1. Create a realistic budget
It may sound obvious, but many of us who experience financial stress may have never thought to create a solid budget. Start by tracking your income and expenses, considering any differences in currency or cost of living compared to your home country. A clear budget will help you understand your financial situation, what you can afford, and where to invest your money for more peace of mind.
2. Create an emergency fund
Building an emergency fund is crucial for anyone, but especially for expats who may face unexpected challenges or have to return home on short notice. Aim to save at least three to six months' worth of living expenses to give yourself some peace of mind should an emergency happen.
3. Understand your taxes
Becoming well-versed in the tax regulations of your new host country may not sound like a fun part of the adventure, but it’s essential to your financial well-being. Expats often have unique tax considerations, such as foreign income reporting and tax treaties, when they move abroad. It’s crucial to be aware of these and know where and how to properly pay your taxes while abroad. Don’t be afraid of seeking professional advice if you get overwhelmed – it's well worth it to make sure you’re on the right track.
4. Manage your currency exchange wisely
Fluctuations in exchange rates can impact your finances more than you might think. Consider strategies like using a multi-currency bank account or currency exchange services to manage your funds and even potentially reduce your currency exchange costs.
5. Find the right bank for you
Choose a bank that offers expat-friendly services, such as multi-currency accounts, low international transfer fees, and easy access to funds from abroad. Just as you would at home, research and compare different options and speak to other expats to find the right fit.
6. Plan for retirement
Just because you’re living abroad doesn’t mean you should neglect your long-term financial goals. Whether you’re planning to return to your home country or stay in your new home, you should explore retirement savings options for both and consider how to make the most of your funds.
7. Insurance is key
8. Seek expert advice
9. Consider adapting your lifestyle
Depending on where you’ve moved to or from, the cost of living may have changed greatly for you since moving abroad, and you may have to consider adjusting your spending habits. While it can be tempting to splash out and enjoy your trip as much as you can, but remember your long-term goals and where and when you might need that money in future.