Before I share my 6 helpful finance tips when living abroad, let me quickly share a story with you that inspired me to write this post. The other day, I visited my bank when I overheard a discussion between an elderly couple and the branch manager. Quickly it became clear that they recently moved back home and were visiting to close some of their out-standing affairs. Apparently, they tried to close their bank accounts and weren’t able to because they already changed their phone numbers and didn’t live in the country anymore. I sympathized with the couple and could quickly relate as I know that dealing with banks can be frustrating, especially when you are relocating or moving back home.
This example is just one of the many finance-headaches that you can encounter when living abroad and that’s why the right preparation and management of your finances is key. I’m not a finance expert, far from! However, I’m confident the finance and banking tips will help you manage your finances abroad and save you from the occasional “finance-headache.”
Open a local bank account as soon as you can
Having a local bank account is essential to ensure you can receive your salary and pay your deposit/rent for your new accommodation. It will not only make all these things more manageable, but it will also be (a lot!) cheaper to pay in the local currency.
Rules for opening a local bank account can vary. In most cases, you need to have your visa and/or other local paperwork in place before you can open an account. As soon as you have them ready, make sure you open a bank account straight away!
Keep your personal details updated
Don’t end up like the couple from the intro, and make sure to always keep your personal details up-to-date. Provide personal information that is not likely to change soon, or make sure to update your details as soon as they change. This is especially the case with your phone number. Nowadays, your phone number could be required to verify payments or logging into your bank’s app. So, keep this in mind, especially if you’re relocating or moving back home – it can save you a lot of trouble!
Consider appointing a local finance advisor
Your personal finance, especially loans, taxes, or other financy-things, can be daunting. But managing these affairs in a foreign country with its own rules and regulations can be even more challenging. If you are a finance-wizard, I’m sure you can come a long way. Suppose you are more like me and see your personal finance as another annoying admin task – I can highly recommend finding a local finance consultant.
Yes, tax consultants can be expensive, but if you have a good one, it can save you a lot of money in the long run and, more importantly, spare you from a lot of frustration.
Keep your personal finance simple
Unless you are planning to migrate to a new country and live there for the rest of your life, chances are that you will move within the foreseeable future. This means you have to close your personal affairs before (or shortly after) you relocate. That’s why I can highly recommend keeping your personal finances as simple as possible. My tips to keep it simple:
- Try to limit the number of bank accounts (try to keep it to 2 max, one for savings, one for payments).
- Avoid signing up for local credit cards if you can. You don’t want to leave a country with debts (believe me, this happens more often than you think).
- As with credit cards, it’s advisable to avoid any local loans. Many companies nowadays have very appealing short-term and “cheap” loans, but don’t be fooled. Many of them can be expensive and very hard to close if you plan to leave the country again.
Moving your money
If you have saved money while working abroad, it can be difficult to decide how or when to transfer it. Like Transferwise and Paypal, there are companies to help you transfer money internationally and even provide services like “exchange rate alerts.” Making it super simple to transfer the funds to another account. Just make sure you are aware of local and international rules and regulations, especially regarding taxes.
Keep track of your paperwork
When moving overseas, make sure you keep your paperwork organized. There will be a lot of paperwork and personal admin, and keeping track of it will save you a lot of time. If you want to know more, also read: Managing personal admin when living abroad.
There you have it, my 6 helpful finance tips when living abroad. When it comes to managing your personal finances abroad, keep in mind that you will eventually leave the country again. How you set everything up from the start and manage it throughout your stay will significantly impact closing everything correctly when you go. So be organized, keep it simple, and stay on top of your personal finances as regularly as possible, saving yourself from a lot of frustration. And remember, I’m not an expert in the finance world, so when in doubt, make sure to contact an expert :-).