Reader Stories: When is a lifestyle upgrade OK?
Published on - November 11th, 2012 (by Ellen Cannon) This post is from CYH, who is about to become a graduate student in another country so she’s examining her lifestyle carefully. This story is one of our Reader Stories series. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want submit your own reader story? Here’s how.
I’ve saved. I’ve paid debt down like the last remaining survivor beating back a zombie at the door of the space shuttle to Mars. But, now that I have some financial freedom, how do I make lifestyle changes without incurring lifestyle inflation? When does it become lifestyle inflation?
The Scrooge in me wants to keep scrimping and saving, but at some point, I just want to live better and have nice things. As such, I’m currently going through the process of semi-upgrading my lifestyle. I can make the choices that I’ve been wanting to make, mainly choosing quality over disposability. Also, now with an imminent move to a tropical country for graduate school, I’m also finding that many of my clothes will not be climatically appropriate. Instead of getting there and realizing that all my stuff is not going to work, I’m planning ahead and investing some time and money to prepare. Here are some things I’ve started doing:
- Combed through my possessions multiple times, whittling down the amount of Stuff and donating useable things that I don’t need or would not use again several years from now. My mantra has been “BE BRUTAL!” Some things that passed my inspection the first or second time did not make it through the third or fourth time. Really thinking about whether I like something enough or would really need it four years from now (e.g., all those sweaters I’ve managed to pile up) takes some time and second-guessing, but in the end I know I’ll make progress.
- Participated in a local Community Supported Agriculture summer season for somewhat more expensive but better quality vegetables. I got a half-share, and even if they only gave me delicious tomatoes, I would be happy as a clam. However, this experience has also exposed me to some vegetables that I would never have bought for myself.
- Invested in a small closet-full of merino wool(!!) and other moisture-wicking clothing (specifically, underwear, which might not be the first thing you think of, but after spending a few days literally sweating my butt off, this is something I know I will need!).
- I don’t eat out very often anyway, but now when I occasionally do, I’ll go back to a few favorite spots that may have been out of my budget range a few years ago. Places I won’t be returning to aren’t worth my time and money if they truly aren’t giving me something delicious to fill my belly. Otherwise, I could cook for myself and my friends and have a better meal. Say, instead of spending $20-25 on eating out for lunch a handful of times, I’ll go out to dinner with friends.
- These feet I have are the only feet I will ever have (hopefully, though it looks like there are some good options if I need them) and good shoes go a long way to keeping those feet happy.
What I plan for the last few months before I move:
- Go through my wardrobe and closet a few more times to get those last few items to a collection facility where someone who would really use the clothing will have a chance to find it.
- I’m considering finally making the leap to a smartphone with a data plan…or at least a texting package. So far my dumbphone (which is actually an older generation smartphone demoted to dumbphone functionality) has worked well in conjunction with using my iPod Touch on WiFi signals. But tweens seem to have more “grown-up” mobile plans than I do, so it might be time to bump up.
In this process, it has been important to remind myself that I’m not getting rid of old things just to make room for new things. I also need to keep in mind my values and especially examine what I actually use vs. what I think I would use. For example, I occasionally enjoy trendy clothing, but I don’t wear them very often. In this case, I would not consider many of these clothing items as “needs,” but as “wants” because I do not use them enough to warrant bringing them with me halfway around the world or spending a lot to acquire them in the first place.
Overall, the threat of moving abroad for several years has really helped me to gain perspective and focus about my Stuff. I might have kept some things for another year or two, but knowing that I don’t want to come back to boxes of Stuff that I’m just going to give away anyway has been a useful reality check. But, I still think about those questions quite a bit: When do lifestyle upgrades start to bleed into inflation? How do I make upgrades without getting to that bleeding edge?
I worry that this flurry of changes and the expectations that come with them will be hard to readjust to my new graduate-student budget, and for a new life in a new country (which is also an extremely consumerist country).
