How To Win The Lifestyle Lottery Living Abroad

“It’s a staggering number: 61% of Americans are caught in the cycle of living paycheck-to-paycheck.”

So says Forbes in a recent column quoting a CNBC story that itself was quoting recent research from the LendingClub.

Now, I guess I could have just directly quoted the original source of that data, LendingClub, but what I really wanted to dig into today is what Forbes calls a “simple solution” to this paycheck-to-paycheck life nearly two-thirds of the country is supposedly living.

Forbes‘ solution: Spend less.

As simple as it is simplistic.

Truthfully, the Forbes columnist is not wrong. Spend less and you are not living paycheck-to-paycheck. The math checks out. Always has. If you earn X and spend Y, and you manage to reduce Y to a smaller number, then you’re no longer reaching the end of the month, desperately awaiting that next infusion of cash.

There’s just one chink: Spending less in America is not so easily accomplished.

I mean, yeah, sure… you can axe the Starbucks triple-shot half-caff double latte with sprinkles and a caramel drizzle every day. For most people, though, those kinds of treats are a way of enjoying life. Few people want to spend their life depriving themselves of little joys they can afford. And, yes, they can afford it because, in the grand scheme of budgeting, the $5 designer coffee isn’t killing anyone.

Saving $3,000 A Month Living Abroad

It’s the cost of housing and insurance and groceries and utilities.

Big things matter the most because they land the biggest punches, financially speaking.

Which is why I’m now seeing so many stories pop up about Americans (and Canadians) decamping from their home shores and alighting in Mexico, Costa Rica, Panama, and particularly Europe.

Some of these are retirees. Some of them are working-age Americans, with families, in their 40s and 50s. Whatever their age, they’ve opted for living abroad as the answer to expenses at home that are spiraling ever-higher.

I bumped into one of those American families in Lagos, Portugal, last month…

A beach in Lagos, Portugal. Living abroad is a chance to live a better life, on sale.
Lagos, Portugal

My wife and I had just arrived in Portugal for our new life living here. We were spending several days in the Algarve—Portugal’s southernmost region and a very popular tourist spot—before our household items from our apartment in Prague arrived in Cascais, the little seaside village we now live in near Lisbon.

I popped into a mini market near the beach. Red Bull was calling. The man waiting in line in front of me was on his phone, talking to who I presume was his wife, in what was clearly American English. So, when he hung up, I asked, “Where you from?”

A Better Lifestyle, On Sale

Turns out he’s from Philly. And my assumption that he was there on vacation was wrong. He, too, was waiting for some household items to arrive. He, his wife, and their two daughters were commencing a new life living abroad in Albufeira, one of the best towns along the Algarve coast.

Quoting Mr. Philly: “We just got tired of the cost of living. And we were tired of worrying about our girls. Every time I turn on the TV there’s another mass shooting at a school or a club or, you know, a mall or whatever. We wanted a safer, simpler, cheaper life.” (Note: I was without notebook, so I’m mashing together exact quotes I remember and paraphrasing his broader sentiments.)

He told me he and his wife did the math and “our rent here for a four-bedroom house close enough to the beach that we can walk is $2,500. That’s a pool, a paid-for gardener, an outdoor kitchen, like 2,700 square feet. I can’t find anything remotely similar in Philly. Probably going to save more than $3,000 a month living in Albufeira. A better lifestyle—on sale. Easy move.”

I’ve heard some version of that—better life, on sale (Mr. Philly’s exact phrase)—in several countries where I’ve interviewed American expats: Greece, Spain, Portugal, Uruguay, and Thailand.

For all of them, it was never the small straws that broke the camel’s back. It was the Big Expenses. Housing, taxes, healthcare, utilities, and the like. That’s what drove them to find a cheaper cost of living.

Upsize Your Life And Downsize Your Cost

Sure, you can downscale your big expenses and not leave America. What does that really look like?

You move to a smaller house in a sketchier part of town? Move to a cheaper city, which some Americans are clearly doing? You move to a smaller apartment or condo less conveniently located to your job and social life?

You downsize your health insurance, or you upsize your deductibles—or both—to such a degree that an emergency medical expense still sends you careening toward bankruptcy? Sell your car and rely on public transit?

All of those are legitimate options. And I’m not knocking any of them. People do what they have to do to survive.

But when you can upsize your life while downsizing your living costs by moving abroad… well, you pretty much win the lifestyle lottery.

I’ll use my own life living abroad as an example. I’m living in a picturesque, seaside resort community that’s easily half the cost or less of a similar seaside lifestyle anywhere in the U.S., and Cascais is one of the most expensive places in all of Portugal.

Mr. Philly again: “We weren’t looking to leave America. But my wife read a story about some family that moved to Portugal because they couldn’t afford to live in the U.S. on, like $150,000 a year or something like that, and they didn’t want their kid having to learn ‘active shooter’ drills. She wanted me to read the story and we started talking about it, and we figured out it really made sense for our life, you know?

“Our families think we’re idiots, particularly her mom, who is a very active grandmother to our daughters. But America just got too expensive to live our life. Here, we’re getting a bigger house—with a pool—near the ocean. And it’s way, way cheaper. That’s a win.”


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