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Moving to Thailand? Leave some room in your budget
I often see Thailand mentioned as a top destination for people looking to settle in a place with a low cost of living and high quality of life. As a resident for over seven years in the Land of Smiles, I definitely think it fits the bill. But I also think you should leave some extra room in your budget should you decide to move here.
Why move to Thailand?
With its consistently hot weather, delectable food, and unique culture, Thailand’s hard to beat. And there are so many people from different walks of life who can benefit from a move to Thailand.
Firstly, it’s still a good choice if you’re a fledgling digital nomad looking to reduce your living costs while slowing building your fortune online.
It’s also a great place for those of you on the path to financial independence. You can use geoarbitrage to speed up your journey to FI by finding an opportunity to earn a high salary from back home, while reaping the benefits of low basic living costs.
Maybe you’ve unlocked early retirement and want to spend your newly-found freedom on an island sipping cocktails, while withdrawing the minimum amount from your investments.
Or perhaps like me, you’ll find a job in Thailand that can advance your career in your chosen field, for example in international development or journalism.
All of these things are possible, and over the years I’ve met a lot of people who fall into the different categories, and who happily call Thailand their home.
Cost of living in Thailand
How much does it cost to live in Thailand? A quick Google search will bring up a ton of articles showing the cost of living in Bangkok or Chiang Mai, which are the most popular destinations for expats.
All of these will generally show that the cost of living in Thailand is lower than most of us might be used to. It also varies from place to place.
Living in the capital will set us back a bit more. I argue that you shouldn’t expect to pay less than $1,000 USD / month to live in Bangkok.
In the remote northern town I lived before, I could easily get by on 12,000 THB / £280 / $400 a month, excluding visa and travel costs. All those digital nomads holed up in Chiang Mai might swear by around $600 a month.
But before you book a one-way ticket thinking that you’ll need a maximum of $1,000 to comfortably cover basic living costs each month, I want to emphasise the importance of keeping some room in the budget, and having an emergency fund.
There are a few additional costs and factors to keep in mind while managing your finances in Thailand.
Why you should leave some room in your budget
Although visa requirements differ from country to country, most visitors from Europe or Northern America can arrive with a 30-day tourist visa exemption. But beware that If you only have a one-way ticket to Thailand, the airline will ask if you have a Thai visa or outbound travel from Thailand within 30 days of arrival.
If you want to stay longer than thirty days, you’ll need to sort out a visa outside of Thailand. Most people who come to Thailand without a job lined up will usually arrive on a tourist visa arranged from a Thai consulate.
In the Thai consulate in London for example, you can pick up a 6-month multiple-entry tourist visa for £125. You’ll have to show relevant documents, including a bank statement showing you have enough money to cover your stay.
For the first three years I managed on a combination of tourist visas and one-year volunteer visas. In the past four years, I’ve been completely legit – with a business visa and work permit.
Despite visas sounding simple enough on paper, visa rules can actually be a massive pain the bum. Depending on the type of visa, you will either need to leave the country every 90 days, or do a “90-day report” in person or by post. If you have a year-long business visa like me, you’ll need to pay for a multiple re-entry permit (3,800 THB / £88) just to have the freedom to leave the country when you want.
Visa rules also keep changing, and the government are tightening up on folks who arrive on visa exemptions and just try to cross the border every month.
So in sum, do your research and budget properly. Get a proper visa (at least to start), and make sure you know when you need to leave the country. Keep in mind the cost of getting visas and those border runs. These things add up, and will definitely add to your budget.
Thailand has a fairly good state healthcare system, and has moved towards universal healthcare coverage for its citizens.
You’ll find top notch private hospitals in Bangkok and other cities with larger numbers of expats. It’s a hub for medical tourism; people come from neighboring countries and beyond to make use of its hospitals.
While a trip to the doctors for a quick check-up and some meds will be cheap, it is worth looking into proper health insurance in case of emergencies. Thailand does have the second highest rate of road deaths in the world after all.
If you’re planning to be here short-term, then a good travel insurance package will probably suit your needs. But longer-term residents should definitely look into a health insurance scheme that will cover outpatient, inpatient, and emergency costs. I’m covered by group insurance at work, which comes to about 14,000 THB (£325) a year.
Even then, insurance will only cover costs up to a certain limit, so those who might need serious operations may have to pay a significant sum out-of-pocket. The cost of health insurance and out-of-pocket expenses may look paltry to American chums, but Brits who’ve grown up with free healthcare may overlook this one.
Exchange rate fluctuations
USD to THB currency rates over the past 10 years
We expect our pounds or dollars to go further in Thailand. But what happens when our home currencies start to tank? This is exactly what has happened in the last couple of years since the UK voted for Brexit. The GBP to THB exchange rate is at the lowest it has been for 10 years.
Retirees moving to Thailand from the UK three years ago will have got more from their money than they are now. On the flip-side, people like me earning in Thai Baht will have more money when they move back home.
So if you have a pot of money set aside for living in Thailand for a few years or longer, bear in mind the currency fluctuations that will impact the value of your pot of funds. You might find that those cheap cocktails are no longer as cheap as they were.
Trips back home and elsewhere
As awesome as Thailand is, you will probably miss home. Family, friends, familiar food, cold weather – all of these things may eventually make you take a trip home. So keep some room in your budget for a home visit.
Moreover, Thailand can be a really transient place – you’ll make friends, and then they leave. While this can be sad/frustrating, the upside is that you’ll probably end up with friends all over the world to visit. So make sure you budget for escapes further afield.
If you fall in love with Thailand and have children, or are thinking about having children, then keep education costs in mind. Most expats send their kids to international schools because of the higher quality of education and internationally recognized certifications.
This comes with a high price tag. Primary school tuition fees average 320,000 THB (£7,440) per year, per child!
Managing your savings/investments
This point is not really related to budgeting, but is important for those who are still building up their savings and investments.
Once you move out of your home country, you might lose your ability to contribute to your usual tax-efficient savings and investment vehicles. For example, after realising I no longer qualified as a UK resident, I couldn’t contribute to my ISA, and could only contribute to my pension fund for a maximum of five years after moving out the UK.
Of course there are investment alternatives for expats, but if you’re not sure how long you’ll be living abroad, it can be hard to commit to a medium to long-term investment. For silly people like me who are unable to figure out where they want to be next year, I couldn’t commit to putting money away for five years in an unfamiliar fund. But if you are keen to invest while living in Thailand, my fellow blogger at FIRE in Thailand has good advice.