PFH Episode 16 – Traveling with Baker of Man vs. Debt
Recaps for the Personal Finance Hour are provided weekly by: Brian of Building Wealth Together
This week on the Personal Finance Hour, Jim and JD were joined by Baker from Man Vs. Debt. Baker has been a frequent caller and fan of the show since its inception. After the journey he has been through the past year several listeners have been anxious to hear an update on his travels through Australia and New Zealand.
Baker and His Family Pre-Trip
About eighteen months ago Baker was on a typical path. His wife had just finished her teaching degree. They had just become pregnant and Baker’s small business was starting to grow. Baker and his wife both knew that if they didn’t make any changes in the near future, they were going to end up staying in Indiana and never leave.
When they decided to embark on their adventure, their first priority was to pay off their consumer debt (about $20,000 including their vehicles). Throughout the next year they were able to save up about $15,000 in preparation. Baker said that he and his family were able to live off of about 25-33% of their annual income.
Going Overseas
Baker stated the most popular way to travel overseas is to have a working holiday visa. This allows you to work for up to a year (two different six month stints) and then look for a different type of visa if necessary. Unfortunately for Baker and his family, you can’t have a dependent to utilize this type of visa. He looked into a permanent visa prior to leaving the US, but this took a significant amount of time and their departure date was already planned and they had started to sell off their belongings.
When his family did finally leave, they ended up going on a visitor’s visa with hopes of trying to get a sponsorship visa while abroad. Baker, without a college degree, says it’s very difficult to get a sponsor. His wife, as a teacher, would have a better chance, but specifically in Australia she would struggle because the demand isn’t high for foreign teachers. Their visitor’s visa for Australia only lasted for three months.
Because of the challenges put forth by finding work and the limited financial resources they brought with them, Baker and his family decided to leave Australia and move to New Zealand.
JD chimed in by saying, to him, this seemed like a harrowing experience. He felt it was a huge leap of faith that Baker took and he doesn’t know if he would be able to take such a risk. Baker responded by saying at times it feels great to have the freedom to just hop to another country, but at other times its not as great. It took so much sacrifice for this journey to come to fruition for their family, they weren’t going to let hiccups along the way impact their experience in a negative way. Baker did add that their biggest concern was Milligan (Baker and Mrs. Baker’s daughter). He said she was fine on all of the flights and didn’t get sick right away when adjusting to the new environment. He feels that she unequivocally held up to her end of the bargain.
Culture Shock
Whenever moving to a new country there is an expected degree of culture shock. JD asked Baker about the cultural differences he has noticed so far on his trip. Baker said that Australia wasn’t much different than the US except that everyone had a funny accent (my apologies to the Aussie readers). New Zealand was very green and organic. Baker described the country as being full of “hippies”. The discussion of American’s attitudes about gun control seemed to come up often and Baker had some interesting comments about how the issue is viewed about in New Zealand versus the States.
The recession, or what is known as the “Global Financial Crisis” in Australia has hardly been discussed in New Zealand. The recession doesn’t seem to be affecting everyone’s lives in that country. According to Baker, New Zealand has a bit of an isolationist attitude and prides itself on being a bit removed from the rest of the global community. However, wherever he was, Baker was unable to escape the news of Michael Jackson’s passing.
Where is all of their Stuff
Prior to their trip, Baker and his family sold almost all of their possessions. He said the initial burst of selling their stuff was very tough. However, once they started going it became a game to see how much they could sell or how little they could live off of. A lot of their items were sold via Craigslist and eBay. He did say it was a real challenge to get rid of some items they had sentimental attachments to, especially wedding gifts from just a few years ago. It took about six months for them to sell all of their possessions. Baker said it was a very liberating experience to be without all of those items. He also let it be known that the last thing he wants right now is a house filled with a bunch of stuff.
Baker’s family had cut down their possession to only things that would fit in a couple of large backpacks and a few extra items for Milligan. They wanted to be as mobile as possible, however in retrospect he would like to have cut out about 25% of what they brought. He advises that if you want to see how mobile you can be for a trip such as this, carry the items you are bringing on your back for a half an hour or longer to see if you can handle it.
The whole process took about a year of planning. Baker had purchased the plane tickets for the trip about 10 months in advance.
CouchSurfing
Baker praised the website/service CouchSurfing.com throughout the show. CouchSurfing has given him and his family an opportunity to meet interesting locals and provided them with relatively cheap, or in some cases free, housing.
Cost of Living
Along the way, Baker found that the cost of living in Australia and New Zealand is actually an increase over where he used to live in Indiana. However, compared to other cities such as Portland or DC, there may be a cost of living decrease. One thing that was about at 20-25% increase was the cost of food. This was made apparent early on in Baker’s trip.
Dealing with Logistics While Away
Neal called into the show to ask Baker how he was handling his taxes and any correspondence he may receive from the IRS. Baker said his mail is currently forwarded to his mother and that he is also just sort of hoping that nothing comes up with the IRS.
Baker also mentioned an interesting service if you plan on being abroad for an extended period. There are companies that will open your mail for you, scan it and e-mail forward it to you in a PDF format.
It is also smart to check with your financial institution to make sure that they do international wire transfers. Baker found out that ING Direct doesn’t do these kinds of transfers, making it a challenge for him and his family to access their money.
The episode concluded with Baker telling a bit of a horror story about his lack of having a current driver’s license, his wife having lost her license on a plane and his wife having a passport with her maiden name on it. Because of this comedy of errors, they have been unable to drive since they embarked on their trip, and Mrs. Baker has been unable to have her name on any of the financial accounts that they have opened. However, looking back Baker says this is a funny story and just another challenge that they have already overcome.
Please tune in next week for another edition of the Personal Finance Hour.