Reminder: This is a story from one of your fellow readers. Please be nice. It can be scary to put your story out in public for the first time (which is possibly why more people don’t submit stories). Remember that this guest author isn’t a professional writer, and is just learning about money like you are. Henceforth, unduly nasty comments on reader stories will be removed or edited.
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I think it only becomes lifestyle inflation when you start trying to keep up with the Joneses. This could be the stereotypical example of making the decision to upgrade your house, only to decide you need new furniture, landscaping, and a luxury car in the drive like your neighbor. But, it could also mean deciding it wouldn’t hurt to expand (or add) a cable plan because adding a data plan and smart phone didn’t hurt too much. As long as you make conscious decisions on changes and then stick with just those, you’re still in control. If you’ve been living one way successfully for awhile, make a change, and then suddenly decide you need more changes, you’re letting inflation run away with you.
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In my opinion, now is not the time to upgrade your lifestyle. You need to save every penny you can in anticipation of the upcoming move. There’s no way you can really know how expensive it’s going to be in the foreign country until you’re living there. And don’t upgrade your phone now. Wait until you move and see what you need or want then. (Upgrading because every tween has better than you is also an extremely poor reason. Only buy as much phone as you truly need.)
As far as what personal possessions to store, it depends on how you’re going to store them for the four years. If you’ve got parents or other relatives who have the room and willingness to store things for you, and they’re extremely unlikely to move in the next four years, keep more stuff now. If it would be a burden to them, get rid of nearly everything you don’t plan to take with you.
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Thanks for your advice! Just for some context, I have been living at home with family, and have been able to save up quite a bit. I also have a pretty good understanding of what my expenses will be there, and I will have a stipend that will just barely cover those expenses. As for the phone, this country is in Asia, where phones are actually more expensive than they are in the US because there is not subsidizing of phones and they just charge more for the darn things. Considering this, I may just buy a used or new unlocked phone before I go so that I don’t have to when I get there.
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I have been living in Asia for a little over a year now and would highly recommend NOT buying a phone in the US! Cell phones and other electronics can be regionally specific and most US phones will not work over here. I think of a cell phone and a data plan as tools, not an indulgence, especially when traveling in Asia. Can you ask some of your contacts what they use, guesstimate costs and plan accordingly? See if they know of anyone willing to sell you a used phone or take over their contract, at least until you are settled. Good luck and best wishes on your next stage of life
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Hi Megan, thanks for your advice! I’ve spent quite a bit of time in Asia, and I know that having a data plan will help me to not get lost in a new place! This is mostly why I would opt for a smartphone of some sort. I’ve looked up what frequencies would be necessary to get service where I’m going, and will make sure that whatever phone I bring over will be compatible.
You make a good point about asking people I know if I could possibly buy a phone from them. I hadn’t thought of that! Thanks!
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I would not do a lifestyle upgrade right before grad school – especially considering the grad school is out of the country. I would wait for the phone upgrade until you get to the new country. US data plans can be VERY expensive in other places, and that’s assuming the phone will work there.
On the other hand, I am in the midst of a life style upgrade right now. I’ve been out of college for 2 years now, living with a roommate. Tomorrow I go to sign the lease on my own apartment. It is a little scary thinking about how much more my own apartment will cost and how I’ll be saving less. In reality, I will be going from saving 50% of my take home to about 30%, which is still great. But since I’ve never owned an apartment, I will have to completely furnish/supply everything from a couch to pots and pans.
Is this lifestyle inflation? Maybe. But I’m at the point where having my own place with my own things is worth not saving as much. I’m kinda tired of living like a college student, and I too want some nice things. So my plan is to acquire slowly, get quality where I can get it on sale, and having a budget for all move-in and furnishing expenses.
