A Conversation with an American Expat About the Costs of Living Abroad

Cait, an American citizen, went to college in Canada, and is currently pursuing post-grad and employment in the U.K. We recently chatted about some of the monetary implications of living abroad and what she had to do to get a work visa.

Mike: Hi Cait! Let’s get you introduced.

Cait: Hello! I’m a 29-year-old American expat, living, working and studying in England for almost six years now. I originally moved here to do my master’s degree, but got a job afterwards and have managed to stay here and stay employed ever since.

Mike: What made you decide to move to England?

Cait: I had studied abroad in Paris and really fell in love with Europe, so I decided to do my masters in European Studies which seemed like a great idea at the time. I really didn’t think I’d get into the program, and when I did I was like, “Welp, I can’t really pass this up.” I did my undergrad in Canada as well so I hadn’t actually lived in the U.S. for four or so years before coming here, either. I guess I kind of like being a foreigner.

Mike: Are you one of those Americans who learned that you could get a cheaper education in Canada, or did you just discover programs and schools you liked up north?

Cait: I did! I actually did my first year of undergrad at a small liberal arts college, but the summer after my first year I did a French program in Quebec City and started to think about transferring to McGill. Which was lucky, because my parents couldn’t afford the American college anymore anyway.

Mike: What kind of savings did you see when you transferred?

Cait: Well, I think when I started (2002), tuition and room and board at the first school I went to was $40,000, and with loans and some financial aid, I think my parents were paying something like $16,0000 or $18,000 a year. The international tuition in Canada was $12,000-ish Canadian at the time, though I seem to remember I got about a $3,000 grant as well. (It always drove me a bit crazy when Quebecois students were striking over cuts to bursaries when their tuition was about $1,200 a year). I still worked a part-time job or three, so I paid most of my own bills and all my food and fun costs while I was studying. Montreal is such a cheap city to live in though. My rent was no more than $350 a month. Oh, those were the days.

Mike: Did you take time off between your undergrad and master’s programs?

Cait: No, I didn’t, despite advice from one of my professors who I really liked. I knew I definitely wanted to go to grad school, and I couldn’t imagine what else I would do. In hindsight, a year off would have been a good idea—not least for the fact that I started my masters in 2007 when the dollar was 2:1 with the pound, which meant I had to take out enormous student loans in U.S. dollars. Then the financial crisis happened and I’m now paying my loans back with pounds, and the exchange rate is roughly 1.50:1. I try not to think about how much money I’ve lost in the exchange rate alone, because it’s pretty depressing.

Mike: How much student loan debt do you have?

Cait: About $57,000, $20,000 of which is from undergrad. I had to borrow $40,000 for my masters to get £20,000, which is now £26,000 worth of debt because of the exchange rate. I guess ultimately my situation isn’t nearly as bad as lots of other people, but when I tell my British friends how much student loan debt I have, they’re completely dumbfounded because until recently, tuition was capped at £3,000 a year. My boyfriend, who is a few years older than me, actually went to uni for FREE and was given a STIPEND. It’s just unreal.

Mike: You chose to do a program in the U.K.—was this the only one you applied to, or were there more affordable options?

Cait: I applied to one other, but also in the U.K. For what I thought I wanted to study, it just seemed to make sense to come here. I wasn’t really thinking very much about affordability, clearly. I tend to get fairly fixated when I want to do something, and I find a way to do it even if it’s probably not the wisest decision. I actually don’t even know how much the other program cost. I was just so surprised that I got into this one that it seemed like I had to do it.

Mike: Did you have post-grad careers in mind before you started your master’s program?

Cait: Not really. I’m actually kind of ashamed that my thinking at the time was, “Oh, well if I get a master’s degree I will make more money and the debt will be worth it!” I knew I probably eventually wanted to go on and do a Ph.D. but didn’t give a huge amount of thought to jobs immediately after my master’s degree. (I’ve since started the Ph.D. at the beginning of this year)

I sometimes get angry with past-me and wish I had actually looked at what jobs might interest me and what kind of starting salaries I might expect because obviously “good Masters degree = good job!” was naive, but the economy was in such a mess at that point anyway so things would probably have been tough for me regardless.

Mike: When you completed the program, how did you figure out what you were going to do next? And whether or not you were going to stay or go back to the U.S.?

