Moving abroad can be an exciting new chapter in your life. But to make the dream work, it’s essential to do a little groundwork and get your finances sorted.
Packing up your life and moving it to another country can be an expensive venture. And on top of that, you have to get to grips with a new currency.
To help you avoid some of the most common financial mistakes, we’ve put together this useful list of things to consider when relocating.
1. Take your finances online
Using online financial services can help you to manage your money efficiently and cost-effectively, no matter where you are in the world.
If you’re not yet familiar with online banking, moving to another country is an excellent reason to get to know it.
It’s a good idea to retain your bank account in your home country for some time after relocating. However, calling your bank from overseas will be costly, inconvenient, and time-consuming. So, ensuring that you’re all set up with online banking and electronic bank statements before you move is a must.
Why not registering for online banking with your new overseas bank? It will make it quicker to perform simple transactions, especially if you’re not yet fluent in the language.
Online money transfer services
WorldRemit’s digital money transfer service allows you to transfer money to 150 countries around the world using your computer, tablet or smartphone.
Use our overseas money transfer service to:
- Transfer yourself money
- Make business payments abroad
- Send money to friends and family abroad
2. Get the best exchange rates
The exchange rate is the value of one currency against another currency.
If you need to use a service to transfer money from one currency to another, shop around for the best exchange rate to save money. Settle for a service with a low exchange rate, and you’re essentially throwing away money.
Transferring yourself money using a digital money transfer service can be the best way to exchange currency.
WorldRemit customers can opt-in to receive daily notifications straight to their phones about the latest exchange rates for their chosen currency. This will help you to choose the most cost-effective time to make your transfer.
3. Get the best deal on transactions
Whatever your reason for sending money abroad, make sure you’re not being overcharged for the transaction.
While it may seem that sending money overseas with your bank is the most convenient option, it is probably not the cheapest.
Banks are notorious for providing poor exchange rates and high transaction fees. Your recipient may also be charged a fee to receive the payment.
Shop around and explore online money transfer providers who often charge lower fees. This is because they have fewer physical office or branch locations to pay for and can, therefore, pass these savings onto their customers.
4. Be debt-free when you move
You can’t escape your debts, even when you leave a country!
If you have debts at home, inform them that you’re moving overseas, so you can work out the best way to keep making payments from abroad.
Your overseas creditors can still take action to collect the debt, even if you’re living abroad. Trying to ignore demands for payment could have serious consequences.
To ensure that you don’t miss any payments, set up a recurring payment to keep chipping away at your debts while you’re out of the country.
5. Choose the right time to close bank accounts
When moving to another country, your credit history may be used to determine your eligibility for accommodation or financial services, so it’s important to protect it.
One thing that can harm your credit score is closing multiple bank accounts and credit cards all at once.
So, don’t rush to close all your accounts just because you’re moving abroad. You may still find it useful in the future to have a bank account and credit card in your home country.
If you have many different credit cards and bank accounts in your name and wish to close some, do it over an extended period (it protects your credit rating).
6. Stay in touch with financial institutions
Before you leave the country, make sure that you’ve informed all your financial providers of your move.
If you don’t tell them, your bank may freeze your account when you try to access your money from overseas.
If your bank requires you to have an address within the country, you may be able to change it to a trusted relative’s address. Make sure you’re also registered for online communications to ensure that you don’t miss any relevant notifications about your account or service.
7. Have all the right documents
When you first arrive in a new country, there’ll be lots of papers to sign and forms to fill out to get set up for your new life.
You’ll need to find a place to live, a job, and open a bank account. You may also need to need to sign up with utility providers, register with healthcare providers, or apply for places at schools, colleges or universities.
All these tasks will require you to present official documentation to prove that you are who you say you are.
Without the right documentation, you could face delays, extra expenses, and unnecessary stress.
Just some of the documentation that you may require includes:
- Birth certificate
- Change of name certificate
- School, college and university certificates
- Past payslips and bank account statements
- Medical records
- Work permit
- Marriage certificate
- Tax records
- Driver’s license
8. Get insured
Having the right health, life, and home and contents insurance when living abroad is crucial. Should the worst does happen, you want to know that you’re protected.
Always use a price comparison website to shop around for the best deal on insurance to avoid paying over the odds.
Check the details of each policy very carefully to make sure that you are not over or underinsured.
In some countries, having valid health insurance is a mandatory requirement.
9. Stay on top of your taxes
Filing your taxes in a foreign country can be complicated.
When you move abroad, it’s vital that you fully understand your tax requirements in both your home country and the country that you’re moving to.
Filing your taxes incorrectly could result in fines and penalties.
Tax obligations vary around the world, and you may find that the country you’re moving to has much higher or lower rates than you’re used to.
It may be worth getting the help of a financial advisor who understands the tax regulations and requirements of both the country you’re moving from and to. An expert may also be able to advise you on how to make savings on your tax bill.
Don’t forget to inform the tax authority in your home country that you’re moving abroad.
10. Do your research
It’s a good idea to research the cost of living in the country you’re moving to. You can then work out how much you need to save up for the move and a realistic monthly budget to make sure your relocation runs smoothly.
Research job prospects
If you’ll be job hunting once you arrive, research job opportunities before you go and find out how much you can realistically expect to earn. Then you can work out a budget for rent, bills, transportation, and food.
Research living expenses
It’s easy to assume that that living expenses will be similar to those in your home country. The cost of living around the world varies vastly, and a high income usually goes hand-in-hand with high living expenses.
List all the possible expenses you can think of by researching online or by talking to people already living in the country. Set a lower and upper limit for each expense to give you an idea of the best and worst-case scenarios.
Here are just a few of the expenses you should research:
- Moving expenses
- Visa and residency fees
- Exchange rates
- Set a budget
Using this research, you can then create a monthly budget in the local currency, based on your projected income.
Keep up with your money management and ensure that you’re never spending all your income.
11. Get local advice
One of our top tips for moving abroad is to seek advice from locals. It's one of the simplest and most effective ways to save money.
Support services, professionals, and your network can all be valuable sources of information. Don’t be shy about asking for a piece of advice from locals - most people will be more than happy to share their knowledge.
Speak with people and discover local places to shop and eat that excellent offer value for money!
12. Know your fees and interest rates
When you move abroad, you will still be able to use your credit and debit cards as you would in your home country.
Before you do so, contact your financial service provider and ask what fees you will be charged for the service.
Charges may include:
- Overseas transaction fee
- Cash withdrawal fee (at an ATM)
- Exchange rate mark-ups
- Interest charges
It's a good idea to pay off your credit or debit card bills in full each month to avoid high-interest charges on purchases.
13. Think about your retirement
Let's have a look at how you can look after you and your family financially in the future, too.
- Having the right pension in place means that you’ll be able to stop working when you want to.
- Before moving abroad, you should take the following steps to look after your pension:
- Find out if your job abroad includes a pension scheme.
- Inform your current pension scheme provider that you’re moving overseas.
- Decide whether to leave your existing pension with your current provider or transfer it to a new scheme in the country you’re moving to.
- Keep all your payslips and other relevant documentation from employees. You’ll need proof of years worked both abroad and in your home country to help you claim a pension upon retirement.
The simple way to transfer money
One part of managing your money that needn’t be complicated is moving money overseas.
At WorldRemit, we have over 125,000 5-star reviews from happy customers who’ve benefited from using our fast, secure and affordable service.
Using our app or website, you can choose from a variety of convenient pay-out options, including mobile money, airtime top-up, bank transfer and cash pick up. Making a transfer is easy, so sign up today and start saving money when sending money abroad.