That’s great news! I’ve been an expat in three different countries now and, after three and a half years of travel, I’ve learned a few things.
Moving to a new country can be hard. There are massive cultural differences and simply re-acclimating yourself can prove to be difficult. And money, of course, can be a major stress point when moving abroad. What used to be so easy in your home country no longer proves to be quite as simple.
Earning money, spending it, moving it, and managing it becomes an entirely different experience than you’re used to. No matter where you go, things just won’t be the same as they are back home.
1. Open a Local Bank Account
This is step number one and, for some reason, the most often ignored. Get yourself a bank account with a local bank.
You simply can’t manage your finances using your account from back home, especially if you’re going to be earning money in your new location. You’ll need a place where you can make withdrawals and deposits without hassle, and without getting charged extensive ATM fees.
If you use a foreign card in a local ATM, you’ll get charged by your bank, as well as the local bank, for one easy transaction. If I use an Australian account in China, I end up paying almost $10 to make one withdrawal, whether it’s for $20 or $2,000.
BANKING TIP: If you’re a US citizen, the Charles Schwab High Yield Checking Account reimburses all ATM fees at the end of every month. You’ll never pay another dollar, anywhere in the world. But you likely won’t be able to make direct deposits from a local employer.
2. Use Online Banking
Just as you would back home (I hope), sign up for online banking, especially if you’re in a country where you don’t speak the native language. For expats, when you’re in a foreign country where communication is difficult, and just the thought of going to the bank down the street makes you want to punch a wall or scream into your pillow, it’s best to be able to manage your money on your own.
If you need to check your transaction history or double-check your remaining balance, fumbling with ATMs or tellers in an entirely different language is not the first thing on anybody’s list.
BANKING TIP: If you want to order things online from a local website, like plane or train tickets, some banks/countries require online banking to be activated on your account. I’ve mostly found this in Asia where online banking isn’t as prevalent.
3. Keep an Account Open at Home
Don’t transfer all your cash to your new account. Keep a couple accounts or cards active back home, and keep an active balance on them. Unexpected things will arise at home, and you’re going to need a way to pay for them.
On top of this, should an emergency arise while you’re abroad, these backup accounts might be your only hope. You wouldn’t be the first person to have been robbed or scammed in a foreign country, and you don’t want to be stuck on the streets of Lisbon with no form of currency or place to go (though it might make for a great story).
BANKING TIP: Pick a bank account (i.e. Charles Schwab) or credit card (i.e. Chase) with no foreign transaction fees. You don’t want to be getting charged frivolously when something goes awry.
4. File Your Taxes
Even though you’re an expat and living abroad, you’re still a citizen in the country where you hold residence. Depending on where you live, you may or may not be required to file taxes (if so, online tools can be found here). You’ll need to do this research on your own, to find out what the requirements are for your home country, but don’t let this one slip by. The consequences can be dire.
BANKING TIP: Hire someone to do this for you. It’s expensive, but it can be worth avoiding the confusion.
5.Transfer Money Between Accounts
Work out a viable way to transfer money between your local and foreign accounts. You’re going to need a way to get money in and out of the country, and duct-taping stacks of bills to the insides of your thighs is not the most feasible. International money transfers can be complicated and costly, so research an easier way to do it.
BANKING TIP: PayPal is one option, but they require different user accounts for each country you bank with. Plus, if you’re using multiple currencies, you’re stuck with their conversion rate which is NEVER good. Try other options like TransferWise (get your first transfer free!) and HiFX for low-cost transfers.
6. Send and Receive Money From Home
As an expat, there is always a reason to send money to and from home. Whether you get stuck in a bad situation abroad, or you need to spot your little sister $100, keeping an open line for finances is a must. Quite a few times now, since I’ve been on the road, I’ve had to send money home or have money sent to me. So whether it’s only for peace of mind or a viable way to pay your bills, working out a way to send or receive money from home is vital to any expat.
BANKING TIP: Explore your options ahead of time. You don’t want to get stuck in Tasmania, without access to cards or cash, in the middle of a flood, with zero internet access (like I did). If you already know where to go (i.e. the post office) and what to do, the pains of wiring money become far less severe. And remember that most bank transfers can take a few days (unless it’s an instant wire transfer), so try to give yourself enough time.
7. Do the Conversions in Your Head
When you’re living abroad and dealing with foreign currencies, the money you’re spending doesn’t always feel like “real” money. Spending 100 Chinese Yuan doesn’t actually feel like spending $16 USD, so it’s easy to get frivolous because the actual value of the money hasn’t been internalized yet. Make sure, for every transaction, you’re converting to your home currency until you’re able to fully grasp the worth of your local currency.
BANKING TIP: Set yourself a simple daily budget in the local currency, and stick to it! If you’re any good at budgeting, that is.