As part of our Financial independence, temporary retirement dream, our family of five moved to Norway in July of 2019. Now, Norway has a lot of things to love: fjords, mountains, great people, excellent social safety net, playgrounds to die for, and a ton of other things. But the cost of living is NOT one of them. We recently splurged on two packages of boneless, skinless chicken breasts that were on sale. Total cost for just over 3 lb of chicken? Almost $20. Did I mention they were on sale? So planning to move to Norway with kids with almost no guaranteed income was a huge challenge. But almost a year into our 2 year odyssey, we are doing great. While no one can predict the future, it seems as if our financial planning has worked better than we could have imagined, even with the unplanned chaos of a global pandemic.
If you’d like take a peak at how a normal family plans to move to one of the most expensive countries in the world with no income, read on.
Saving money – a starting point
When we decided to move to Norway, I was building my micro-business, World of Wonders. We were living 100% on my husband’s salary because all of my income went back into the business. By chance, I got a job offer from the school where I had previously taught. #pikeproud Although I loved my business, it was just starting out and there was no way that I would be able to make the amount of money we would need to save. Plus, in a stroke of luck, they were offering me my dream job – teaching English as a new language to newcomers.
So step one was increasing our income. Now just earning more isn’t helpful if you don’t keep any of that money. So even though our income increased by about 40%, our lifestyle didn’t. The same day I filled out my paperwork at the corporation, I went to a new bank and started a savings account. My check was direct deposited and never even hit the accounts we paid bills from.
That means we were able to ENSURE that we were saving money. Using any of the money from my salary had to be a conscious choice. Because all of that money was at a different bank, there was no way to lose track or make a mistake and spend more that my husband’s salary. To get to that money, we had to KNOW we were dipping into it.
(Over-) Estimating costs
Once we had some savings going on, we needed to have an idea of how much money we needed to save. I used a lot of resources to estimate food, housing, and transportation costs. But the most important thing here was to OVER estimate them. In other words, I always added about 30% to what our thought our costs would be. I planned $2000 per month for housing, $1500 for food, $700 for utilities. Those were our upper limits. I knew if we stayed below those numbers we would be OK. If we went above in any category, we had to make it up elsewhere.
Another variable we had to consider was the exchange rate. When I was planning, the exchange rate hovered around 8.5 Norwegian Kroner (NOK) to the dollar. I planned everything on the basis of 8 NOK to the dollar, giving us another bit of cushion.
Savings, meet costs. Costs, meet savings.
So now, it was time to get those two numbers to meet up. $6000 per month seemed to be a budget that would cover our expenses if we lived carefully. Although we didn’t have jobs, I had a little income, about $1500/mo. after taxes, from my rental properties That meant that we needed to save $4500 for each month we were living there. But once again, I added a bit more cushion and decided to go with $5000 as a goal. As anyone with a calculator can tell you, that meant that to live in Norway for 1 year, we would need $60,000. For two years, we would need $120,000.
Note: That did not include the expenses to actually move to Norway, which we planned to cover in large part from the sale of our cars (which we were not planning to replace in Norway) and other household goods that would be downsized.
After the first year of saving, we were woefully short, ending with about $70,000 in the bank. (We had started with about $30,000 from an emergency fund and my take home pay was about $40,000 for the year.) Had we gotten accepted into a Masters Degree program, we would have moved to Norway, but I would have hyperventilated a lot over money. As it turned out, we did not get accepted, so our plans were pushed back a year and we had another year to save.
During the second year, we discovered that my husband could put money in a 457 account. (If you want more info on what that is and how it could literally change your life if you work in the public sector, check out my blog post here.) That allowed us to put some money away pre-tax instead of post tax and sped our savings up a bit. I was also able to save more of my income from the investment real estate.
By the last pay check of my job, we had approximately $120,000. We knew that barring massively bad luck, we would be ok.
What we did NOT cut
We were super fortunate to be in a position where we didn’t have to cut to the bone in order to make this happen. Although we cut a LOT of stuff that a lot of middle class families don’t think twice about spending money on (kids birthday parties were simple, we drove 10+ year old cars, didn’t go out to the movies, bought clothes second hand), we did keep a couple of splurges that meant a lot to us.
The first splurge we kept was our cleaning service. First of all, it was way under market price and we had had them for several years. Second, my husband and I both had other priorities, and it was not the time we needed to put the effort into training the kids to do a better job. Robb was focused on traveling more at work to create and sustain a network that would hopefully help him re-enter the job market after 2 years out.
I am a cooker, not a cleaner. I spend a ton of time making homemade meals, freezer meals, and cheap snacks for the kids. I didn’t do the numbers, but I felt like if I tried to do the cleaning, we would eat out more and we wouldn’t end up saving much money in the end.
The second splurge was a family trip to Florida. We did this for many reasons. First, we had never taken a big trip with my parents and we didn’t know when we might have a chance to do so again. Secondly, my parents offered to cover a large portion of the cost, so our outlay was minimal. Third, our family hadn’t been to Florida in almost 10 years, and our two youngest had never been to Disney OR seen the ocean. We wanted my parents to be able to have those memories with the kids, especially since we were moving their only non-adult grandkids to a different continent.
