People go abroad for various reasons. Maybe you have landed a dream job in an international company or you want study for your doctorate without drowning student loan debt for all the life. Many Americans choose the emigration option if they have chronic health conditions and an in-demand career or spouse with such a role — they can often get much better health care abroad for much less.
Whatever your reasons, there are many smart financial decisions you need to make as you transition. The bad ones can frustrate you, leaving you without access to needed funds and credit. What should you know before you go? Here’s how to manage your funds if you move abroad.
Save a big sum
Lots of things can happen when you move abroad and most of them cost money to fix or fix. You will start incurring expenses long before you leave. Establishing a comfortable life abroad can take a considerable amount of money and you need to be prepared for the unexpected.
How much should you save? Many experts recommend between $5,000 and $8,000, but those numbers may not be high enough to support your lifestyle. The best advice is to have several months of living expenses in the bank before you leave. This includes money for accommodation and utilities, day-to-day costs like food and rides – you may not have a car at first – tuition fees and the inevitable gifts for people at home. home.
will you be working? If so, you’ll learn more about your banking options over the next few weeks. However, you might need more savings if you already have gone through the onboarding process or plan to do so shortly after your arrival. Your ultimate nightmare is to find yourself stranded overseas with no work or money.
What expenses can you expect? Here are some requirements that some emigrants neglect to their dismay.
1. Passport and visa fees
You will need a passport to travel abroad. It currently costs $160 for map and book Position. Although either alone is cheaper, it is imperative to order both if you are planning to move abroad. You cannot use the card alone for international air transport travel.
Work and residency visa fees vary depending on the country you choose to call home. However, you can expect to pay several hundred to just over $1,000 each.
2. Fees for sending money home
It’s not free to send money home. However, you have affordable options – yet another reason to overcome your technophobia. More on that in a moment. Fortunately, technology is making it easier to find the cheapest ways to send money home.
3. Shipping costs
Are you planning to ship your car or household furniture? If so, prepare for sticker shock. It can cost up to $5,000 for standard shipping your vehicle and up to $40,000 to fly it to your destination.
Your furniture probably weighs more than your vehicle when combined. Are you ready to add more to your tab? Otherwise, it might be more profitable to sell or donate your possessions here and slowly rebuild your collection once you arrive at your destination.
You will need insurance for any goods you are shipping and to cover your trip. You will also need to find out about home and auto coverage requirements when you move.
Fortunately, wherever you move, health care is more affordable than in the United States. However, you should consider a temporary policy to ensure that you are safe if the unexpected happens while you wait for your residency visa and foreign coverage to take effect.
5. Cost of living adjustments
Inflation hit the world, but did not affect prices uniformly everywhere. Hope for the best, but be prepared for potentially higher costs at the grocery store or restaurant. Pack a little extra to ease the transition while you settle in.
6. An overseas emergency fund
Food isn’t the only reason you might run into problems before fully settling abroad. You need to make sure you have enough extra money in a cash account – or a secret cash reserve – to cover things like vehicle breakdowns or acute illnesses.
7. A Home Emergency Fund
You never know what the future may hold for you. You may need to return to the United States on a certain date – and you will need money when you return to shore. Keep several thousand dollars in a liquid savings account that you can’t access online. This way you have no option to spend the money abroad and it will wait for you to return.
Open a local bank account
You need a local bank account in your chosen destination. Otherwise, you’ll struggle to make deposits and withdrawals and rack up a small fortune in ATM fees. You will also need it for direct deposit if you plan to work and not fully retire.
You go need the following documentation open a bank account in many countries:
- Two bank letters of credit. A credit card can work if you only have one domestic bank account.
- At least one professional reference. Your foreign employer is a good choice if you are moving for work. If not, the person responsible for helping you through the visa process may agree.
- Two forms of photo identification. Usually your driver’s license and passport.
- Proof of address. Most banks prefer that you have a utility bill in your name.
In addition to establishing utilities at your new residence, you must obtain a work or residence visa in many countries to open a bank account. You will also need an initial deposit – requirements can be as high as $500.
Another option is to use an international bank where you already have an established account. However, do your research carefully. Is there more than one branch near your destination? Things can change, and you don’t want to rush out to create a different account if your nearby location closes.
Keep your account at home
Once you’ve opened a bank account overseas, you might be tempted to cut the cord to your account at home. Resist the temptation to do so, even if you left the United States as an angry expat. Why? here are some good reasons you should do this :
- Maintain your credit: It can be difficult, if not impossible, to restore your credit if you ever decide to return home but have closed all accounts. This may take years, during which time your financial options will be limited. You may not be able to get a home or car loan.
- Pay US bills: It is much simpler to pay all the debts you have in the United States with American currency rather than paying a conversion fee.
- Enjoy Shopping: When the initial iTunes store was created for iPods, it was initially only available in America. Other countries could not take advantage of it, but American emigrants with an account set up here could.
- Have built-in security: You may not want to imagine it, but scams do happen. You don’t want to find yourself stranded in Bulgaria without a penny in your local account, with no money and no purchasing power.
Today’s connected world makes it easy to manage your bank and investment accounts from anywhere. However, you have to overcome your technophobia to do so. You might be able to get by without these amenities when you have a local branch just down the street whose employees speak perfect English. Trying to make financial transactions when neither party speaks the other’s language well is interesting to say the least.
If you haven’t set up online banking for your checking, savings, and investment accounts, do so before you leave. Schedule a time to sit down with your banker and go through all the features so you feel confident accessing your financial information from a phone or computer.
This is also the time to familiarize yourself with any money transfer apps you might be using. Moneygram and Western Union were once the only choices, but now you can opt for services like PayPalWiseXoom and OFX.
Maintain your investments
According to Morningstar, the United States is the best place to invest regarding regulations, disclosures, fees and expenses. In many cases, you will also receive superior customer service from representatives located in the United States.
Therefore, it’s probably wise to keep your investments as they are, assuming you’ve established online access. While you don’t necessarily need a foreign investment adviser in addition to your US adviser, you may want to retain one to help you with tricky tax and retirement planning issues.
Talk to a financial advisor about retirement accounts
Here’s where that foreign or foreign-trained financial advisor can come in handy. First of all, you should probably leave your money where it is if you haven’t reached 59.5 yet. Otherwise, you will incur a heavy tax penalty for early withdrawal.
In many cases, it is better for your money to stay where it is because of the advantages of investing in the United States. However, you could come out ahead by transferring it to a foreign account. It all depends on the country, so check with a qualified professional.
File your taxes
Did you think you could evade taxes by moving abroad? Unfortunately, it’s not that easy. The United States requires you to pay income taxes regardless of where you live, unless you renounce your citizenship. To do this, you will have pay high fees of $2,350 and renounce the advantages offered by dual nationality.
Your due date changes, however. You will need to file by June 15 to remain compliant. You will also have to follow the rules of the country where you are emigrating.
Keep track of your money after moving abroad
Moving overseas is one of life’s most exciting adventures, but it can also be financially daunting. Follow the guidelines above to manage your funds if you are moving overseas. You’ll enjoy a much smoother transition with enough cash to grease your wheels.