How To Plan A Family Year Abroad

How To Plan A Family Year Abroad

We’ve had lots of folks reach out over the past several months and ask about how to wrap one’s head around planning a year abroad with a preschooler in tow, so I’ll try to brain dump a little bit here while the planning efforts are still (mostly) fresh. Feel free to let me know if I missed something or you have any questions for a follow up post!

The Big Picture

The first thing I’d suggest is to think really hard about how your ideal day-to-day life would look. It’s one thing to map out a month or so of playing tourist somewhere, but most peeps will become jaded and ready to slow things down after no more than 6-8 weeks. Are you a year-round beach person or is a week of sand enough? Do you prefer seasons or 12 months of warm sunny skies? Can your current hobbies and interests be satiated in a new locale or is learning something entirely new driving your desire for an expat year? How will you integrate and meet friends?

For me, long-term travel always starts out with small group-based language classes upon arrival (3 highly recommended ones I’ve used for a month or more: Cinta Bahasa – Bali; Russian Lider – Minsk; Baden-Powell – Morelia). Not only does that make life abroad so much easier, but it’s a great way to meet locals and possible friends too. I also have a passion for learning new cooking techniques and exploring lesser known regional tourist spots, interests which are both easy to fulfill almost anywhere. For Tara, things like going to the gym and having close girlfriends to regularly brunch with are super important- luckily our current setup has involved both since we got here.

Many of our expat friends have become obsessed with playing padel (a racket game previously unknown to us), some are avid pre-dawn surfers, and others just need a steady flow of beach club cocktails. Interestingly, we once thought that year-round tropical beach life would be our best fit. But after 7 months of warm humid air, all 3 of us have been daydreaming about alpine jacket weather. On one particularly scorching day last month, while playing tourist with visiting friends, our impossibly chill 4-year old calmly whispered “Daddy, I like snow”. He said what we were all feeling, and we are now looking into wintertime Japan for a lengthy pit stop on the USA return journey! Sometimes you just have to experience things to really know, but it’s important to at least try to envision a long-term good fit.

The mundane aspects of life are with you as well when you’re gone for a year. Not every day is a vacation, downtime and banal tasks are still a thing. Banking, doctors, dentists, groceries, laundry/cleaning, local transportation, and everything else involved with “adulting”. Many such things become more difficult abroad, to say the least. Where is your comfort level with the standards and norms for essentials in other countries? We’ve personally learned here in Bali that our tolerance for inconvenience as 40+ year old parents has definitely waned since being single in our 20’s!

The Initial Planning Phase

Before you can really start making an expat year a reality, financial considerations need to be front and center. If you are a digital nomad with an income stream that is portable anywhere, great – you can skip ahead (just make sure that foreign IP addresses and security firewalls won’t affect your work). For us, that was not the case. We needed to both ensure that we had enough funds to reasonably support a year away (budgeting discussed below) without tapping IRAs, as well as a way to quickly get back to making money when we got home to the USA. Thankfully I found out that my employer offered sabbaticals after 5 years of employment. Once mostly restricted to those in academic jobs, sabbaticals have become far more common post-COVID as burnout increased among the workforce (we’ve met many people doing this in Bali). Even if it’s not in a written work policy, it can’t hurt to ask.

For Tara, being self-employed with localized clients in the US, this has meant keeping a website and SEO going strong while away. Quitting and finding a new job upon return is always an option too – but economic fluctuations make this a bit risky so that would require additional financial cushions. We’ve been incredibly fortunate that the US Dollar appreciated drastically since we arrived in Asia- giving us a lot more budgetary breathing room here. But we also have South African friends here that, due to the crashing Rand, had to quickly cut down on every possible expense – including pulling their kids out of school.

Next up is to do some serious research on a few locales that might meet your criteria for staying fulfilled for a year overseas. Ideally include at least 1 spot in the developing world for cost comparisons, which leads me to a critical consideration for most long-term expats- something called geographic arbitrage. That fancy term basically just means utilizing the strength of one’s home currency and economy to extract more value elsewhere with a lower cost of living. For instance, a typical American salary might be $60,000 while in Columbia it might be closer to $15,000. Saving diligently at home for a couple of years pre-travel (or better yet continuing to earn USD abroad) could quickly provide the necessary funds to live rather comfortably long-term somewhere where costs are significantly lower. However, we have noticed a surprising spending habit among ourselves and most expats here in Bali- we actually tend to spend only marginally less overall than we did in the USA, but we get a LOT more out of those dollars here. Note that there are related ethical concerns about gentrification in expat hotspots that I won’t get into here, but feel free to google away and come up with your own opinion.