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Stacie,
As you furnish your new apartment remember thrift stores, Craigslist and Freecycle to name a few sources of house hold items. Items like dishes, pots and pans to name a few don’t need to be new. The worst thing you could do is to start “shopping” at places like Crate and Barrel where you would pay through the nose. Save up for nicer stuff and ask for items for Bdays and holidays. When I bought my first place I got a vacuum cleaner I think for Christmas.
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I’m also excited to move out. I’m currently living with my parents and sister (my older sister only just recently moved out after getting hitched). I will have to adjust for more money going towards housing, but I think I will be able to manage as long as I find a place that is within my budget. The apartments for rent where I am going are often fully furnished, so thankfully I won’t have to worry about that! I may have to buy some kitchen things though.
Thanks!
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I’m curious as to what you’ll be doing in this other country. Really just for context to better understand your story. My first thought was scientific field work, just because that’s what I’m familiar with and I know several people who have been in the Amazon doing field work. If that’s the case, I know from personal experience that it’s very easy to spend a lot of money on clothes, not to mention gear. And it’s not like I bought everything from REI (I could never afford that!). For me, some of that was worth it and some wasn’t, but I didn’t know until I really tested stuff in the field.
I thought your comment about the extremely consumerist country was interesting. Just don’t use that as an excuse to overspend!
I don’t know if I’d worry so much about lifestyle inflation right now. Just try to spend within your means and keep a critical eye tuned on your expenses. It’s really up to you to decide if you’re unhappy with your expenses. People throw around this term lifestyle inflation, but if you’re happy and you’re meeting your savings goals, I’d say eating out and using your money on quality clothing and produce are fine. But this is all ultimately your decision.
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Actually, I will be doing science over there! I don’t have much in the way of field clothes (nor do I know if I will be doing a whole lot of field work or just some, since I’ll be doing some geeky computer modeling things). I have been buying REI and EMS gift cards on discount and using them when I need to. Thanks for your advice!!
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I’m a little too confused about your situation to make any comments. Will you be funded in school? Is your cost of living going to drop? What goals have you reached that are prompting this question? In other words, what IS your financial situation?
That said, I’ve asked the same question, for sure. My boyfriend and I lived together while he was in grad school (living on loans) and I was making roughly $15,000/year. Then we spent three years with both of us working in well paying jobs, with a combined income that allowed him to pay off his debt in a year and us to live very comfortably. We could’ve blown a lot of money in a lot of different ways, and with virtually no transition period from living paycheck to paycheck, we very quickly had to assess what was important to us. He needs nice clothes for work so spent money there. We both really missed eating out so we do that once a week or so now. And we spent a little more money on better quality groceries. But otherwise, we haven’t gone off the deep-end with spending.
That’s helped a lot now that I’m back in school. I’m having a hard enough time letting go of certain habits (like buying lunch out whenever I want to) and it’d be a lot worse had we let our lifestyle inflate anymore than we did.
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I’m sorry that you are confused! I wasn’t sure how much information about myself was necessary or wanted in this post.
To answer your questions:
I will be funded
My cost of living will increase slightly
I’ve reached some goals of saving a chunk for retirement, and having a large enough cushion that can help supplement the funding I’m getting for the next 4 years.
I’ve been in graduate school before, so I have some memories of what it was like to not have income at all. I really wanted to go through this process because of the values that I believe in. I am an ecologist, and I have gotten to the point where I would like to put my money where my mouth is.
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Well, it’s hard to say without knowing what country. Is it 1st world or 3rd world? Have you spent much time there? The first time I moved to Japan, I bought all sorts of gear, all of which I could have gotten there of course. I might have saved a little money buying it here, but I ended up not really needing it, and could have gotten even better stuff there.
That is to say, the local stores are selling things needed for the particulars of living there, so it may be better to wait. And, if there is something that you discover you really need and cannot get, then you can get it when back in the US visiting, or have it shipped.
If its a remote or undersupplied area, then you’d best talk to your host or former students about what you’ll need.
