Congratulations! Your dream has come true – you have got a job abroad. However, you should take into account some difficulties concerning your budget. Indeed, financial planning might look unexciting while you are dealing with the process of relocation, but it is crucial.
The first calculation that should be done is the “hidden” cost of your relocation. Although the company you will work for probably gives you a stipend, it will hardly cover all expenses. Fees for the visa, healthcare insurance premium, and the deposit for your flat will be deducted from your savings until you get your first salary in your new place of residence.
As far as the currencies are concerned, their exchange rate becomes a source of trouble for those who relocates abroad. Banks of the old type often include fees in awful exchange rates in international payments. Thus, you should immediately open Wise or Revolut accounts in order to use better exchange rates with lower fees. Even though it seems a small step, it can save you quite a lot of money on an annual basis.
The next element on our list is your housing. This aspect is going to be your major monthly expense, not to mention the most expensive one. Moreover, it will cost you even more in case you relocate to the place like London or Singapore, where you need to pay three months’ rent at once in order to receive your flat. No matter how attractive your offer seems, you should visit your location in person before signing a contract. The best solution for the first period of living in the city is short-term rental services like Airbnb or Furnished Finder.
Afterwards, you are going to become a foreign taxpayer very soon, and you had better take care of this aspect beforehand. You need to check whether there is Foreign Earned Income Exclusion program or tax treaties between your home country and the place where you are going to live and work. Consulting with an accountant who specializes in expat taxes costs some money, but it protects you from troubles in the future. Save all the receipts and financial documents in a digital format because you will need them during the tax season.
Now it is high time for you to make an emergency fund, which is separate from the travel budget. This fund should include money which is enough to cover your expenses for three months in case your employment starts late, you have any medical problems, or you decide to leave the country suddenly. This fund will definitely come in handy if you have to come back home urgently due to certain reasons, and it will not be used for other things.
Also, it will be beneficial to keep all your bank accounts and credit histories open if you are sure that you will come back someday. It is quite troublesome to open a new account while you are abroad, and you had better avoid this trouble. Make your debts pay automatically.
Financial issues of expatriates may be numerous and unpredictable. Nevertheless, there is no need in worrying because you can prevent these problems by following some recommendations listed above.