"We moved abroad for fun. Now we can’t afford to leave"

Bradford and Lisa, a couple with three children, moved from Canada to Colombia six and a half years ago with the intention of staying for only a year. However, they now find themselves "stuck," unable to afford a move back to Canada due to their financial situation. Their net worth is $273,000, with assets of $120,000 and investments of $153,000, but only $1,500 in savings and $1,300 in debt. Their fixed costs are 68% of their income, investments are 14%, and guilt-free spending is 17%, with 0% allocated to savings. This lack of savings is identified as a major problem, limiting their options. Lisa, originally from Colombia but raised in Canada, initially saw the move as a "money hack" due to the lower cost of living in Colombia compared to North America. However, she now feels trapped. While Bradford, a teacher, found a good job he enjoys, Lisa struggles to find meaningful work that pays adequately by North American standards. She views job offers of around $1,200 a month in Colombia as insufficient, comparing it to Canada's minimum wage of $15 an hour, leading her to feel undervalued and that her time is wasted. This disparity in career satisfaction and earning potential is a key driver for her desire to return to Canada. She also feels trapped because Bradford is content to stay in Colombia indefinitely, while she is not. The discussion about moving back to Canada is intensifying, particularly for Lisa, due to her recent financial instability, with two significant contracts drying up. She feels a "desperation" to find something else, believing she would earn more even at minimum wage in Canada. Bradford, while happy in Colombia, acknowledges Lisa's unhappiness and the prospect of her feeling underpaid in her "best money-making years." Concerns about their aging parents in Canada also contribute to the debate. The couple discusses returning daily, with Lisa expressing a willingness to move back alone if necessary, a prospect that scares Bradford due to his reliance on her and the potential separation from their youngest child. Their communication regarding this major life decision is characterized by a "tug-of-war," with Lisa pushing to leave and Bradford wanting to stay. They previously attempted to plan their exit, agreeing on a two-year timeline to transition out of Colombia, but Bradford frequently expresses desires to stay longer, leading to Lisa's frustration and feelings of exhaustion. This back-and-forth highlights their differing approaches to planning and decision-making, with Lisa describing her thinking as "erratic" and often reactive, possibly influenced by her ADHD. A significant point of contention is their approach to debt and savings. They have a history of cycling in and out of debt, having paid off $120,000 in student loans in five years. Their current strategy involves investing any extra money and using low-interest lines of credit for unexpected expenses, which they then quickly pay off. They believe this is more financially sound than holding cash in a low-yield savings account. However, this approach leaves them with minimal savings, making them vulnerable to financial shocks and perpetuating the cycle of debt. Bradford, with his strong understanding of math and returns, sees investing as a priority, even at the expense of readily available savings. He considers his liquid investments in Colombia as a form of savings, despite the inherent risks associated with the local financial system. Their combined gross monthly income is approximately $10,000 ($120,000 annually), a figure neither of them accurately knew. Bradford's income is variable, and Lisa's recent contract losses add to the uncertainty. Lisa struggles to project her future income, highlighting her reactive approach to finances. She previously set an income target of $40,000 annually, which she exceeded, demonstrating her capability when given a clear goal. The conversation reveals deeper psychological patterns. Lisa's childhood in Colombia, marked by financial instability despite some affluence, instilled a belief that "money comes and goes," making long-term planning difficult. She worries about financial control and feels her self-worth is tied to her earning potential. Bradford, whose own financial awareness grew after realizing his grandparents funded many of his early opportunities, is determined not to repeat his father's pattern of working into his 70s without a secure retirement. He tends to shoulder the financial burden, often working multiple jobs, which Lisa acknowledges makes her feel "disempowered" and without purpose in contributing. The financial expert challenges their "muddled way of thinking," emphasizing the need for clear decisions and a shared vision. He points out that their current investment strategy, while aggressive, leaves them with insufficient savings for emergencies and puts them at risk of falling back into debt. He stresses that "efficiency" in earning, as Bradford prioritizes, is not always the best approach in a relationship, especially if it disempowers his partner. To address their situation, a plan is developed: 1. **Shared Vision:** They need a clear, shared vision for their financial future, including retirement and the option of moving back to Canada. 2. **Income Target:** Lisa commits to an income target of $3,000 a month, which she recently achieved. This increased income significantly improves their financial outlook, dropping fixed costs to 47%. 3. **Emergency Fund:** They agree to build an emergency fund of 6-12 months of fixed costs, starting with $1,000 a month until they reach approximately $21,000. They plan to kickstart this by selling some existing stocks. 4. **Redefined Roles:** Lisa will work on her self-worth and actively contribute to their finances, and Bradford will encourage her while refraining from "saving the day" by immediately taking on more work. 5. **Retirement Planning:** They aim for a retirement fund of $2 million, which requires doubling their current investment contributions. This is made possible by Lisa's increased income and the eventual completion of their emergency fund. 6. **No More Debt:** They commit to a "no debt" policy for luxuries, including furnishing and vacations, and will save for these expenses instead. The expert highlights that moving back to Canada now would be a reactive escape, not a solution, due to significant transaction costs and uncertainty about job prospects. He suggests that if they wish to return, they should realistically calculate the costs and income needed, and save diligently in a dedicated fund, allowing them to make a deliberate decision rather than an impulsive one. In their follow-up, Lisa expresses surprise at their actual net worth and the realization that Bradford's "saving" behavior, while appreciated, was inadvertently invalidating her contributions. She feels motivated to work harder and contribute. She also acknowledges the importance of an emergency fund and plans to sell some stocks to establish one. Bradford is surprised by the inadequacy of their retirement savings and recognizes that his focus on efficiency sometimes harmed their relationship dynamics. He commits to building a savings fund. Both express a willingness to change their long-standing patterns and work together towards their shared financial goals.