

TOTAL: 341 euros

This is my share of required monthly living expenses in northern Spain. Everything else is variable. If you can keep your core living expenses at around half of your income, you’ll have a lot more flexibility for some of the other things you’d like to do, such as traveling, shopping, and saving.

But how do you keep your expenses so low? The cost of living difference does most of the work for you. The north of Spain is considered an expensive region in comparison to other communities in Spain, but with a little planning, you can make it work. Here is a breakdown of my living expenses in the north and the south, and how different choices affect the price.

What Is Your Time Worth?

June 14, 2017June 9, 2018Melissa

Time is Money. This is a well-known concept that many of us have heard throughout our lives. But what does it mean?

For me, it draws up the image of someone tapping their foot, looking at their watch, and sighing impatiently. It implies the need to hurry up. Or maybe someone gives it to you as an excuse as to why they don’t have time to spend with you, thus enforcing that they can’t slow down. Time is MONEY, after all.

But wait. Slow down. I promise, you’ve got time for this. What if we’ve been misinterpreting this age-old proverb all along? What if instead of thinking that time is MONEY, we start to realize that TIME is money. This changes everything.