Since I started working full-time in 2008 I’ve been saving money. I never knew exactly what I was saving for, but I knew that having money meant freedom, and the more money I had, the more free I would be.
A lot of “average” guys save money to buy a new car, eventually for a downpayment for a house, an exotic vacation, expensive electronics or any thing else that consumers are enticed to buy. Several years ago I decided that my savings would be my ticket (literal and figurative) to freedom of action and moving to Eastern Europe.
Back in 2010 I spent 5 weeks living in Warsaw, Poland. It was the defining experience that sparked the idea that I could move there on a semi-permanent basis.
In 2012 I spent 6 months in Warsaw, thoroughly exploring the logistics and details of what my lifestyle in Poland’s capital could be like.
In March 2014 I packed my suitcases and departed from San Francisco International (SFO) and Warszawa has been my home ever since.
While my expenses in Eastern Europe are way below those in Palo Alto, California where I used to live, it’s nowhere close to free. As I work to increase my income from my websites and investments, I’ve been living off of savings.
Ideally you will have a job or online business lined up before you make the momentous decision to relocate, but you also can’t let income hinder you indefinitely from simply making the jump and figuring things out as you go along.
I decided that I needed the freedom to work on my business and PhD studies and that a 2-year cushion of savings would be enough to tide me over until I built up an income.
In a worst case scenario I can find a “normal job” but I have no intention of doing so.
$40,000 is in my estimation a comfortable figure to work with to cover all living expenses in Eastern Europe for two years. This estimate factors in two roundtrip visits to California per year and several local trips in Europe. If you aren’t planning any long-haul flights or international jaunts before establishing an independent income, $35,000 may be sufficient.
There’s no hard and fast rule of course, you can buy a plane ticket to anywhere and leave with just your belongings and $1000 in cash, but having a buffer of 1-2 years of expenses will give you the time you need to get things going.
The time it will take you reach your target will vary depending on your income, expenses and dedication to saving. If you can develop a substitute or supplementary income that moves with you, you’ll reach your goal that much faster. My after-tax, annual income in the years before moving was about $45,000.
Here are four of the ways that I saved up $40,000 in several years before moving to Europe:
Tracked expenses– I recommend and use Personal Capital, an excellent online tool for tracking all of your savings, expenses and investments. It graphically shows you your entire financial situation and makes it easy to see where you are spending your money. I used Mint.com for a long time, but at one point it stopped updating my main savings and checking accounts from my credit union. I dropped Mint and now use Personal Capital, it’s awesome. Take a look at both and see what works for you.
Ditched cable TV– Not only is TV a waste of time, its become outrageously expensive. When I used to pay for a basic package for TV and internet from Comcast, it started at $80, over the course of several years the price crept up to $120. $1440 a year for TV and internet? Hell no!! Returning my Comcast cable box and confirming that my service was totally stopped was one of the more satisfying moments I can remember.
Moved to a tiny studio – I’ve lived with roommates a number of times, but decided that I wanted the freedom and privacy of living on my own. Its more expensive but it was worth the tradeoff. What doesn’t make sense is spending 50% (or more!) of your monthly income on rent. This is harder and harder to do in the San Francisco Bay Area. The solution for me was living in a very small studio apartment in Palo Alto, it was walking distance to work at Stanford, I had my privacy and it was relatively cheap $1000/month (I know, I know, not cheap by other standards, but the best private living situation I could find without renting a room.)
Lived within walking distance of work– Thanks to the fact that I lived close to work I very rarely drove my car and instead made the healthy 20-30 minute walk back and forth each weekday. Besides saving on gas I avoided the silly parking costs at work. They charge employees for a parking permit ($250 for a “C” permit, and $900! for an “A” permit offering better parking spots).
These are just four of the ways that I managed to save some serious cash to take the leap and move abroad. I’m in the midst of writing a short e-book listing the 40 ways I saved $40k to move to Eastern Europe. Once its finished it will be available to subscribers to the email list.
Other ways to save money for relocation that I will elaborate on include: going on cheap dates, juicing, living with your parents or roommates, canceling all unnecessary subscriptions, eating less, asking for a raise and asking for lower rent.
If you liked this article and want to get the e-book when its finished, sign up for my email list below.