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Budgeting for a Successful Life Abroad: An Indonesian Expat's Guide

Budgeting for a Successful Life Abroad: An Indonesian Expat's Guide

02 Jul 2024

We all know the feeling – the thrill of a new adventure in a foreign land, the excitement of new experiences, and the responsibility of building a life away from home. But amidst the whirlwind, one question often pops up: ‘Budgeting.’ How do you manage your hard-earned money in a new country while still sending some love back home? Don't worry; this guide is here to help you navigate the financial waters and create a budget that works for your Indonesian expat life and helps you send money to Indonesia for your family awaiting back home.

Step 1: Know Your Numbers

The first step to budgeting success is getting a grip on your financial situation. This means understanding where your money comes from and where it goes. Let's break it down!

Your Salary

This is the bread and butter, the regular income you receive from your employer.

Side Hustle Power

Do you have a freelance gig on the weekends or a creative side hustle that brings in extra cash? Don't forget to include this under income.

Family Support (if applicable)

Maybe you're lucky enough to receive some love from home in the form of remittances from family.  Factor this in as well,  it all adds up!

Remember, not all your income goes straight into your pocket. Be sure to account for deductions like taxes or social security contributions that your employer might withhold before you receive your paycheck. Once you have a clear picture of your total income,  we can move on to the other side of the coin: your expenses.

Expenses: Where Your Money Flows

Now, let's get honest about where your hard-earned money goes. List out everything you spend money on,  from the big stuff like rent and utilities to the everyday essentials like groceries and transportation. Don't forget those sneaky expenses that can add up quickly,  like phone plans, monthly subscriptions, and those occasional meals out with friends.

Getting Help With Tracking

There are plenty of free budgeting apps and spreadsheets available to make this process easier. These tools can categorize your spending, create charts to help you visualize your spending habits,  and even help you set realistic financial goals.  By utilizing these tools, you can gain valuable insights into where your money goes and identify areas where you can potentially cut back.

Step 2: Prioritize Your Needs

Now that you've laid out your income and expenses, it's time to establish your spending. This is where your budgeting journey truly takes shape! Essential expenses, the foundation of your financial well-being, come first. Rent, utilities, groceries, and transportation are the non-negotiables that ensure your basic needs are met while living abroad. 

For many Indonesian expats, sending money home to support loved ones also falls under this category. It's a crucial way to ensure the well-being of your family back home.

Once you've identified these essential expenses, you can allocate funds for other needs and wants. Remember, prioritization is critical. By clearly defining your basic needs, including money transfers to Indonesia for your family, you can create a solid financial foundation and ensure you have a clear roadmap for your remaining income.

Step 3: Embrace the Power of Planning

Once you know your priorities, it's time to create a spending plan. Here are some tips:

Setting Realistic Goals

We all dream of saving a massive chunk of our income overnight, but let's be honest, that's not always sustainable. Instead, focus on setting small, achievable goals. Maybe you start by saving an extra 5% of your income each month. As you get more comfortable with budgeting and see your savings grow, you can gradually increase that percentage. Remember, small progress adds up over time!

The 50/30/20 Rule

This popular budgeting strategy can be a helpful guideline. It suggests allocating 50% of your income towards your essential needs – things like rent, utilities, groceries, and, of course, those crucial remittances back to Indonesia. The remaining 30% can be used for your wants, fun stuff like entertainment, dining out, or hobbies.

The final 20% is then dedicated to savings and debt repayment. This is a flexible rule, so feel free to adjust the percentages based on your individual circumstances. Maybe you need to allocate a bit more towards rent or groceries, that's okay! The key is to find a balance that works for you and your financial goals.

Embrace the Unexpected

Life is full of surprises, and not all of them are pleasant. That's why it's crucial to build a buffer in your spending plan. Set aside a small emergency fund each month. This will act as a safety net to cover those unexpected expenses that inevitably pop up, like car repairs or medical bills. This emergency fund can give you peace of mind and prevent you from derailing your overall financial goals so you can easily manage your finances and send money online to Indonesia.

Step 4: Cost-Cutting Strategies: Saving Like a Pro

Living abroad can be expensive, but with a few innovative strategies, you can stretch your budget further:

Utilize Public Transportation 

Consider walking, cycling, or using public transportation instead of taxis or ride-sharing apps.

Embrace Free Activities

There are plenty of free ways to have fun! Explore parks and museums with free entry days, or check your local listings for free cultural events.

Become a Discount Master

Look for student discounts, loyalty programs, and happy hour deals.

Remittance Options

Compare different money transfer services to find the one with the best exchange rates and lowest fees. Sending money home doesn't have to break the bank!

Living Well on a Budget: It's All About Mindset

Remember, budgeting isn't about deprivation; it's about making conscious choices. By prioritizing your needs, planning your spending, and adopting a few thrifty habits, you can live a fulfilling life abroad and still support your loved ones back home by making online money transfers to Indonesia. Staying connected with family and friends back home doesn't have to be expensive. Utilize free video chat apps and explore affordable international calling options. 


What are some budgeting apps popular with Indonesian expats?

Many free budgeting apps are available, such as Mint, You Need A Budget (YNAB), and Monese. The best app depends on your individual needs and preferences.

How much should I send back home to Indonesia?

This depends on your income, expenses, and your family's needs. Aim for a consistent amount you can comfortably afford each month.

What are some cost-effective ways to send money to Indonesia?

Online money transfer services often offer better exchange rates and lower fees than traditional banks. Compare rates and features before choosing a service.

Can I claim tax benefits for sending money home to Indonesia?

Generally, sending money for family support is not considered taxable income in Indonesia. However, it's always recommended to consult a tax advisor in both your host country and Indonesia for specific advice.

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