Does balancing finances abroad sound scary to you? Probably. Is it really that big of a deal? With the right preparation, it doesn’t have to be. We summarized everything you need to know about how to handle finances when living abroad and what’s the best way to do it. Move to another country without a single worry with our guide.
How do you manage money internationally? It can get pretty overwhelming and complicated in your home country, let alone in two parallel countries that probably have nothing in common. Banking systems are different, the currency as well, and let’s not forget about the taxes. The bureaucracy can be just unbearable, but there’s a way to survive all of this. Read on to learn how to handle your finances when moving across the world.
Balancing Finances Abroad Is All About Research and Planning Ahead
Once you decide you’re moving internationally, there will be a ton of research waiting for you. Moving overseas isn’t just about going through a culture shock and finding some expat communities. If you wish to live somewhere, you’ll have to find a job, learn what taxes you should pay, what their bills look like, and how much all of that costs. Before you start acquiring all of the necessary documents needed to travel abroad, you’ll have to plan way ahead to see if your trip is actually doable. Learning how to document finances when living abroad isn’t exactly easy, but it’s also not quantum physics, so you’ll get a hang of it without a doubt.
Make Sure You Know All the Money-Related Info Before You Travel
Each country has its specific financial system, and relying on the fact that you know how to manage your finances in the US isn’t enough. Before you start living overseas, take some time to learn all the useful information about the foreign financial system. For example, it would be very beneficial to read about how expats get their money in the place you chose as the future destination. Knowing what the best way to pay for things abroad is will save you some money that you’ll certainly need, so be sure you’re informed about if it is cheaper to use credit card or cash abroad. It’s all a part of learning how to move overseas as well as how to live in another country.
Use Calculators to Compare the Expenses You Have Here With the Ones That Await
Unfortunately, the answer to How do I become an expat with no money is – by no means. If you wish to move to another part of the world, you’ll have to have a thick stash of cash under your belt. To know how much exactly you will need, compare the costs you have now with the ones you’ll have when you move. The internet is a good resource since you can find a lot of data online about the prices of rent, utilities, food, gas, and alike, but it would be best to have someone you can ask. Recognize your future expenses and put everything on paper. That way, you’ll avoid much of the moving stress, and the process of adjusting to the new country will seem much easier.
Here’s a Handy Tip – Leave Some Extra Cash for the First Two Months of Your Stay
You might do all of the calculations smartly and see that you need, for example, $1000 for each month to pay for everything from insurance to rent. However, what most people forget is the cost of social life. As soon as you arrive, you’ll start socializing and meeting new folks, especially if you’re moving to one of the friendliest countries in the world. That means going to bars, restaurants, clubs, and alike. All of that takes cash from your pocket that you didn’t count on, so be one step ahead and plan to spend more for the adjustment period.
Read Reviews and Take Advice on What the Best Bank Is
If you’re lucky enough that your bank has a branch in the place you’re moving to, you can skip this step. If not, you’ll have some more research to do. Get in touch with expat communities or locals and find out which local bank is the best one and open an account. It will make balancing your finances much easier, and you’ll skip all of the expensive fees that foreign banks charge for each withdrawal. When choosing a financial institution, pay attention to the following:
- Their currency exchange services,
- What types of accounts can you open,
- What fees will you pay,
- How much the foreign transaction fees are,
- How many ATMs there are in your city.
It’s Sometimes Obligatory to Open an Account at a Local Bank
Having an account at a good local bank is recommended, but it can also be necessary. For example, if you’re moving to France and plan on living in Europe as an American, you have to have a French account so that you can pay for your bills, metro pass, and even make online payments. US cards can sometimes get declined in other countries since the issuer isn’t located in the country you’re making the payment in, and it can cause an error in the transaction.
Stick to Online Banking for the Successful Balancing of Finances Abroad
The financial institution you chose should have an app, or you can use their website to check your remaining balance and to see your transaction history. This is especially useful if you plan on learning a language abroad because you have to break the language barrier. There’s certainly a website version in English, so you’ll save yourself from unnecessary stress and wasting time explaining things to someone who doesn’t understand you. Also, here’s another banking tip: the financial institution you chose might require that you activate online banking. Don’t forget to check if that’s the case with your choice as well.
If You Have Any Kind of Loans, Find the Best Way to Transfer Money to Your US Account
If you were wondering Can I keep my US bank account while living abroad, the answer is – not only that you can, but you also should. The fact that you’re moving internationally doesn’t mean that you won’t have any need to pay for something back home. Many situations can happen in just a year where you must transfer some cash to your account in the US, so keep it active.
If you still own a property in America, there are costs associated with it, such as property management, bills, mail, taxes, loans, insurance, and much more. For that need, find out the best way for you to transfer money back home as an expat. Here are some suggestions:
Don’t Withdraw All of Your Money from Your US Account
Unexpected costs are real and scary, and as an expat, you must be ready for them so that they don’t ruin your plans. You might get robbed, or your laptop could break down, or something else can go wrong that your insurance doesn’t cover. Having some cash on your accounts back home as a backup plan can be a lifesaver, so make sure you don’t transfer every single penny to your new foreign bank.
Getting an Accountant Might Be Ideal to Manage Finances at Home When Living Abroad
It’s not the cheapest option, and it’s certainly not something most people have on their moving abroad checklist, but it’s definitely worth it. Since you won’t be there to handle payments by yourself in the US, it’s a very good idea to have an accountant or an attorney who can do that for you. They can receive your mail for you, solve any possible problems, and be your emergency contact.
Think Like a Local and Spend Like One
The best way to be in control of your finances back home and overseas is to fully transform your mindset to the local one. Be aware of the difference in currency and don’t get carried away if the lifestyle is much cheaper than the one you’re used to. In general, the cost of living in the US is more expensive than in many parts of the world, so paying for a bunch of things with only ten bucks can be deceiving. Get used to converting the currency in your head before paying for something until you fully adjust to the local cost of living.
Don’t Fall Victim to a Scam
While you’re trying to fit in, you will still be a tourist, and some cities are notorious for scamming foreign visitors. You can easily become a victim of pickpocketing, unverified currency exchange, asking for cash or your information while promising you’ll get something that you will never see in your life. Researching all possible scams should be on your moving checklist, but how you carry cash is also important. In the video below, you can see several tips on how to transfer your currency in the safest way.
Relocate With a Professional International Moving Company That Can Guarantee Their Quotes
It’s a no-brainer that international moving is expensive, so it’s essential that you find an overseas shipping company that won’t make it even more unaffordable. When choosing an international moving company, pick the one that has all-inclusive and guaranteed quotes so that you can be positive that no unexpected costs will appear out of nowhere. It’s one of the crucial answers to how to move efficiently. Also, before you start packing to move, ensure that the overseas moving company you picked offers all the shipping overseas you require. Professional and reputable movers should provide you with everything from international moving by air to efficient overseas vehicle shipping. Contact them and schedule a free home estimate and decide whether you require packing services for your household goods, custom crating of delicate items, or a storage unit. Moving abroad sometimes even means getting oversized freight, so check if the company offers that as well. Once you get your set-in-stone price, the only thing left is to decide what to pack when moving abroad and enjoy the adventure.