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How to manage your personal finances while living abroad

Expat lifestyle

PUBLISHED: 27 August 2018 | LAST UPDATED: 9 May 2024

Packing up and moving abroad can be overwhelming, and a key factor that contributes to expat stress is preparing their finances for life in another country.

AXA’s recent Mind Health Study found that individuals living abroad were more likely to find financial issues negatively impacting their health and wellbeing than locals. In fact, around 35% of expats said financial security was a worry.

If you’re looking for ways to alleviate the burden a little, here are five tips to help you manage your personal finances while living abroad:

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1. Open a local bank account with online access

In most cases, there’s nothing to prevent expats from keeping their home country bank account. If you don’t plan to live abroad for a long time, it might actually be worth keeping your existing accounts and potentially even other assets, like property. However, having a bank account in your new home country will make payments simpler, quicker and cheaper, as overseas bank fees can start to add up quickly.

The best way to prepare before moving is to gather all the documents that you might need to set up an account – most likely an up-to-date passport, visa and proof of income or employment. It’s also a good idea to learn how to transfer money overseas, should you need to send some to friends or family back home.

2. Keep an eye on exchange rates

When you earn an income in the local currency, the conversion can actually mean you’re earning a significantly different amount to that which you would earn back home. For example, a British expat earning dollars in America will have to deal with currency fluctuations when the value of the dollar or pound respectively fluctuates.  

To manage this, do plenty of research before you relocate into how the currency you’re going to be using has fluctuated over recent weeks and months. Having a good understanding of the market and then keeping a close eye on how the exchange rate behaves will go a long way towards mitigating potential risks.

3. Find out how the local tax system works

Anyone leaving a country for a long period of time – such as for an international secondment – needs to notify the relevant authorities in order to avoid any legal complications. For example, expats leaving the UK should contact HMRC to ensure they’re not paying too much or too little tax while overseas.

Knowing what tax needs to be paid can be tricky, especially when it comes to an issue like property. So, depending on the how complicated the system is in your new home country, it may be worth consulting a workplace global mobility manager or HR representative to ensure everything goes smoothly.

4. Consider how the move will impact your pension

Having a pension that you’re actively paying into is a great way to futureproof your finances. If you’re moving abroad, make sure to check how you can continue to pay into your voluntary pension, or consider whether you’d like to start one from scratch. If you work for a company with an HR department, ask them to help you find a pension provider in your new location.

For expats who have left the UK, if you’re nearing retirement age, you should also make sure the International Pension Centre is aware you live abroad. That’s because, if you’ve paid enough UK national insurance contributions to qualify, you can still claim your state pension.

5. Get expat health insurance

If you’re moving to a country where healthcare isn’t part or fully-funded, by the state, then expat health insurance should be a top priority. This might seem like a costly exercise, especially if you’re not used to paying for healthcare, but it will save you money in the long run.

Health and dental care can be unpredictable, with some local systems charging a significant fee even for a simple doctor’s appointment. Researching what health services are available in your destination well before you move is essential, and a sure-fire way to keep on top of expensive medical bills is to find an all-encompassing health insurance policy that will help to prevent large, unexpected bills. 

With exchange rates, products and service prices fluctuating from country to country, the best way to keep on top of your everyday finances is sometimes to simply bring in a helping hand. There are plenty of great mobile apps that you can rely on to help keep track of your spending while abroad, and your company HR representative will likely be able to help, too.