[ experience of returning to Opens in new window ]
When weighing up a move home, people naturally consider the costs and the financial implications of returning to Ireland. I’ve just reviewed the numbers from our first year back. Moving is not cheap. But you know the old saying “Price is what you pay and value is what you get”. The value part is up to you.
I know of a couple who burned through their savings, returned to Sydney and are now preparing for their second attempt. Just like Everest. And that's probably a good way to think about it. Moving from one country to another can make or – literally – break you. But what does any explorer worth their salt do if they decide to climb their Everest? They prepare.
The cost of moving overseas can be divided into three categories, mirroring the stages that you go through. They are relocation, establishment and settlement.
First, the cost of relocating yourself, your family and belongings. When I moved to Australia as one half of a couple, that cost was about €1,000. When I returned, it was about €21,000, which included flights for five and a 40ft shipping container for all our stuff, including our car. That was after we forced ourselves to down-size to a two-bedroom apartment for six months.
That’s what a family will do to your bank account – big price, great value.
I've been writing mainly about the experience and feelings, having returned home after 16 years. This article was originally intended to be unemotional and objective look at the financials. Then I saw what we spent in the first year. And emotion came into it.
Excluding the above-mentioned relocation costs, and buying property, what follows is a quick guide on how to burn €50,000 in one year, with help from your children.
The second phase is establishment. We had decided not to compromise on whatever it took to make the transition as smooth as possible. We spent almost €9,000 furnishing our new home, buying weather-proof clothes, repatriating our car, and additional gifts, over and above what we normally would have bought. Again, big price – but the value was that everyone settled well and could complain less about the weather.
So far, the overall once-off moving cost – that won’t be repeated next year – is about €30,000.
Finally, we have settlement. Forget reverse culture shock. This is straight-up bill shock. I’ve divided these recurring costs by the degree of negotiability that you would typically have in deciding whether to spend in those areas. I’ve also added some ‘highlights’. I use that term loosely to describe those items that surprised me most.
CATEGORY 1 - HARD TO AVOID (€32,000)
Those recurring items we usually need to feel secure, comprising of the following:
Groceries €14,000: Now that Anne-Marie and the children are at home more, we eat a lot, and well – maybe this means our medical bills are less. We spent €480 on Nespresso – a bit much (or maybe not).
Finances €6,000: (Health insurance, life assurance, critical illness cover, essential bill cover, bank fees, home and contents insurance). We probably conservatively chose the high end of this cover and will be reviewing it again shortly. It's also the type of thing that you don't consider as an employer might cover a lot of it, but it comes into play once you set up a business yourself.
Utilities €3,000: (Electricity, internet, TV and two mobiles and bins which were €500!)
Kids €4,000: (Schools, GAA, clothes and books). On the plus side you collect €140 per month in Child Benefit, giving us back €5,000 per year for three kids. Thanks Ireland!
Disclaimer: This does not mean having kids is profitable.
Transport €5,000: (Includes car insurance, car tax, NCT, petrol, parking/tolls and bike for work). I'm glad we have only one car and I cycle to work. I cannot imagine owning two cars, unless you absolutely needed them, although that seems to be the default for most families – a significant decision financially and environmentally.
CATEGORY 2 - THINK ABOUT IT! (€13,000)
This category consists of the recurring stuff we could sometimes do without, but would prefer not to – also known as the cost of loving.
Social: We could certainly save here but we wanted to enjoy ourselves and our relationships. Total €10,000, included gifts €4,500, two holidays €3,500 and going out €2,000. We found some of the customary gift-giving around certain occasions, particularly where kids are concerned, quite material. This is something we want to keep an eye on.
Lucky luxuries: We are fortunate to choose to do certain things right now that could be considered luxuries. Total €3,000, includes gym €2,000, a wedding €500, treats and charity €500.
CATEGORY 3 - FIGURE IT OUT! (€5,000)
Finally, we withdrew about €5,000 from ATMs, averaging about €100 per week. My assumption is that it is probably mostly social and various everyday expenses such as groceries. That, or someone has a habit they’re hiding well.
So there you go. Almost €50,000 in one year. There is scope to save money now that we move into a more settled second year.
After I picked myself up off the floor, I asked myself a few questions.
1. What did we miss? We did a pretty reasonable budget before returning but still forgot or completely underestimated our spending on some basic things like life assurance, bins, clothes, cosmetics, books and gifts.
2. How did the move impact spending? Once you have decided to move, a price comparison with Sydney is perhaps interesting but not relevant. What matters is what you earn and spend in Ireland, so I focussed on that.
I would say there are three big changes in our life here in Ireland that have impacted our finances in a way that we didn’t fully anticipate – and you should not underestimate: We consciously decided that in the first year we would invest money in just being happy. So we spent more on clothes and experiences than we normally would. I don’t consider it wasted – but that depends on your personal circumstances.
You naturally completely fall out of normal routines from your previous home town. This costs money. Sporadic shopping, eating out, buying stuff you don’t need while you figure things out - all this costs a lot. Routines save money.
Finally, the bank account and budget set-up itself – the system we had in place to manage our money - changed. Years back, when saving for a house, we consolidated into one account and bought everything using cards. This transparency meant we knew exactly what we spent. We were very strict on ourselves with an ‘allowance’ each week. Observing what you spend changes your behaviour.
3. What can change? Now that we know what we spent, we can (a) make better choices about where we will save – it is time to reconsider some things we put in place to settle; (b) we can still be kind to ourselves without a significant number of items above; (c) it’s time to move from our tactical financial accounts set up to a long-term consolidated simple one – with more leeway around the allowance, of course.
4. Do we regret it? We don’t regret spending what we did, but perhaps we could have managed it better. I don’t think many people establish a budget and monitor spending. When overseas, we focussed on our cash flow only up to the arrival, to ensure we could afford our home and the move with something left over while I found work. Two things prevented us from keeping to our budget once we arrived. Firstly, we focussed on the experience and value of returning over the price of it (because we had planned well, I think we let go a little). Secondly, our Irish budget was insufficient to start with – we had struggled to get accurate information until we actually arrived.
I hope this article helps you get your budget together if you are thinking about making a similar move.