Grad school is never time to upgrade, so aside from minimally necessary gear, I suggest living even more simply than you do now. Don’t accumulate more than you can pack up and carry.
Except— make room in your budget for experiences! Eat local, travel, take pictures. Experience spending should be your focus. Do continue to budget, and make good choices. Is the same coffeeshop every morning or same club every Friday a special experience? Probably not, so save your money for the good stuff. As a graduate student my husband could have had a week long layover in Christchurch, but was too broke, and couldn’t. Twenty years later, he hasn’t made it back there and regrets his loss– so sad! So plan for the memorable experiences!
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I’m living in China at the moment, and I agree with this! I brought a bunch of things that people said I would need, but I didn’t. I’m glad I brought a bunch of medicine (they don’t sell the same stuff here), but other than that, I could have waited and bought most things for less money.
Also, local food is better and cheaper than what it considered Western here, so I fully agree with that!
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It is arguably a very developed country, with very good food to boot (but it almost makes me sad that it would probably be cheaper to eat out than to cook). I’m actually a little concerned about not having access to healthy food.
I have been looking forward to planning for more experiences because it is easy to get around, rather than for more purchases. I don’t expect to need much when I get there besides food and basic needs!
Thanks for your advice!!
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Definitely second the waiting on a phone unless you are sure that it will work there and not cost you extra (which I am almost sure it will)!
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If were you, I would wait until after I get to that country unless you’ve already been there and know exactly what to expect
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This reminds me of the time when I had to move from the US to a tropical country after I completed my graduation. One of the first things to go were a plethora of books that I had been holding on to. That was both easy and difficult, coz even though most of the stuff are on the internet, I still like the familiarity of a used book, with the innumerable markings and personal notes of mine.
When it came to clothes, I easily parted with huge bags of clothes, especially ones I didn’t love anymore. But there were still some clothes that I had been saving up for a special occasion or was a favorite and I ended up bringing all those half way around the world to the other country, even though it was almost impossible I could wear them again coz it is a conservative culture compared to US. So those pretty tops and skirts are just lying around in the suitcase.
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I agree on holding off on the phone upgrade until you get there and the same may go for your clothes. Unless you have spent a lot time in the country and even on the campus you may find what you THINK you will want to wear is not what you will when you get there. Clothing choices on many campuses are decidedly casual.
Store only what you desperately love and are sure you will want 4 or 5 years from now. I had a large home when one of my daughters went to to a distant campus so she stored 20+ boxes of “must-haves” with us. After graduation and marriage she went through the boxes and donated 98% of them to Goodwill and truly couldn’t imagine why she kept much of it.
Finally, the goal of saving and scrimping is not to save and scrimp. It is (in part) to have enough money to buy what you value and to NOT buy what is frivolous, to you. You can save in order to achieve lifestyle inflation in the areas that matter most to you. I make and save a lot of money and eat out frequently as that is important to me. And we aren’t talking fast food here! I will always have a fast and current notepad and other electronic devices and travel when/where I want. But…my spending in other areas (housing, cars, spa services) is quite frugal if not spartan. Decide what YOU love and let those things/experiences be a priority to you. Good luck!
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I enjoyed reading your story, and can tell you’ve developed some wise frugal habits at a (presumably) young age. I found, however, it’s not what you said, but what you DIDN’T say that gives me pause.
How old are you? Have you eliminated all your debt, i.e., undergraduate loans, credit card debt, car payments? Will you be generating income while attending graduate school, or accumulating debt to pay for it?
What have you saved for retirement?
These are the most pressing questions that I’d need to reconcile with myself before allowing an increase in lifestyle inflation.
Best of luck on your next chapter! Please keep us updated.
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Hi Catherine,
Thanks for your advice!! Again, I wasn’t quite sure how much info to expose about myself, but since you asked…
To answer your questions:
I am just past my mid-twenties. (I don’t quite want to say late twenties just yet!)
