How to Know Your Real Monthly Spend When You Live Abroad

Ask an expat how much they spend per month and you will usually get a hesitant number. "Around $2,000 I think?" or "Maybe $3,500? It depends."

Most people living abroad do not know their real monthly spend. They know the big fixed costs - rent, subscriptions - but the daily variable spending blurs. International banking makes it harder. Multiple currencies add confusion. And the number changes as exchange rates shift.

Here is how to actually calculate it.

Why most people get this wrong

They track in the wrong currency. If you live in Germany and track expenses in USD, your "monthly spend" changes every month based on EUR/USD movements even if your lifestyle did not change. EUR costs should be tracked in EUR.

They forget the invisible costs. Wire transfer fees. ATM withdrawal fees. Currency conversion fees. Annual subscriptions that hit once a year. Insurance. These are real costs but they do not feel like monthly spending.

They exclude one-time setup costs. When you first move somewhere, you spend significantly more than you will on an ongoing basis. First month's furniture, deposits, enrollment fees, local SIM, equipment setup. These inflate the first 2-3 months and should be separated from steady-state monthly spend.

They mix business and personal. If you are freelancing or working remotely, business expenses in the same account inflate the "living cost" calculation.

How to calculate your real number

Step 1: Track all spending for 90 days in local currency. Not in your home currency. In the currency you actually spend.

Three months covers one-time costs (you will have paid them by month 2), seasonal variation, and gives a reliable average.

Step 2: Separate fixed from variable costs.
- Fixed: rent, subscriptions, insurance, loan payments
- Variable: food, transport, entertainment, misc

The fixed costs are your floor. The variable costs are where behavior change is possible.

Step 3: Separate business from personal. If you freelance, remove business expenses from the calculation. Your personal cost of living is what you spend on yourself, not your business.

Step 4: Add annualized costs. Flights home, annual subscriptions, insurance renewals, visa costs - divide by 12 and include as a monthly figure.

Step 5: Calculate the average of months 2 and 3. Month 1 includes setup costs. Months 2-3 reflect ongoing life.

The number you end up with

For most expats in low-to-mid cost of living destinations (Lisbon, Medellin, Chiang Mai, Budapest), the real steady-state number lands somewhere between $1,500 and $2,500/month for a comfortable single-person lifestyle.

For higher cost cities (Tokyo, Amsterdam, Montreal), $2,500-4,000 is more common.

These ranges vary widely by lifestyle, accommodation type, and how much you travel locally. Your number will be specific to you - which is why you need to track rather than rely on internet estimates.

Tools for this calculation

DrakeAI works well for the 90-day tracking period. Log in local currency, tag by category, separate business expenses. At day 90, pull a summary by category for months 2 and 3.

The output gives you your real monthly spend by category, in local currency. Convert to USD or your reference currency once, at month end, for comparison purposes.

The exercise of calculating your real number is the most useful financial thing an expat can do in their first three months.

Try DrakeAI free on Android - iOS coming soon.