Many people are daring to explore the world and often take their work with them. However, living abroad has financial implications that need to be considered.
It is a fact that expats finance become more difficult when living far away from their home countries, so good financial planning is a must. In this article we will tell you everything you need to know about financial planning for expats, so you can enjoy your stay abroad.
The financial implications of living as an expat
One of the biggest attractions of living abroad, even for a short time, is enjoying a lower cost of living. Some destination countries are good. Options for increasing income or saving more than you would normally do in your home country.
Still, living in any city has certain financial implications, such as the way you will earn money or the budget you will distribute to your financial obligations other than daily living, food, and recreation expenses.
How to earn money as an expatriate
Start by researching the countries or cities you would like to live in: their cost of living, and the budget needed for transportation or recreation, among other expenses. Make a list. Get a rough idea of them and explore ways to earn the amount of money each month.
Remote work options include marketing, copywriting, language classes, and activities that don’t involve face-to-face time with clients. In other cases, some employers offer telecommuting opportunities that allow employees to keep their current duties overseas.
On the other hand, there is also the possibility of working on-site at a company. According to data from the “Health and Risk Benefits Design for IME” study, 31% of companies surveyed expect expatriate career profiles to increase during 2022 (WTW, 2022).
Find out which companies offer job opportunities for expatriates at the Foreign Affairs offices or job portals in your country.
Follow a savings or investment strategy
Although, the cost of living may be lower in other countries. It’s a good idea to keep saving money for as long as you stay there. You can even take advantage of this to save more than you could in your home country. To do this, follow strategies such as:
- Set savings goals and commit to meeting them.
- Include savings as part of your budget.
- Open an account for this purpose.
- Reduce unnecessary expenses.
In addition, you can start an offshore investment strategy through a stock exchange to increase your income, earn returns and fight inflation. If you think you won’t have time to do this or want to avoid the stress of buying and selling stocks or rebalancing your investment portfolio, consider seeking the support of a financial advisor.
How to manage banking as an expatriate
You may use your domestic account to pay for local expenses back home, such as a mortgage or property taxes.
Keep in mind that foreign exchange rates are expensive. Using your current credit cards may result in foreign transaction fees. However, there are credit cards specially designed for international travel that can be helpful.
Another good idea is to seek professional advice, as there are several companies that offer specialized services in banking and finance for expatriates, to facilitate the procedures in this matter.
Tax payments for Expats
An important consideration is the payment of taxes since you will have tax obligations in your country of residence, in addition to those of your country of origin. For this, we recommend you investigate which the laws that apply in the city where you plan to live.
However, there are also positive aspects, such as the right expatriates have in some countries to certain deductions or credits. Find out what rights and obligations you have about the payment of taxes in both countries to organize these procedures.
We hope these expat financial planning tips will help you create a strategy that works for your finances to make the most of your time abroad.
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