How to Manage Debt as an Expat 

August 2022

As an expat we know you are dealing with a lot of changes, between a new home, new cultures, and new faces. Unfortunately, even with the new opportunities that come with moving abroad expats are not immune to dealing with debt

Leaving your country for a new one can often come with a reality check of facing high amounts of debt. There are some methods to managing debt as an expat that you can introduce to reduce and manage the challenges you face.  
Debt won’t go away in a flash, but it can be managed effectively. A debt management plan will help you map out what you need to action. Start by listing everything you owe. Then begin to gather everything you have on your finances. The goal of a debt management action plan is to give you a clear picture of your finances and the total debt you owe.

To get your full financial picture money and budgeting services recommend breaking your finances into 5 parts to understand your full financial health as an expat.

1. List any incomes you have

2. List every expense you have, insurance policies, mortgage payments etc...

3. Calculate and list all your bills and debts or any money you owe

4. Note any information you have on your debts including due dates, interest rates and creditors

5. Estimate any of your assets, this includes savings, property, shares, and cars

This will provide you with a clear picture of what you are facing, and what you can afford to pay back. You can use your now informed understanding of your finances to map out an action plan. A budgeting calculator is a great tool to manage your expenses and payments each month.

One of the best strategies for paying off debt is to prioritise your urgent debt first. Credit card debt should also be one of the first debts you choose to pay. This is because credit cards can have a higher interest rate and tend to cost you more over time.
As an expat it is not uncommon to have multiple debts with different creditors. Getting your financial paperwork in order will keep matters clear and organized. Consider an electronic drive or folder for physical files. 
Any amount of debt can be overwhelming, it is very easy to avoid it or put it on the long finger. When managing your debt, it can be helpful to set up a goal or target to keep you motivated. 
This will allow you to map out your payments over the year. Take note of what pay check or income you will use to pay for each bill. A visual representation of your due dates will also help you avoid any late payments. 
Now that you can see where your money is going and what exactly you take in. It’s time to identify any bad spending habits you have. If you spend beyond your means, look to cut down on your expenses. Everything adds up over time and cutting down is the fastest way to see a difference.
While credit cards are very convenient spending more than what you have coming in can add to your outstanding debt. Cut back on credit card use until you have paid off your existing debts.
If you are juggling multiple debts then it might be time for you to consider consolidating your debts. Debt consolidation is a sensible financial management strategy, particularly for expats struggling with credit card debt. This allows you to combine multiple high-interest debts into one debt, which may have reduced interest and lower monthly payments. 
Sometimes professional advice can help you when you feel lost on how to handle your debt. As part of our expat assistance program, we offer multilingual confidential support on financial wellbeing from our team of financial specialists.  You can avail of our EAP anywhere or at any time of the day. Talking to a professional can help you get on the right track to managing your debt effectively. Contact our team of multilingual professionals today about our international health insurance options