How To Create A Budget For Expats

If you don’t track your monthly income and expenditure, you’re not alone – it is estimated that less than half of all working people in the Western world ever bother to budget. (Asia is a different case.)

But if you’re currently living as an expat and you’re in a position where you could potentially get ahead financially, it makes sense to set up a budget and track your finances in a methodical and disciplined manner.

“Ugh, budget,” I hear you say.

I know, I know.

Nobody wants to “live on a budget”.

It’s true that the word “budget” does evoke images of being frugal, “tightening belts”, penny pinching and foregoing fun now to save for some distant financial goal, like retirement.

And it sounds pretty boring, right?

But it’s not necessarily about that, so let’s not get bogged down in the semantics at this point.

When I talk about budgeting, I’m really talking about planning and management.

Financial planning and management.

It’s simply about having a plan to get you from where you are now to where you want to be financially-speaking, in whatever timeframe you have set for yourself and using a tracking tool to help you get there.

Does that sound a bit better than a budget?

Ok, I’m glad you’re with me!

So, where and how to start?

Well, creating a budget as an expat is no different to creating one if you were back in your home country as an, uh, non-expat.

There are several steps to creating a successful monthly budget or, if you prefer, financial plan, that I can share with you here.

But before you do anything, you need to be prepared to approach your own household income and expenditure as if it were a business. As with any business, success requires income to exceed expenditure and how you allocate your capital needs to be managed efficiently.

A business managing its finances poorly will cease to be a business before too long and likewise, if you manage your personal finances badly, you’ll soon run into problems.

Tracking your money properly should be a given and failing to do it can get you into difficulties that could have otherwise been avoided.

So, remember: treat your own finances like a business.

That might sound quite daunting to some people, but actually, all it requires is some organisation and a bit of discipline.

I’ve broken it down for you into five easy-to-follow steps.

Let’s go!



To begin with, you’ll need to take a look at what you have in terms of money coming in and going out.

Look at all sources of income, including salary, dividends, “side-hustles”, etc., that come in every month.

Then look at your expenditure:

  • How much do you spend each month in total?
  • How much do you put on a credit card?
  • How much do you spend on utilities?
  • How much on food, entertainment, discretionary spending, etc?

Build a picture of your income versus expenditure and make a record of it.

How you choose to record the information doesn’t really matter, as long as you actually do it.

You could use a book or spreadsheet, or an app or even specific financial software.

If you’d like a free template in spreadsheet form to track your finances, contact me and I’ll send you one.

This process can be quite revealing and may even feel quite uncomfortable, especially if you already suspect you are not in the greatest shape financially.

For many, it will confirm what you knew already, but did not really want to face.

Either way, the purpose of this step is to give you the chance to understand where you are now and identify potential problem areas before moving on to the next step.



This step is to build some clarity and focus on where you are going.

It’s about identifying your financial goals, otherwise known and your ‘wants’ and ‘needs’.

Do you need to build an emergency fund? (If you don’t have one, then the answer this question is categorically ‘yes’. Having accessible cash available for emergency situations is an important part of solid financial planning foundations.)

Are you thinking more about your retirement needs?

Related post: How Much Money Do I Need To Retire?

Or maybe you are saving up to buy a property or a new vehicle?



This is where you set the framework for your budget or financial plan.

Firstly, allocate your income to the things you need, i.e. rent/mortgage payments, food, bills, debt payments, clothing, etc.

List them in order of importance and also allocate an amount to saving for your goal(s).

How much you allocate to this is the subject of another post, but 10-20% of your disposable monthly income is a perfectly achievable goal for most people.

The key point here is to set yourself up with a structure. You can make adjustments later as you go along.

Once you have done this part, you have basically created your budget.

Nicely done!



Now it’s time to make adjustments.

It’s likely that you’ve over-estimated your expenditure in some areas and under-estimated in others, but that does not matter. A budget is an organic, working document, rather than something that is set in stone.

Feel free to make adjustments each month until you reach a point where your estimates pretty much match the actual monthly expenditure.

In addition, you can now review the areas where you’re possibly spending too much.

Could you spend less on take-out coffees?

Do you actually use that gym membership?

Do you have to get an Uber everywhere or could you sometimes use public transport or walk or ride your bike?

Would you miss Netflix or Spotify if you cancelled the subscriptions?

Where changes come from is down to you, but the important thing here is to be honest and probably a little bit disciplined if you want to reach your goals.

You don’t have to be full-on frugal here, but use this step as an opportunity to make an honest assessment about whether or not your spending could be more efficient.

Remember, you’re treating your personal household finances as you would a business, so be ruthless.

And the thing about building wealth is, how much you actually earn becomes irrelevant if you spend it all each month, so create the plan and follow it!



The final step is simply to stick to your plan.

A plan without action is just a dream. It’s pointless.

Perhaps you will find that some discipline is needed and there will be months when you blow it, but as long as you commit to getting back on track quickly whenever this happens, you’ll be fine.

And, of course, it’s ok to treat yourself sometimes – life is about living in the moment – but don’t jeopardise future moments by spending everything you have today! Set a limit on the amount you spend on ‘fun’ and entertainment and stick with it.

You don’t have to look at and review your plan every day, but once a month is advised to help you stay on track.

Like many things in life, success comes down to habit. Once you get into the habit, it becomes second nature and you’ll be expat master of your money before you know it!

Related post: Managing Debt For Expats

Related post: 6 Super Tips To Save Money Easily & Effectively

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