I am free of debt, except for whatever is going on that month on my credit cards.
I will have an income (scholarship with a monthly stipend). This should cover basic needs.
As for retirement, this is what I struggled with the most in the past few months. I know I won’t need a lot of extra money in the next few years, but I might need that money when I get out of graduate school. So I debated how much I should put into my work-sponsored 503b account. I already maxed out my Roth IRA, but this was not nearly as close to being maxed out.
I decided that I might need that money if/when I finish, especially in case there is a long-ish transition period before a full time job.
Thanks!
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I find myself mentally asking a some questions that aren’t really answered here, and that’s throwing me off a little, such as what country/region will you be living in and how easy is it to get the clothing you need and a good smartphone once you get there. I think I’m assuming many things will be cheaper once you get there, which may or may not be the case.
It sounds like you’ll be storing your stuff somewhere while you’re gone, if so, is space at a premium? Because I don’t think I’d go thru a fill scale purge and toss right now. No telling what you’ll need when you return.
Regardless, I applaud the way you’ve paid down debt and adjusted your lifestyle. I suppose Suze Orman whould want to know how old you are and what other expenses you have and if you’ve saved for retirement, LOL, but I think you’re making careful, thoughtful and wise decisions. So why not embrace a lifestyle where you can enjoy quality and abundance while still keeping an eye on the bottom line? You seem to have lived frugally in the past and I don’t think all those good habits ever really leave us. And living in the tropics can be fun! Wish I could go myself! Have a great time!
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If you’re going to grad school abroad, you’ll want a pile of cash as big as you can. They sell clothes in the tropics– much cheaper usually than in first-world countries.
You know the old saying about traveling– bring half the stuff and double the money you think you’ll need.
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They do sell clothes in the tropics! I plan on not bringing many, or any, business-y clothes with me because they are not the easiest to pack, and I’ll be able to get them over there if I need it. I think the biggest category of things I’m getting rid of are T-shirts. I probably have about 30 from the high school to college era, and most I will never wear again.
Thanks!
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I may be the only person here to say that sometimes grad school IS an ok time for lifestyle inflation. My income actually went up in grad school, so yes, I increased my savings heavily, but I also bought more varied foods to cook at home instead of relying so heavily on rice and beans, and started going out to eat a couple times a month instead of never. I think when you’re really living at a level where you feel like you’re constantly on the edge, it would be stupid to stay constantly stressed out or go without basics (e.g. not replacing bread if your roommate eats it because your budget is so tight, even though you bought it to make lunches for work) after your financial situation improves. If you’re living at a poverty level not just as a frugal choice, but out of insecurity, then “lifestyle inflation” when you have more breathing room can really improve your quality of life.
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That is interesting that your income actually went up! That makes me hopeful that I can continue to make some of the choices that are important to me. I don’t want to be constantly on the edge, as you put it. I definitely do what a good quality of life, or as good as I will be able to afford. The hard part will be admitting that I won’t be able to save as much from month to month as a result. But from the sense I get from your comments, I’ll have to work at just letting that go.
Thanks!
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Thanks for sharing your story, Ellen. I’m a little surprised by the responses you’ve received so far, as I think the process you’re going through is very nearly the opposite of lifestyle inflation, which I think is closely linked with mindless spending. Each of the changes you listed is something you seem to have thought carefully about, and have decided is worth more to you than additional savings.
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I think that lifestyle inflation happens when you stop conciously evaluating the extra stuff or activities. As long as you have clear goals and the stuff/activities don’t inhibit the goals, then you’re OK. That said, going back to grad school is not time to significantly increase your lifestyle. A few treats here and there, sure, but you won’t be earning a regular check for a few more years, so it’s best to keep the student life as long as possible.
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“I’ve paid debt down like the last remaining survivor beating back a zombie at the door of the space shuttle to Mars.”
I loved this sentence.