Putting our money where our plans are
Even with a budget of $5000 per month, we knew we would have to watch our expenses carefully in Norway, especially if we wanted to splurge on family trips. And -duh – we were living in Europe, so of course we wanted family trips. Part of the reason we were moving was to create memories as a family.
Our first piece of luck came in the fact that we had planned for the possibility of Oslo prices (which are unbelieveably high). But we actually ended up going to Stavanger, where prices are currently cheaper. So our 16,000 NOK budget ($2000) for housing turned out to be only 14,000. YAY! Win. We could have chosen a bigger place, but the basement apartment where we live is clean and safe, with big windows and a ton of playgrounds in the neighbourhood.
The next piece of luck for us, is the fact that the exchange rate was actually a lot better than we planned for. We figured everything at 8 NoK per dollar just to be safe, but by the time we were over here for a few months, we were getting 9.5 NOK to the dollar. That means that everything we bought was about 15-20% cheaper than we had planned. Again, a little bit more room in the budget. Our rent went down to less than $1500 for every month we paid at that rate, saving us $500 from our budgeted amount.
But the big, huge, magnificent bit of luck was the fact that I actually found a part-time teaching job. In September, a local international school posted a job for a teacher of English language and literature. It seemed perfect for me because it was 70%. In other words, I would have 1 ½ days a week off and teach 3 ½ days each week. At Christmas, they asked me to work an extra half day, so I’m at 80%. My take-home pay turned out to be about 28,000 NOK a month, enough to cover our rent, food and a little extra.
What we didn’t account for
Less money for our stuff
There were several places where our planning missed things. First of all, we planned on earning enough from the sale of a lot of our furniture to pay for our plane tickets over, as well as the cost of a shipping container for the furniture we planned to take. Unfortunately, we were so busy just clearing things out, that we didn’t have time to list things online. We ended up giving away almost everything, except our car.
Again, our car didn’t bring what it was worth. I had planned to sell one car about a month before we left, and rely on one car for the last month. However, things were so hectic we really needed both cars until the very last minute. That meant that 48 hours before we flew out, we were sitting in a car dealership signing the papers to sell our car. I thought we could get at least 8K out of it if we sold it ourselves, but there just wasn’t time. We ended up getting less than 5K.
Cost of carrying the house
In my perfect dream scenario, we would have had our house on the market by the beginning of June. In reality, we had to hire someone to clear out the last of the furnishings AFTER we left. And we didn’t have time to do the little things that needed to be done to get it ready for the market. We ended up spending about $6K for those things. We also had to pay for ongoing care, such as lawn care, after we moved. We paid more than we normally would have because we found a local handyman who was awesome and we really trusted him. His prices were a bit above market, but the security of knowing that he would do an outstanding job and let us know if there were any little things that needed to be taken care of was 100% worth it.
Luckily, it was only about 3 months before our house sold, but that could have been a huge drain on our reserves if it had been on the market longer. (FYI – the money we made from the sale of our house is not included in our living expenses. That is set aside for when we decide to purchase another house. All of the living expense calculations assume that we will NOT use that money for day to day expenses.)
Other ‘at home’ expenses.
The little things we forgot that we would still have to pay for from the US. Life insurance, a cell phone plan so we could call our families, a few online subscriptions and donations (Doctors without Borders and such). It adds up to about $400 a month, which is manageable for us, but could put us in trouble if we hadn’t put so much leeway in our budget.
The big picture
Overall, we feel really good about the state of our finances heading into the 2nd year. I am not a detail-oriented person, so I don’t do a huge by-the-penny budget. But I would estimate that my job covers about 75% of our living expenses.
We are still frugal. For the first 4-5 months, we didn’t eat out at all. We’ve loosened up a bit and splurge a couple of times a month on take-out Chinese food. We eat less meat, and our entertainment is walking to the beach.
We also don’t have a car. I use public transportation to get to work, and my husband bikes to the university. It does make life a lot harder at times, but when we ran the numbers, we just didn’t feel like it was a good idea. Consequently, transportation costs run under $150/month instead of probably $1500/month if we had a car.
There is one other big, BIG thing we did to save money. We sold our house in the US. This was a heartbreak for my husband, who literally saved it from eventual decay. We had to make some sacrifices, and that was one of them. As we mentioned above, it was pretty expensive to keep it up, and even if we could have rented it, we would have had the worry of making sure things were in running order. That’s much harder from another continent.
I never thought that I was financially independent – even temporarily – until a co-worker (also interested in FIRE) commented “Wow! You’re really doing it. Financial Independence, retire early. Moving to Norway. Congrats.”
I paused for a minute, stunned, and then realized, “Yeah. We are.” Maybe not forever, but for at least a couple of years. And we are doing it in one of the most expensive places in the world.
So if you are wondering if it could work for you, I think in most cases the answer is yes. We earned good salaries, but not huge ones. We were out of debt and lived below our means. But most importantly, we chose to believe that it could be done, and spent our time working toward making it happen instead of thinking it never would. I believe that if you are out of debt and have a healthy savings, it can be well within reach if you are willing to do the research and then plan and save accordingly.
Remember, you’ve got this.