Practicalities

Even before diving into detailed cost estimates for a year abroad, legalities like visas need to be considered. For somewhere like Mexico, an American can stay 180 days without even thinking about visas. The basic Schengen visa for Europe though only gives Americans 90 days per 180 days in any one country. For some places, it’s a mere 30 days before you have to do an inconvenient “border run” to reset the clock – making long-term stays in such places untenable. Most of Southeast Asia offers 90 days of hassle free travel, but Indonesia makes it much harder. A typical tourist visa gives you 30-60 days for a reasonably low fee, but “border runs” involve a 3+ hour flight from most expat locales (like Bali). You can get one for 6-12 months, but there’s an exponentially greater amount of paperwork and costs that come with that approach.

Another huge thing to look into for parents is schooling options. During the initial planning phase, we had chosen Southeast Asia – having a love for the cuisine, culture, and it being relatively affordable on the whole. But when looking into quality international schools that wouldn’t break the bank, our list of possible countries shrank a ton. And it’s not as simple as just picking a school and being accepted either. I reached out to several schools for our son that I felt comfortable with, and it took nearly an entire year of communication and processes to get him accepted and enrolled. We’d considered doing just a partial year at school and trying out worldschooling (similar to homeschooling but more of learning through travel experiences), and are very glad we didn’t. After a couple months of traveling as a family, it became clear that our son desperately needed regular interaction with other kids- and we likewise needed some time to not entertain an energetic 4 year old!

Insurance can’t be ignored either, both health and travel plans. If illness or an accident should befall you abroad, how is that going to be handled? I was extremely lucky in this regard in that my employer kept my health insurance going while I was on sabbatical, and let me accumulate my very low share of the premiums to pay off when I got home. But even this doesn’t cover things like emergency repatriation- thus making a comprehensive travel insurance policy essential. If I were in a nasty motorcycle accident (common in Bali), I’d wanna be on the first flight back to the USA for western-standard care, but the $100,000+ cost sans insurance would kill that option. Also on the motorcycle tangent- I learned that unless I were licensed to ride motorcycles in the USA, health and accident insurance would not cover a crash! Thankfully I had just enough time before heading overseas to take a motorcycle course and update my driver’s license. While few people ever read insurance policies, it’s crucial to do so to make sure your specific needs are covered.

One last thing to mention here is staying on top of ever-shifting entry requirements- which COVID made incredibly difficult to do. While showing the American CDC vaccination card and filling out all kinds of paper/online forms within varying timeframes is blissfully no longer required in most places (even Europe was very hard to navigate in 2021), such things can pop up with incredibly short notice and ruin months of otherwise sound travel planning. The US State Department website is usually pretty good about staying up to date on country-specific requirements. CDC’s website is helpful for knowing what vaccinations and/or meds (like anti-malarial pills) are recommended or required too. Some places in Africa used to (may still?) jab travelers with yellow fever vaccines at immigration if they didn’t have a WHO approved yellow card proving prior vaccination. Deciding between an impromptu injection from a questionably clean needle or getting put on a return flight is not a not a great way to start a trip!

Budgeting

Now for my favorite part as a nerdy accountant- coming up with a budget. There’s a lot of guesswork that goes into a budget for something like this, but having extensive overseas travel experience already and an infinite amount of internet resources helped a ton. By the time I got through the initial planning and practicalities, we’d pretty much decided on Bali for our year abroad- making the estimations a bit less ambiguous. Tackling the main expense categories separately allowed us to make better estimations, and to be able alter them as certain circumstances changed.

