So I’m on day three of my mini-retirement. I’m posted up in Chiang Mai, Thailand for a week or two and I’m thinking about the low cost of living and debating the merits of living in
Let’s consider a respectable middle-class salary of around $65,000. For the purpose of keeping things simple, I’ll consider a single person. A couple earns more of course but they often come with children and more expenses. After the tax man takes his cut, you’re likely left with around $4,000 a month based on a take-home pay calculator for someone living in Chicago. Before you’ve purchased anything, your $65,000 salary has shrunk to about $48,000.
You Don’t Dare stay in USA Without Health Insurance
If you’re going to reside in the US, you simply can’t go without health insurance because if health problems come your way you can be devastated. Medical expenses are the number one cause of bankruptcy in the US. Health insurance doesn’t come cheap with especially as you get middle age. Prices vary wildly depending on coverage but middle-of-the-road coverage for a middle-aged person might run about $300 a month. You’re $4,000 a month salary is now about $3,700. Your $65,000 annual salary is now closer to $44,000.
Never mind that American healthcare cost are absurdly high. Never mind that most health insurance doesn’t provide much value until you’ve spent over at least $1,000 a month out of your own pocket. We’ve come to accept these things as acceptable.
The Cost of Working
In order to get to your job, you’ll typically need to live within a reasonable proximity
Here’s where you have a lot of flexibility in how you handle things financially. I did my best to be frugal buying a Japanese economy car at a decent price and keeping it for two years before heading overseas. I would have had a much better average total cost of ownership if I kept it for 10 years instead of two. But I ended up spending over $600 a month surprisingly to have this car. I’m sure most can do better with effort but I think you’d be hard pressed to keep a car and pay less than $400 a month for TOTAL cost of ownership. So that bring us to $2,100 a month and $25,000 a year.
I won’t go over every detail of expenses but consider what we have left. You need to eat. You’re going to be cooking and eating out sometimes. Even if you’re frugal and intentional with your money you’ll be spending at least some on entertainment. Haircuts happen. Trips to the doctor happen. Medical expenses happen. Birthdays and Christmas happen. You need to shop. I think it’s fair to say that you might budget around $500 at least for the rest. Now you’ve got around $1,600 a month left or $19,200 a year.
The Value of Your American Job
So you might put the value of your “$65,000” job to actually be a bit closer to $20,000. Things ALWAYS happen that could reduce this but this is a rough figure for what a typical person might have available to them to save from their time toiling at the office for some 2060 hours of work a year.
How to Do Better!
Avoid The Taxman
One of the best easiest ways to hold on to more of your money is to shelter it from taxes to the best of your ability. If your company offers a 401k plan, by all
Go to Where Living is More Affordable
This is a big part of what’s bringing me to Asia is the lower cost of living. At the time of this writing, I’m in a very popular spot for low cost living in Chiang Mai, Thailand. The prices here play a big part in driving tourists. I stayed at my hotel for around $23 a night. Check it out on Agoda below.
Consider lowering your total cost of living by ditching your car and finding some other way. Consider lowering your cost of living even more by getting out of the US. Look at the cost of some of these delicious meals in Chiang Mai.
The conversion rate for Thai baht is 100 baht is roughly about $3 US. Many of these meals are hovering around 50 to 80 baht.
Getting rid of my car felt great. There’s plenty of ways to get around in Asia without a car.
It’s not just food cost and housing cost that drop when you’re overseas. Medical and dental costs drop as well. I was able to get a dental cleaning for $700 Baht which is about $21 US dollars without any dental insurance. I got two free tubes of toothpaste as well!
Don’t Fall for the Illusion
A fat salary is only fat if you’re able to hold on to and save most of it. If most of your salary goes out the window to cost of living then the dollar amount of your salary is worthless. Focus on how much you can save when valuing your current situation. I know English teachers in Asia that were able to save up to $2,000 a month US working part time. If your job doesn’t allow you to save this much then consider other lifestyles that might allow you to hit your savings goals sooner.
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