Cait: I had decided while I was doing my masters that I definitely wanted to stay in London. I just really loved it. I still wasn’t totally sure what I wanted to do for work, so I applied for tons and tons of jobs in public affairs because that’s what it seemed like other people were doing, but then eventually (actually not even eventually, I got the job offer the day I handed in my master’s dissertation) I got a sort of admin-y job at a think tank which was an amazing first start. A lot of people I knew were doing unpaid internships to get into think tank-type work, and I got to do mainly the same kind of work (plus some particularly mind-numbing admin stuff) that interns were doing, but actually get paid for it. I got really lucky.

I’m not actually sure when I decided not to come back to the U.S., but I think the longer I lived outside of the country, the less I wanted to go back. Plus, if you live in England you can go for a weekend trip to France or Spain or Italy for SO CHEAP and I knew that if I went back to the U.S., I might very likely get trapped there. Trapped probably isn’t the right word, but I just knew that if ever I wanted to live and work in the U.K., it had to be then while I could get a work visa. I have American friends who went back to the U.S. after our master’s and want to come back to the U.K. now, but they can’t.

Mike: When you got that job at the think tank, how did you work out the visa?

Cait: Well, there used to be a route called the “Post Study Work Visa,” which any international students could get after completing their degree and wasn’t dependent on having a job offer or anything. This was great because none of the kind of places I wanted to work for would have gone through the trouble to sponsor me for a visa had that been the only option because I was not that special a candidate.

Mike: That route was available to you?

Cait: Yeah, the government has closed it now because they’re trying to limit immigration (and they can’t do anything about EU migrants coming here so they’re limiting any category they can get their hands on). Basically, if you had just finished a U.K. degree and had £800 sitting in a bank account (presumably so they could chuck you out of the country easily if they denied your visa), you could get this work visa for two years and work anywhere (or not work at all). I think it cost about £800.

And after those two years, I was eligible to apply for a “Highly Skilled Migrant” Visa, through racking up enough “points” from my income and education.

Mike: Can you explain the points system?

Cait: To be eligible for the visa, you have to score a total of 80 points on your application, which you get from your age, education, previous earnings, and U.K. experience. So for instance, I had a master’s (35 points), had lived in the U.K. already (5 points), was 28 years old (20 points) so I needed to earn over £35,000 to get the remaining 20 points to be eligible.

Mike: So you had enough points and applied?

Cait: Ha, sort of. When I was first getting this visa, the income required to get enough points was about £20,000 so I was eligible. But then literally just as I was about to submit my application, they changed the rules so it was a minimum of £30,000. And my salary was £27,900 at that point. Luckily though, I also do some freelance transcription work and I had several months until my previous visa expired, so I was like, “Well, guess I’ll just do a bit more extra work.” And then they changed the minimum salary to £35,000, and I nearly had panic attacks for a few months because I was convinced I was going to get deported, but a miracle happened and I got a huge freelance job and somehow managed to make £36,000 that year.

Mike: How much does it cost for the migrant visa?

Cait: I think the post-study work visa (which I got in 2008) was around £600. The Highly Skilled Migrant Visa (the points based system one) was £800 when I got it in 2010. And I just renewed it at the beginning of this year, and it’s now a mind-boggling £1,500. But at least this time it was for three years instead of just two, so I have a little bit more time before I start having nightmares about how I’m going to afford it (and make enough money for the minimum income requirement) again.

Mike: After you finished your grad program, did you calculate how much you needed to to live and get by in England?

Cait: I have a pretty ridiculous budget spreadsheet, complete with exchange rate calculations. It was tough at that point though, because the exchange was changing so frequently that it affected my monthly student loan payments by up to £20-£30 per month. There was a point that people thought the pound might sink to be on par with the dollar, and I remember thinking, “If that happens, there’s no way I’ll be able to afford my loan payments.”

Mike: How much are you earning now?

Cait: That’s actually a tough question. I was working full-time on a salary of £29,100, but decreased my hours to four days a week when I started studying for a Ph.D. part-time in January, and have now gone down to three days a week. I’m making up the shortfall in income by doing some extra freelance work. Ideally I wouldn’t be working full-time while doing my Ph.D. but I think I’m going to mostly have to. Luckily I have a very nice landlord (my boyfriend) who is understanding if I have to pay my rent a little bit late some months.

Mike: After you finished your master’s program, what was your incentive to go on and do a Ph.D.?

Cait: It seemed like a natural progression. I’ve been working in research jobs since my masters and have really loved it. The Ph.D. is something I’ve always thought I would eventually do and it was just a matter of when and where. Also, I want to make people call me “doctor.”

