Making a move to another country can be an exciting adventure. While you may be dreaming about the amazing new food options, becoming bilingual, and all the incredible scenery, there’s a few other details you may need to consider as well. Take a peek at a few financial tips to help make the transition smoother.
While it may be tempting to just catch a flight to your dream destination and worry about employment later, you may want to think again. There are plenty of stipulations about working in another country. Without citizenship or prearranged employment, securing the necessary work documentation can be quite difficult—and without a reliable source of income, living in a foreign country can quickly become next to impossible. Some governments won’t grant visas to foreign workers unless employment has been prearranged. Additionally, before making a move, it’s a good idea to do some research about a country’s market and understand what job types and industries are in need. This will help you better prepare and highlight the ways you can contribute to a country’s infrastructure.
Have an emergency fund
No matter where you live–whether it’s stateside or abroad– having an emergency fund is a must-have in the event of unexpected expenses. If you have car trouble, need a new computer, or have some unforeseen health complications arise, emergency funds will prevent you from dipping into cash you’d otherwise use for living expenses. It also prevents you from having to turn to the use of a high interest credit card. Make sure you automate a transfer from your checking into your savings and emergency funds each time you get paid—it’s one less thing to think about and it ensures you’re consistently contributing!
Negotiate your contract
If you’re in the lucky camp of being sponsored by a US company to work abroad you still want to take some time to review your contract. Read the fine print and make sure you understand all the stipulations before signing anything and catching a plane. For instance, there should be provisions that detail what would happen if you lost your job as well as an outline for protection or financial guarantee once a contract has been completed.
For almost everyone, budgeting is what ensures you’re not overspending or living beyond your means. This will become especially true if you plan to make a move overseas. Even if you have a job in place already, alongside emergency funds, budgeting before you leave will help create an even larger cushion for worst case scenarios, such as job loss. Set a realistic budget for yourself and then stick with. Avoid racking up balances on high interest credit cards, and if possible eliminate all debt before making a move.
Investigate banking options
Before you leave the country, it’s important to check into what your foreign banking options are. Will your deposits be guaranteed? If so, by whom? This is where research will be crucial. Verify whether deposits are guaranteed and by whom. You’ll also want to consider the stability of a country. Here is where it may be a good idea to consult a financial advisor. They can share their expertise, help provide information on private foreign banks allowances for U.S. citizens, and when the time comes, recommend an accountant to provide tax preparation services, which can become incredibly complex when living as an expat.
Be prepared to file two sets of tax returns
If you think the domestic tax process is confusing, then you’ll probably not be too happy to hear that moving to another country complicates it even more. Even if you’re residing in another country, you’ll still need to file US taxes as well as foreign taxes—which means you need to do your research on the specific tax regulation in your new country of residence. If you’ve got outstanding tax debts in the United States, things become even more complicated and may prevent you from leaving the country. If you’ve received a Notice of Levy, or know you’re not up to date on your taxes, expect some pushback when it’s discovered you’re attempting to work in another country. For more details consult an accountant or certified tax lawyer. You don’t want Uncle Sam mad at you when trying to become a world traveler, so make sure all of your financial ducks are in a row.
Moving abroad is exciting, but it comes with its fair share of headaches. Get your financial strategies in order before booking a flight and keep these important tips in mind.
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