Keeping your finances healthy while working abroad
September 13, 2019
Working abroad is a great way to get to know yourself and a part of the world that is new to you. That said, it’s important to make a plan for how you will manage your finances while you’re in unfamiliar territory. Here are a few tips to help.
Figure out your expenses
Working abroad comes in all different shapes and sizes these days. Many companies will provide you with housing and take care of all or part of your moving expenses.
However, there are some companies that will simply offer you a job and expect you to do the rest. Other companies will even charge a fee to work with them. Thoroughly read through your contract to see what you can expect. Common expenses to consider when working abroad are:
- Passport and Visa: Passport application and execution fees total around $145. This price will go up if you need to expedite your passport. Work visa fees vary from country to country. Check with your employer for information on how much yours will cost.
- Arrival Expenses: Calculate your transport to, from and between airports. You may also need to account for layover lodging if you have layovers lasting over eight hours. Also check to see how much it will cost to check luggage and if there are any separate airport taxes you will have to pay. Lastly, budget for any temporary lodging expenses you’ll incur when you first arrive.
- Housing and Utilities: Research housing options near your place of employment to have an idea of what your monthly rent could be. Also take into account how much you will have to pay for water and electricity. You can find pretty reliable estimates for these costs on a site like Numbeo.
- Daily expenses: Budget for your meals and your transport to and from work. Keep in mind that you may have to eat out for the first week or so if you are not going directly into permanent housing.
- Travel Insurance: Make sure that you have at least minimum coverage for your time abroad in case of an accident or a medical emergency.
- Safety net: Have a bit of money put aside. A good rule of thumb is to have at least enough to fly yourself home, if need be.
- Misc: Other expenses to consider are your cell phone bill, whether you will have internet at home and any traveling you would like to do during your time abroad.
Check in with banks and creditors
Contact your current bank and creditors to let them know that you will be abroad, where and for how long. Make sure that you will have full access to your accounts while you are away and set up online banking to make it easy to check your balances.
Set up auto-bill pay so that you can assure your regular bills will be taken care of in a timely fashion while you’re abroad. Lastly, ask about foreign transactions fees so you can account for any extra charges you might incur when using your cards.
Most international employers will assist you in opening a local account to set up direct deposit payments for your salary. Check with your current bank to make sure you can send money between your two accounts and if there are fees involved.
This detail is especially important if you have billpay set up through your current bank account and need to ensure that the account has funds. You will also want to ask your international bank what procedures you will have to go through to close your account if you choose to do so once your time abroad has ended.
Assemble your accounts
Once you have contacted your current bank and creditors, you may want to look at making changes to the accounts you are currently working with. For example, if your current credit card has foreign transaction fees or doesn’t offer travel rewards, you may want to apply for a new card with no fees that offers rewards.
The same goes for your current bank. If you are working with a small local bank or one that will have high transfer fees, it might be a good idea to open a new bank account that is more friendly to international transactions.
Make sure whatever cards you are choosing to take with you are up-to-date. Trying to replace an expired card while abroad can be tricky and often unsecure. Also download any apps you can for your bank or credit cards to help keep tabs on your account. While traveling, your cell phone is often your most secure internet connection.
A few more things to consider
Now that your accounts are in order, there are a few other odds and ends that you want to keep in mind as far as your finances are concerned.
Cash and exchange rates: Having cash on hand in the local currency is a good idea in the event that you don’t have ATMs nearby or you are in a place that doesn’t accept card payments. Banks almost always offer the best exchange rate, so try to take out cash in local currency at a bank ATM instead of exchanging US dollars at an exchange shop. Exchange rates and fees will vary from bank to bank, so check rates posted near the ATM before you take out cash.
Tax status: If your foreign earned income reaches a certain threshold, you will have to pay taxes on that income. U.S. citizens living outside of the US are given an automatic two-month extension to file their taxes. The IRS offers extensive information on how to file foreign earned income on their website.
Scams: When you first arrive in a foreign country, it can often be confusing to know where to go or what services are legit. Until you get to know your area, stick with businesses that have established offices. If you are unsure about a place or a person you are dealing with, walk away. And always be careful with your wallet, passport and your personal information.
Working abroad can be an amazing experience if you do your homework beforehand. Learn as much about where you’re going before you head out, and use your employer as a resource for information and support.
Overestimate your expenses so that you can be prepared for whatever comes your way, and have an extra cushion of cash just in case. The key to a successful experience abroad is to be prepared.