I think I was getting a bit bored with the type of research I was doing in the think tank and non-profit that I used to work for so yeah, I guess it did seem like a natural progression career-wise. And I wanted the challenge and to accomplish it for myself, even though I know the job market for Ph.D.s is pretty bad. But I’m already working as a research assistant for a university and have pretty good connections, so I’m telling myself that everything will be fine once I finally do finish.

Mike: So the goal is to continue to work in academia and hopefully be able to stay in the U.K. to do it?

Cait: Yeah, that’s the plan now. I do love it here, and feel fairly settled. Plus my Ph.D. research is somehow ending up to be fairly U.K.-centric, so I might actually be making it impossible to go back to the U.S. I’ve been told U.K Ph.D.s aren’t as highly valued in the U.S. anyway because you just write your thesis and don’t have the extra two years of classes/exams etc. Which is just as well for me, because all I want to do is the research anyway.

Mike: What are your living expenses like in the U.K.?

Cait: Now that I’ve moved in with my boyfriend and deferred most of my student loans because I’m studying again, I aim to spend about £1,900 a month. This includes my Ph.D. tuition which is £5,900 for the year, as well as paying off a credit card. I’m only paying my boyfriend £300 a month for rent (he owns our house) because that’s all I can spare after everything else.

It turned out that as an American student in the U.K. who did undergrad outside of the U.S., I’m not really eligible for any funding opportunities for my Ph.D. Studying part-time and paying the £5,900 fees, I have more disposable income than I would if I were studying part time with full funding. But working two-ish jobs and doing a Ph.D. is… a lot. I know I don’t make life easy for myself. I did get into two Ph.D. programs in the U.S., one of which did come with funding. But after agonising for awhile I realized that staying here was what really made sense for my research interests.

Mike: And you want to live in the U.K. so that’s the tradeoff you’re making.

Cait: Yeah, exactly. Sometimes when I get down about how much my master’s cost me, or how much money I lost in the exchange rate, I remind myself that I couldn’t be living here now if I hadn’t gotten my master’s degree. I couldn’t have predicted the financial crisis which ended up devaluing the pound, or predicted that the Government that’s currently in place would hate immigrants and try to dissuade us from staying here by making the visa process so expensive and difficult.

I do get 35 days of annual leave each year so life isn’t SO bad.

Mike: Do you feel like less of an American now that you’ve spent so many years there? Or are you still calculating everything in what that would mean in American dollars when you go out?

Cait: Oh, I absolutely feel less American. Every time I go back to the States I feel more and more foreign, and my family and friends make fun of how my accent has changed—it’s a bit schizophrenic, but people tend to assume I’m Canadian, which to be honest, I (not so) secretly love. American dollars are virtually meaningless to me, I have to convert them to pounds. I think I stopped converting things to dollars when I started working here. It’s always weird now when I’m in the U.S. and I have to think carefully about how much each coin is worth, which is a bit ridiculous.

Mike: Are you considering becoming a British citizen?

Cait: I’m not sure. When my current visa expires in three years, I’m finally eligible for permanent residency, so I’ll definitely get that. I’m not sure becoming a citizen is worth the cost though. The only benefit would be a shorter passport line. Well, that and being able to vote which as someone who studies politics might be nice.

Mike: Do you think about things like saving, and what that would mean in terms of living in the U.K.? Contributing to pensions, for example.

Cait: Ha, well I do think about savings, but I can’t do anything about it. If I have any extra money, it has to go towards short-term savings goals (friends’ weddings, visa renewal, tax bills). I had a pension at my last job which my employer contributed to, but I didn’t add anything myself. It is a little embarrassing that I don’t have any savings as a 29-year old-woman, but it is what it is. I suppose the good news is that I love working and I can’t imagine ever wanting to retire.

Mike: Do you know other Americans where you live and do you talk about money with them?

Cait: I do, but a lot of them have Rich People jobs so they live in a different universe. It’s funny, because you asked if I wanted to change my name for this post and I thought, “There’s really no point. Everyone I know knows all this stuff about me anyway.”

Mike: How about the natives? Is money something you discuss with them?

Cait: Probably more than most people. I’m pretty open about it, but it’s hard not to when people are curious about my visa etc. It’s actually a bit awkward sometimes, because I can’t really tell people about the visa that I’m on without revealing to them how much money I make (or scrap together to make, really). I could be really sketchy about it or I could be honest and say, “Well I have to make £35,000 in order to qualify. I don’t make that much, so I have to do X amount of freelance work in addition to my full time job.” My boyfriend and I are luckily really open about the whole money situation—the whole Brian and Lisa series was actually really helpful because I moved in with him just this January.

