Since this is the Cheapest Destinations Blog, naturally I talk a lot about the cheapest places to travel, the cheapest places to live, and how to travel well for less money. Cost reduction is just one advantage of moving out of an expensive country and embracing the nomadic lifestyle, but it’s one you can see and measure almost immediately.
This? Or a ramen noodle diet?
Here’s a question whose answer will say a lot about you:
If you had to double your disposable income within 12 months, what would be the best way to do it?
It’s kind of a trick question because there’s not one right answer. The first answer that springs to mind is going to depend on a lot of factors, such as
1) How and where you were raised.
2) How much of a “hustler” you are.
3) Your education level and type.
4) How much you have traveled.
5) Whether you have ever lived abroad.
6) How good/experienced you are at being frugal.
Some will naturally say, “Get a better job,” “Make more sales,” or “Work harder.” That’s one answer, though I’d argue it’s one that sounds better on paper than it really works out in reality. If you could double your income just by working harder or changing jobs, you probably would have done it already.
Some would leap to an education answer, saying “Get a master’s degree” or “Get certified in ____.” That 12-month window isn’t very practical for that answer though, plus you’re probably going to lay out a lot of cash to get that additional education. It’s a huge investment in yourself, usually with lots of debt attached, instead of making an investment that will grow more quickly, such as real estate, the stock market, or starting a business.
The Nomad/Expat Way to Double Your Disposable Income
A frugal-minded person would probably answer, “Drastically cut my expenses.” Move to a smaller apartment in a worse area or move in with the parents. Sell the car and switch to public transportation or get a barely running used one. Eat rice and beans. Stop drinking anything besides water. Stop going out. Cut out cable TV. Cancel the gym membership.
Will this work? Probably, but it turns life into a grind and is not much fun.
If you’ve already been a long-term traveler, you’ll probably go to your comfort zone and answer “Take off traveling around the world.” You know that your expenses will drop drastically as soon as you get on the plane if you pick cheap destinations. Unless you have a way to make money abroad though, you’re living off savings, so this is a temporary solution.
Change Your Address, Halve Your Expenses
The quickest and easiest way to cut your expenses in half is to explore the nomadic lifestyle while working a remote job. Or just moving abroad with your laptop or with your retirement savings. Either way, you’re spending far less and stretching the money you have available. Some call this geoarbitrage, others just call it moving to a location where it’s cheaper to live.
Since I’ve written a whole book on this subject, I obviously have my own bias. I’ve tried the expense cutting, the traveling, I got a college degree, I’ve changed jobs for more money, and have gone for a raise or promotion.
The easiest, most dramatic way I’ve found to double my disposable income in a hurry though was this: move abroad to a cheaper location. In my younger days, I taught English in Korea. I made money in another country while leaving the place that was sucking away all my cash.
Even moving to Korea to teach English when I was younger raised my standard of living considerably compared to how I was living in the New York City area before I left. And Korea is not all that cheap. When I moved to Mexico though, my standard of living instantly went up for me and my family and our monthly expenses dropped in half.
Our half-price home town now
Not everything got cheaper of course. Electronics and clothing didn’t, imported items in general didn’t. But a whole lot of other things did, to the point where the “basket of goods and services” any normal person would spend money on dropped dramatically. That’s utilities, housing, groceries, transportation, healthcare—all the major items.
Then since a lot of other things cost so much less, line items that would be a luxury at home become standard in the cheaper spot. Things like a regular maid, a handyman on call, symphony tickets, and regular meals out in nice restaurants.
In other words, A Better Life for Half the Price.
You can stay where you are, doing what you’re doing now, and complain that you don’t have enough money. You can whine that there’s not enough left to save for retirement, build an emergency fund, pay for your kids’ college education, or invest in a business that will get you out of the cubicle life. Or you can change everything by taking one step.
How does this work in practice? Well you can find 1,000 YouTube videos from people who have done it, expats talking about what they’re spending on rent, utilities, and food in places stretching from Argentina to Morocco, Albania to Romania, Georgia to Thailand. The narrative of spending $5K per month in the USA and then $2.5K per month (or less) abroad is so common that I’m surprised that people are still surprised that it’s so easy.
Next Steps for a Cheaper Life Abroad
Get the book here in e-book or paperback form if you’re serious about getting a better life for half the price, or check out the higher-tier packages that come with some group or one-on-one help that will push you in the right direction and make the nomadic lifestyle path or the moving abroad life option clearer.
Since this post is about cutting your expenses in half though, I do offer some free options for you, apart from all the archived posts you can read on this blog. You can get on the list to get alerted each time a new post comes out once a week. You can subscribe to the Cheap Living Abroad Newsletter at that link to see if this life is for you. That one comes out once a week. If you’re already location independent, check out the weekly Nomadico newsletter with four quick news and recommendations bits.
Follow this link below for Option 2 that some location-independent expats and nomads are exploring instead: upgrading your life substantially while keeping expenditures the same.