The biggest expense by far is lodging and can really impact the feasibility of extended time away. By this point, you should have a decent idea of the target neighborhood(s) that would allow for easy transport to/from the places you’re likely to frequent the most. For us, and most parents, that’s gonna be near a school. Unfortunately, long-term lodging closer to expat amenities like international schools comes with a cost premium. I’d suggest to start looking at Airbnb (bearing in mind possible fluctuations due to tourist seasons) for the first month or two, and local real estate agent listings for longer-term options when you have a feel for your new “home”. Make an annual lodging cost estimate and put it on a spreadsheet. So far, we’re significantly over our $12k mid-point lodging budget owing to things we couldn’t have foreseen. After we’d made our budget, China’s avid travelers came out of 3 years of COVID lockdown and had savings ready to blow on extended travel around Asia- driving up prices everywhere. Then Russia started a wartime mobilization  – driving millions of  draft dodgers to Southeast Asia (notably Bali and Phuket), exacerbating the situation. All the more reason to pad your budget by at least 15% for the unexpected!

Your next largest expense is what I tend to lump together under meals, local travel, and incidentals. Individually, these are tough to track and are a mix of frequent smaller cash and credit card transactions (regional trips, dining out, doctor visits, everything not addressed separately). But historically, for our family of 3, traveling in the developing world has averaged out to roughly $60/day – while being able to do pretty much whatever we want without thinking about budget restrictions. With inflation, that’s now about $70 and we’re right on target so far. Other big categories are specific to one’s circumstances – such as school tuition, visas, and insurances. For us, these line items added about $10,000 to our budget for the year.

The lastly major category is flights. This can be one of the largest expenses or one of the smallest, depending on how much bouncing around is in the cards (before, after, or during your settling down period). Our expenditures are much lower than one would expect based on all the trips we’ve taken locally and en route to Asia. The trick? Our constant and religious accumulation frequent flier miles via credit card sign on bonuses. Many of these cards come with 100,000+ miles on US domestic carriers (also usable with their global alliance partners). If done with enough lead time, that alone can be enough to get 3 one-way tickets over the ocean! All travel-focused cards come with some degree of travel insurance too, lessening the policy needs cited earlier.

To best utilize these points, it’s best to start collecting significant balances on all 3 major alliance networks. Then see which one has good connections to the continent you are going to for your rough dates. Book your long-haul flights 4-6 months beforehand when options are plentiful – just targeting major global gateway hubs if need be (Tokyo, London, Sydney, Johannesburg, etc). Then pay cash for cheap regional flights to get you around from there, which don’t require nearly as much advance planning. Regional flights have been so cheap here (some as low as $30!) that we actually overbudgeted for that category. The map below illustrates the point: use FF miles to get to a global hub (purple) and cash for regional carriers to your destination.

This is a brief summary of our pre-travel estimates for the year (by category), 6-month targets, and actuals at 6 months. We expect lodging to come down drastically since we now have better local knowledge and connections, and some things like visas and school are front-loaded. Everything else will probably stay roughly as expected, as we plan to do a little bit of travel again en route back to the USA. I plan to do a follow-up post after we’ve been gone a full year to see how much this actually cost us in total vs estimates.

A side note to also consider with budgeting is called opportunity cost, which relates to the savings one could have done had income generation continued as normal. A self-employed friend in Texas always used to factor in how much business he’d lose by being gone on a proposed fishing trip- annoying, but he wasn’t wrong to think about that. Our normal savings and investments (beyond maxing IRAs and such) definitely took a swan dive this year. It’s important to think about how a hugely expensive trip might impact long-term financial goals and weigh the costs vs benefits. But I can’t stress enough that being able to spend so much time with our rapidly growing little boy, unencumbered by the rat race, has already been worth far more than whatever financial hit we’re taking! COVID and the growing global conflicts of today have been a clear reminder for us to make the most of our time, while we still can.

Lessening the Financial Burden

This post is already much longer than I’d anticipated, so I’m just going to add a preview of another post I plan to do next month. That one will focus on financing tricks specific to going abroad for a year- including investing, tax planning, and asset management strategies. Our $65,000 budget for the year will be significantly offset in the long-term via some fiscal creativity and advance planning. With enough luck, the overall hit to our pocketbook will be small enough to start planning another year away soon. Stay tuned!

Update! Here’s another great financial blog post about moving abroad!