Mike: What was your living situation like before you moved in together?

Cait: I lived alone in a studio flat in London for three years where my rent was £640 a month, a really great deal for London. But then I met my boyfriend who lives in the city where I was going to start my Ph.D., and things were going well… Our options were either that I stayed in London and we didn’t see each other that much, or I moved in with him and paid him what I could afford in rent.

Mike: What’s been the starkest difference between living in the U.K. vs. the U.S.?

Cait: Hmm, that’s a really tough one. I guess the main thing is the amount of public transportation in even small villages. I’ll never need to drive, which is great because I’m a terrible driver and the thought of driving on the other side of the road is terrifying. And just the history everywhere, how all the buildings are hundreds of years old, or the pub down the road has been there since the 1400s. It boggles my mind sometimes. The people are wonderfully self-deprecating and there are probably fewer Idiots than in the U.S. (or at least they’re a different kind of idiot that I find amusing rather than infuriating and embarrassing).

Mike: Do you have a vision of the life you want to live over the long-term? It’s a broad, question I know. But do you envision kids in a tiny cottage somewhere in the country or anything like that?

Cait: It’s something I’ve been thinking and talking a lot about since I moved in with my boyfriend. We definitely want to get married, but don’t want kids, because we’d much rather spend our time doing fun stuff all the time. So I think we’ll probably stay living in a city, but whether we stay here or move to another city may depend on my job situation post-Ph.D. As long as we travel a lot, go to movies and art exhibitions and weird stuff all the time, I think that will be pretty great. There is part of me that would like to spend a year in Hong Kong or South America or something, but I’m not sure that’s realistically going to happen at this point. But again, at least with no kids, there’s still the chance.

 

See more conversations from our “Doing Money” series.

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19 Comments / Post A Comment

Ahh I just decided last week I want to move to Europe (probably Ireland or France) in the next 5 years. This makes it seem less likely, though, with the work visa limitations, etc.

Interesting read!

cmcm (#267)

@backstagebethy Worth checking out the rules in other countries! (Though I suspect they’re not much easier) Whilst there’s free movement for EU citizens within the EU, the immigration/visa rules for other foreigners varies country to country.

LookUponMyWorks (#2,616)

I love this series! Thank you for sharing, Cait.

I feel like I was you just a year or two ago, living in the UK and wanting desperately to stay, but encountering a government that hates immigrants and desperately wants immigrants – even skilled workers – to leave. Post dissertation, I just didn’t have the money on hand to get through the visa process for a post-study visa.

LeslieLive (#4,796)

@LookUponMyWorks I loved this too! I am currently in the UK, but cannot apply to stay after my 2 years is up. It is hard loving a place so much and knowing that people want you to leave so much.

I’m curious what type of freelance work you take on? (mostly because I’m nosy, so feel free to ignore me)

Also, 35 days of annual leave. So, so jealous. Is there a minimum number of days you have to stay in the UK per year to keep up your visa? I’m thinking like to avoid NYC residency and its taxes – you have to prove you were out of the city 50+1% of the days of the year, I think. Does that make traveling home difficult (do you travel home often?)?

cmcm (#267)

@polka dots vs stripes Hi, I’m cait! Re: freelance work, I do audio transcription, mostly stuff for university research projects and it’s accidentally multiplied so now I sort of run a lil business.

Residency- there is some requirement, I think it’s something like 300 days a year staying in the UK? I actually have no idea, but I’ve never been out of the country for more than a few weeks each year.

astauff (#4,376)

I just got a spouse visa for the UK and the cost breakdown was insane. Things kept getting more expensive as we were making the application because they kept changing rules and raising fees. And the day after I got my visa they announced that they were looking into making people with my type of visa ineligible for free healthcare. The Conservative government in general and Theresa May in particular really are not fond of immigrants.

mlh (#905)

I’d be interested to know whether this person is filing taxes every year with the IRS. As we learned from the Eduardo Saverin case, the US still taxes US citizens’ earnings (at least in theory) even if they earned it abroad and live abroad. Also, how do you make your student loan payments from abroad? Are you hit with fees to change from pounds to dollars every time? It seems like that would add up.

Tuna Surprise (#118)

@mlh

you get an exemption for your first $90k earned abroad. So she may need to file a return but she probably wouldn’t owe US taxes. Obviously the Saverin thing is an issue because he makes well in excess of 90k.

kerrypolka (#3,331)

@mlh Yeah, we do have to file taxes even if we don’t actually have to pay any, and it’s a giant PITA and every American expat I know hates it.

cmcm (#267)

@mlh Re: paying student loans. I’ve got a UK Citibank account and a US Citibank account that allows me to transfer money immediately and free which I thought was the best thing ever.

