Essential Financial Steps to Take Before Moving Abroad
If you’re thinking about moving abroad, you’ve probably already considered the important things like where you’ll live, if you’ll work, and all the ways you’ll enjoy your new home. However, it’s vital that you also have a financial plan in place before you begin your move, to make sure you’re prepared and protected.
Below are some important financial steps you should take before you move abroad.
Save Before You Move
It’s really important to build up some savings before you relocate. How much you need will differ depending on your circumstances, like how big your family is, your living arrangements, and whether or not you’ll be working. However, you should at least have enough to cover the costs to set up your accommodation, like a security deposit and the first month’s rent. You could also benefit from saving up enough for your first few months of living expenses, especially if you plan to look for a job once you have moved.
The advice from expats is that you should save up for more than you might think you need. You’re likely to encounter surprise costs like visas, extended storage for your homeware, and even legal fees when buying or renting, so by having some extra saved, you can make sure you’re always covered.
Set Your Budget
Whilst you might not be able to prepare for every eventuality, you should try to plan out your budget as best as possible before you move. You should research living expenses in the place you plan to move to, like rent or property prices, food, fuel, transport, and utility bills, as well as what money you’ll need for non-essentials like entertainment. You should consider the exact location you’ll be moving to – a big city will likely have higher living costs than a rural town in the same country.
You should look online to find out how much things cost in your new home and work out how much you’ll likely need. You could even speak to other expats who live in the same area or find expat blogs where people have detailed their own budget and cost of living.
Move Your Finances Online
You should move as much of your finances online as possible before you move. This includes any bank accounts that will remain open and any debts that you are still paying off. You should inform the organisations that you will be moving abroad and make sure they have the right contact details for you.
Some banks or financial organisations may require you to have an address in the same country – in that case, ask a trusted relative if you can use their home for a ‘care of’ address. You should also ensure that the organisation has an email address that they can contact you on directly.
Find a New Bank
Wherever you’re moving to, you’ll need a local bank for your finances. You should research banks before you move, and make sure there is a local branch near your new home and also whether they have a wide ATM network so you can always access your cash.
Some countries and some banks will allow you to set up a new account from outside the country, so you might be able to organise it before you move. Others will require you to have a permanent local address, so you may have to wait until your accommodation is sorted and you have moved to the new place to set up your new account. As with your other finances, make sure you can also access your local account online, as this will make things easier if you have to move money between your accounts.
Research Expat Taxes
You should make sure you understand your tax situation before you move. If you are moving from the UK, you may still be liable to paying taxes if you are still receiving an income from a UK source – whether that’s from being employed or from rental income.
You should also research the tax implications for your new country, to fully understand what you will be expected to pay and when. You may be liable to paying tax on a property you buy and also if you will be employed, so make sure you fully understand the expectations, so you’re prepared.
Sort Your Pension
If you’re retiring abroad, you will need to make arrangements so your state and/or private pension are deposited into your new overseas bank account. You may be able to move your private pension to an overseas pension plan, where you may get some tax benefits – however, you should always speak to a financial advisor before moving any of your pension plans.
If you will still be working when you relocate, you should look into how you can continue to pay into your pension plan, and whether it’s in your interests to move to an overseas plan. If you will have a new overseas employer, they may already have a pension plan in place, so you should look into this and find out the details.
Sort Your Healthcare
Not every country has free healthcare, so you may need to purchase health insurance. You should research what health facilities are available in your new country and see what the process is for expats. You may be able to access free healthcare if you’re working, or you may always need to pay. State healthcare systems will differ in each country, and private healthcare services may be preferred.
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