So you want to live in Italy: Budgets and Saving Money
This past September I came to the great decision that I was going to try and spend a year living and traveling through Italy (and Europe). Something That I’ve wanted to do for a very long time. If you want to read more about that check out my blog post ‘So you want to live in Italy: Things to think about before you Move.’ Once the decision was made I had a lot of information and details I needed to figure out. The most important and first on my list was to figure out how I was going to afford to do this.
I had two goals in mind when I started researching my budget for Italy. The first of course was to save enough money to move to Italy for a year and be able to support myself. The second was a larger goal of eliminating my current debt. I will break this into two sections; Italy savings and debt elimination. Both are an important part of travel freedom.
Saving for Italy
Italy is not a cheap country to live in, and depending on wha type of visa you’re going for, you may need to bring enough money to last you the entire trip. This can feel really overwhelming and can get frustrating real quick as no one seems to put out a number on how much is enough. I searched for days, seriously DAYS, trying to find anything that would tell me how much to plan for. I scoured the internet looking through both English and Italian sites trying to piece together a budget for a year abroad.
I found tons of blog posts talking vaguely about ‘making sure you have enough’ but no one ever said an actual number. I know that the amount you need is dependent on what type of lifestyle you want to have. I personally am willing to go with less to have a longer stay. I started to give myself a rough estimate of around $1,000 (US dollars) a month to cover housing and food, but I still wasn’t sure if this was an appropriate number.
Finally I found a source tucked away on the darkest corners of the internet that suggested my estimate of $1,000/month is pretty realistic if you want to live in a city like Florence, Rome or Milan. That would mean I needed a minimum for $12,000 for the year JUST for rent. I wanted to spend some time in the bigger cities, especially Florence, but I was also interested in spending some time in smaller cities where my money would last longer. I’ll get more into this in a later post.
If I could get my rent down to $700-800 (or less) a month by living in a smaller town it would allow me to stay longer or travel more within the year. This would take my overall budget goal to $10,000.
Knowing now that I’d need $10,000 for the year as my minimum I had to figure out how in the world I could save up that much! I made it very easy on myself. I took the number of months until I would be leaving (12) and divided the into my goal of 10,000.
I took this number and divided it by 4 (number of weeks in a month) as I get paid weekly.
This means I need to save $208.25 every week in order to reach my goal.
I knew that I needed to keep the money I was setting aside for my trip separate from my everyday bank account, so I used my Charles Schwab checking account as my primary savings account for the trip. I use this account as a travel account as you can use your bank card fee free while traveling. I set up a direct deposit for $208.25 every week on payday. This way I don’t have to think about the transfer nor do I give myself the opportunity to skip a payment.
After I finished paying off my credit cards I bumped up my weekly payments to $300 a week. This give me a new final amount of $15,600 to take with me. Except that I decided to bump up my travel date to May.
Sell items you’ll no longer need
You’ll hear a lot of times people saying they sold everything they owned and moved overseas. There’s a reason for that. You can’t take everything with you, so it’s a good opportunity to make some extra cash and sell what you don’t need.
To compensate for the money that I won’t making when I leave in May instead of September, I have also decided to sell my car. I still owe some on my car but if I can get blue book price for it, I’ll still have between $5-8,000 to add to my fund.
Pay off your debt
This is huge! Seriously this is the biggest issue I had when thinking about moving overseas. I didn’t want to have to worry about paying down credit cards. The payments will suck your funds dry. So pay off your cards/loans before you go.
I did a similar break down of the debt I owed as I did with the amount I needed to save. I broke it down into weekly payments and played with the numbers until I had a weekly payment I felt comfortable putting down that would still allow me to save into my main fund and pay for other expenses I had. My main goal was to pay them down FAST. The quicker the better as it’s really the worst way to spend your money. In the span of a year I have paid off almost $10,000 of credit card debt. I used a combination of balance transfers with 0% APR for 18 months (which were paid off well before that.), and calling the credit card companies and getting my standard APR down.
I ended up learning a ton about how to deal with and use credit cards by paying them off. If there is one thing I can pass on it’s to call your credit cards and ask for lower apr and for a credit increase. I know that last part might sound a bit counter to what I’ve been saying but trust me it will help you if you remember to pay off you cards and carry no balance.
Since paying off all of my cards I have had several credit line increases without having to ask. I also get offers for some of the top rated travel credit cards because my credit has improved.
This has been one of the best things I’ve eve done! I had been carrying this debt with me for so long and felt so overwhelmed by it that I didn’t think I’d ever be able to get ride of it. So you can understand how exciting it was to pay it all down within a year!
When combining all of these together I have given myself a comfortable fondation to start with. I will also be earning money with overseas through different sources, which I’ll discuss later as well, to keep me going while traveling.
I hope this is a helpful to anyone wanting to do something similar. As always feel free to share what you’ve done as well as any questions!