?? How to calculate the amount of money you need when moving? Approaches

Judging by the comments on the last post, this topic is quite relevant. Let me share the principles and details of the calculations.

????So, how do we calculate how much money is needed for a move and living in a new country?

????Option 1 — Quick. For those who don't have time and no accumulated expense statistics.

To get an idea of living expenses, you need to visit the?Numbeo?website — https://www.numbeo.com/cost-of-living/, select the desired country, city and see how much on average one person or a family spends.

For example, let's take?Amsterdam — https://www.numbeo.com/cost-of-living/in/Amsterdam?and see that it takes €1,015 for one person and €3,568 for a family of four to live. The specified amounts do not include rent. If you need to rent a place, don't forget to add the rental cost you find in the table on the same page. For Amsterdam, the cost of renting a one-bedroom apartment ranges from €1,540 to €1,860, and a three-bedroom from €2,290 to €3,020.

By adding the first and second amounts, we get an approximate level of monthly expenses. In the calculation above, the sum ranges from €2,550 for a single person to €6,590 for a family of four.

???Option 2 — Research. Suitable if you have time.

The internet is full of articles and videos where people share expenses on moving, settling in, and living. By finding a couple of examples similar to your situation, you can estimate upcoming costs.

Such research takes time, and it's not always possible to find enough information for comparison.

????Option 3 — Accurate. Suitable for those who have detailed expense statistics for the year.

We use the?Numbeo?site again — https://www.numbeo.com/cost-of-living/ to compare the current place of living and the new one. For example, we compare expenses in?Warsaw and Amsterdam — https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Poland&city1=Warsaw&country2=Netherlands&city2=Amsterdam, and adjust each expense item according to the "Difference" column index.

This method gives the most accurate forecast: we draw out average expenses by category into a table, multiply by the coefficient, and get the total amount. For a sanity check, multiply the total expense amount without rent and with rent by the percentage difference between cities.

Consumer Prices in Amsterdam are 48.9% higher than in Warsaw (without rent)

Consumer Prices Including Rent in Amsterdam are 61.1% higher than in Warsaw

Using the third method, we calculated the expenses accurately and understood what to expect.

????So, we have figured out how much money is needed to live in a new country. To better understand the overall picture, I recommend doing an additional exercise.

??Calculate annual expenses separately — expenses that you will pay once a year (municipal taxes, insurance, etc.). This should be included in the amount from the calculations above, but by listing the annual expenses separately, you will better understand what, when, and how much to pay.

??As a bonus, you can calculate monthly payments to have a clear picture of what amounts?definitely?go out every month — apartment rent; utility bills; insurance; subscriptions; nurseries; clubs; lessons, etc. You can also include annual expenses in your regular monthly costs by dividing them by 12 months.

??How to calculate how much money is needed for the move?

Calculate one-time expenses associated with the move — moving belongings; travel; overnight stays; document processing; 1-2 deposits the size of the rent; real estate agent services; home setting (1-3 months' budget). All together, this could cost 2-5 months' budgets.

?Is it possible to spend less on a move? Maybe, but don’t count on it. Moving into an empty rental apartment, there's an irresistible urge to furnish it to achieve a comfortable living standard as soon as possible. Without planning, this can lead to significant expenses.

#life #relocation #thoughts #money