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“When do lifestyle upgrades start to bleed into inflation? How do I make upgrades without getting to that bleeding edge?”
Meet your financial and saving goals, whether it’s save 5% or 50% of your salary, putting money away for a trip or for a nicer car, whatever and do it without spending more than you earn. Do that and it isn’t lifestyle inflation, it’s concious spending and upgrading. Too often the message on the PF boards is “If you spend money on anything other than an experience that gives you a feeling of pleasure you must be flogged because you are engaging in a sin against the planet and humanity” If you want something, have the money for it, are meeting your goals which you have thought out, get it. You will make mistakes, you will buy things with good intentions, and they may not pan out. Other things may become must haves. Just adjust as necessary and keep it aligned with your overall goals.
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My daughter moved to Mexico and discovered that here US phone was only good for calling the US and the service was very expensive. She also tried getting a local phone with US service and that was very expensive as well. So for months she kept her American phone and had a home phone with a call-out free to US plus she discovered she needed a Mexican cell phone to make local calls. Her communication bills were very high. I would recommend that you wait until you know more about the new location’s phone system before you invest in a better phone you may not be able to use. Text and data calls can be very expensive.
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First of all, congrats on paying down your debt! Now that you have some flexibility, I think it’s best to upgrade your lifestyle in places where you will get the most benefit.
If a smart phone will increase your productivity at work/school/etc then it’s a worthwhile upgrade. If you’ve been spending long hours commuting to work on public transit, getting a car could really increase your quality of life by giving you more time.
You really have to worry about lifestyle inflation if your upgrades exceed your income or if the upgrades don’t provide a substantial benefit.
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Thanks! I think I might wait on the data plan for a smartphone, as there might be plenty of WiFi available. I think I’ll test the waters during the first month, and try not to freak out!
I feel like I’ve been in PF training for the past few years, and this change will be my first real test. hahaha
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Great article. I have thought about this as well. After I graduated college and got my first full time job, I called a friend and spoke with him and he asked “So what are you going to buy now that you have a real job? A new car?” I didn’t purchase anything. In my opinion, this is where a lot of people start “lifestyle inflation”. I currently maintain similar spending habits from when I was an undergrad.
Your scenario seems similar to someone going on a vacation and they want to buy new and different belongings to use there. I’ve had that mindset. And luckily, talked myself out of making a new purchase for a camera, footwear, and a backpack that I “needed” for the trip. There is a good possibility that you have already own enough warm weather clothes, but do not feel they are adequate because you are starting a new part of your life.
I don’t know how much money you have, but you only have financial freedom if you have money. I would take what you currently have and hold off on spending any of your savings especially if you are a full time student. Adapt when you get there and don’t let the consumerism get to you.
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Thanks for your advice! I have successfully talked myself out of buying things that I don’t need (camcorder, new sleeping bag). I’m pretty proud of myself for that, and I hope to continue to be smart about things. The biggest concern that is making me fret is that many things (clothes, pots, pans, everything) are quite expensive where I’m going because they have to import everything.
I think the first month will be most challenging because I’ll be so overwhelmed by settling in that I might feel like I need to buy things, that in reality I don’t really need.
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It seems to me that you’re either going to Malaysia or Singapore. I live in Malaysia so I’m not too sure about Singapore, but I would suggest waiting to get a phone plan until you get there. It’s much cheaper. I know this because I lived in America for four years. Also, American phones are notorious for being locked so I think it would be an investment if you bought a phone there as you could basically use the phone anywhere in world. It doesn’t even have to be expensive. You can definitely get a decent basic smartphone, just check with the locals to make sure you’re not getting ripped off!
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Hey all, just wanted to give an update. I’ve been in my new country of residence for about 4 months now! It has been tough to adjust to having a stricter budget. Although I haven’t figured it all out yet, I’m glad to be able to continue learning through this blog and others! Thanks for all the comments and support and please check out my blog if you get a chance!
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