BUT! I recently discovered http://www.transferwise.com which as I understand it (which I don’t actually understand) it works like Skype but for transferring money? It gives you a much better exchange rate than any bank does. I wish I had discovered it years ago, because it would have saved me like £10ish a month.

kerrypolka (#3,331)

@cmcm Oh yeah! I do my student loans through HiFX, who do a direct debit out of my bank account every month and transfer it to my US bank account at a set exchange rate ($1.50/£1). The set exchange rate is a little less than market rate, but it’s set for a year (for me, or however long you are willing to commit to a direct debit) and there are no fees.

RadScientist (#3,081)

US citizens living abroad still owe taxes, but the first $87,000 of income is exempt (at least when I was doing it, I think they’ve raised the exemption since), so she is well under the limit and owes no U.S. taxes. I thought this was great and interesting, and also made me very sad because the whole thing about how ” the current Government hates immigrants and try to dissuade us from staying here by making the visa process so expensive and difficult” is exactly the reason why I am now back in the U.S. instead of still living in beautiful Oxford.:( Because yes, there are so many unemployed UK citizens who were dying for that intestinal immunology postdoc. Oh, how I miss the 35 vacation days and quick and cheap weekend trips to France!

questingbeast (#2,409)

Does marriage make it easier to stay? I know tons of half American (or half Aussie) couples doing/finishing PhDs here, worrying about visas, but I never like to ask them (for fear of precipitating some sort of relationship crisis!).

Also, thumbs up to the not-driving! I’m fairly down on the UK, but the public transport (despite what people say) is pretty great. (And I live in rural Wales, so.)

kerrypolka (#3,331)

@questingbeast Marriage is by far the easiest (and cheapest) way to stay, although it’s still really quite hard, and they’re making it more difficult by introducing restrictive minimum income requirements for the British partner.

Here’s a fun article about it: http://www.bbc.co.uk/news/uk-22868332 – which has my all-time favourite quote on the issue, “If it wasn’t for the immigration rules I wouldn’t have had an abortion.” THANKS GOVERNMENT! HELPING PEOPLE MAKE GOOD DECISIONS THAT ARE RIGHT FOR THEIR LIVES.

LeslieLive (#4,796)

@kerrypolka There is some seriously ambiguous wording in one of the conditions on my UK visa that makes it sound like if I get pregnant, I have to leave before the kid is born or have an abortion.

kerrypolka (#3,331)

Haha oh god, this is literally what I did, from taking out giant US student loans when the dollar was US$2.00/£1, and now having to pay it back when it’s like $1.50/£1 and crying BITTER TEARS, to doing the Post-Study Work Visa and being around when the government was like “Ha ha, just kidding, you have to make LOTS MORE MONEY NOW if you want to stay and also you have three months to figure it out!”

The difference is that I wasn’t able to pull £15k of income out of nowhere in that time (I was on a £20k salary) and so my boyfriend and I decided to get married, which was (a) really amazing and great and is still really amazing and great, but also (b) massively emotionally stressful for both of us, and, ha! I have many stories about vomiting from anxiety during those five-six months, let me tell you!

I got permanent residency this spring, and I am also ambivalent about citizenship. This is mostly because, like you say, the only major benefit I can see is voting, and I’m in a pretty solid Labour ward (although I almost certainly will get it before the 2015 general election). And it costs almost £900, and, you know? There are better things I could be spending £900 on. LIKE STUDENT LOAN PAYMENTS *SOFT WEEPING*

Sometimes when I get down about how much my master’s cost me, or how much money I lost in the exchange rate, I remind myself that I couldn’t be living here now if I hadn’t gotten my master’s degree. I couldn’t have predicted the financial crisis which ended up devaluing the pound, or predicted that the Government that’s currently in place would hate immigrants and try to dissuade us from staying here by making the visa process so expensive and difficult.

Yeah.

keaton (#2,721)

Great post, thank you for the interview.

EU and visas … sigh. I’m sort of in the opposite position – I’m an EU citizen but my partner is not, so if I want to live there again it’s going to be a hell of a process. They sure don’t want an extra people right now.

astauff (#4,376)

@keaton You should look into that more closely because it is actually way easier to move there as the partner of an EU citizen than a UK citizen, for weird EU legal reasons.

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