Living and working abroad can be exciting, filled with adventure and an excellent opportunity to expand your career in a new country. Life as an expat is often filled with many challenges, such as housing, schooling, and settling into life in a new country.

One of the most difficult challenges is managing your finances as an expat in a new country. Managing tax, investments, insurance, and savings across two countries can add complexity to your financial affairs.

Here are some tips to help for planning and managing your finances as an expat.

Set goals and make the most of your opportunity

When moving abroad, expats often find themselves with an increased earning capacity and often in a lower tax environment. While this is a fantastic opportunity for wealth generation, it is important that you set clear goals for your time overseas to ensure you make the most of the opportunity.

With increased earnings and a new country to explore, it can be very easy to fall into the trap of simply increasing your expenses to match your new earnings. Setting clear financial goals will ensure you can still enjoy your time living in a new country without compromising your future goals. Creating a budget or setting up a regular savings plan can offer a disciplined approach to achieving those goals.

Understand your tax obligations

Living abroad as an expat will mean a new set of tax implications to consider. In combination with tax obligations in your home country, this can become a complex area. It is vital that you understand this or seek professional advice before making any financial decisions that can prove costly.

Review your existing investments and insurance

Expats often have existing investments and insurance in their home country that are retained when moving abroad. It’s important to know that some insurance policies may not cover you if you live overseas, or you may have investment structures that are no longer compliant or are no longer beneficial now that you live in another country.

Ideally, these will have been reviewed before you move to your new country. If not, it’s essential to check with your providers or seek expert advice to ensure your existing investments or insurance remain suitable for you.

Be aware of currency risk

Living in a new country will mean earning money in a new currency and adds another factor to consider in your financial decisions. Expats can often get caught in the trap of trying to become an expert on foreign exchange, which can often lead to costly mistakes.

Currency markets can be volatile, and movements can be difficult to predict. Having a plan for moving money from one country to the other is important. Transferring a large sum at the wrong time can erode some of those hard earnt savings. Having a plan to make smaller transfers over a more extended period can help reduce the impact of currency movements.

Don’t forget about Estate Planning

Often overlooked, Estate Planning is an important consideration as an expat. You may now own assets in multiple countries, with each country having different estate laws. It’s essential to know that your current Will in your home country may not be sufficient, and this needs to be reviewed.

It becomes more important if you have children, as often there may be guardianship laws in your new country that you need to be aware of and plan for.

Plan for your move home

Life as an expat can often be unpredictable, and although you may have a plan for returning home, these plans often change quickly. If you know that you are returning home in the future, it is important to start planning for that as soon as possible.

Planning can help you with financial decisions such as navigating foreign exchange, managing your investments or even property purchases. But it will also help with lifestyle decisions, like where you plan to live or the education requirements for your children.

Seek Advice from the right professional

Moving to a new country is exciting and can come with some unique challenges, but the key is to be prepared and, in many cases, engage the right professionals who understand your personal situation.

While we have touched on some of the considerations for managing your finances as an expat, many more can impact your time living overseas. Being prepared and having the right professionals to help you on your journey will make your expat experience all the more rewarding.

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