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Protecting your financial freedom as a relocating expat
| Published: | 26 Dec at 6 PM |
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Expats on relocation or reassignment may well be the brightest and best as regards their jobs, but money management is another matter.
yourself in a strange city along with a career boost and salary you’ve long dreamed about can be an exciting experience, but if you’re financially illiterate the glow soon wears off. Expats must make many changes in order to achieve success in their chosen sectors, but many find their money-related habits very hard to adjust. Our spending is subconsciously controlled by our behavioural patterns and can easily get out of control, especially in challenging situations such as emigration. Overspending is very easy if you’ve not made a financial plan, however much money you’re now earning in your new job.
Daily and monthly expenses need to be itemised and controlled, and spending more than the monthly pay check is a route to debt and disaster. Paying for everything with your credit cards is likely to end in tears if a budget isn’t established, and it’s the number one way to end up owing more than you’ve earned. Breaking the habit by paying cash taken from a monthly budget for everything you need may be tough, but it works as a way to keep you debt-free.
Another way to save money and make sure you’re not overspending is to examine your loyalty to certain brands. Once you’re outside your home country, those brands may well cost twice as much as they do at home, mostly due to customs duties. Obviously, medicines and suchlike don’t count, but for everyday needs you’ll find the local products are the same and a good deal cheaper. Detaching yourself from brand loyalty in your new life helps you adjust as well as saving money.
One necessity you’ll not be able to exactly replicate is home and car insurance, probably because your usual insurer doesn’t cover your present location or the rules are different in your new country of residence. Requirements for car insurance vary across the world, as do house insurance policies linked to prevalent weather conditions. Attempting to save money by underinsuring or not insuring is unwise, especially if there’s a risk of typhoon or flood damage or your chosen country is top of the list for locals’ appalling lack of driving skills.
Once you’re spending less, you’ll find you can save more, but it pays to be careful about how you save. The majority of expat destinations are stacked with friendly expat financial advisors eager to sell you the latest product guaranteed to double your money. If you’re tempted to invest, the key is to disbelieve anything you can’t verify by personal or online research, as many thousands of newly-arrived expats have fallen for so-called investments and lost their entire nest-eggs as a result. The way to go nowadays is to rent a bank deposit box, buy a safe or simply keep your cash savings where no-one can find them. Losing a few years’ interest may be painful, but losing the lot is far worse.
yourself in a strange city along with a career boost and salary you’ve long dreamed about can be an exciting experience, but if you’re financially illiterate the glow soon wears off. Expats must make many changes in order to achieve success in their chosen sectors, but many find their money-related habits very hard to adjust. Our spending is subconsciously controlled by our behavioural patterns and can easily get out of control, especially in challenging situations such as emigration. Overspending is very easy if you’ve not made a financial plan, however much money you’re now earning in your new job.
Daily and monthly expenses need to be itemised and controlled, and spending more than the monthly pay check is a route to debt and disaster. Paying for everything with your credit cards is likely to end in tears if a budget isn’t established, and it’s the number one way to end up owing more than you’ve earned. Breaking the habit by paying cash taken from a monthly budget for everything you need may be tough, but it works as a way to keep you debt-free.
Another way to save money and make sure you’re not overspending is to examine your loyalty to certain brands. Once you’re outside your home country, those brands may well cost twice as much as they do at home, mostly due to customs duties. Obviously, medicines and suchlike don’t count, but for everyday needs you’ll find the local products are the same and a good deal cheaper. Detaching yourself from brand loyalty in your new life helps you adjust as well as saving money.
One necessity you’ll not be able to exactly replicate is home and car insurance, probably because your usual insurer doesn’t cover your present location or the rules are different in your new country of residence. Requirements for car insurance vary across the world, as do house insurance policies linked to prevalent weather conditions. Attempting to save money by underinsuring or not insuring is unwise, especially if there’s a risk of typhoon or flood damage or your chosen country is top of the list for locals’ appalling lack of driving skills.
Once you’re spending less, you’ll find you can save more, but it pays to be careful about how you save. The majority of expat destinations are stacked with friendly expat financial advisors eager to sell you the latest product guaranteed to double your money. If you’re tempted to invest, the key is to disbelieve anything you can’t verify by personal or online research, as many thousands of newly-arrived expats have fallen for so-called investments and lost their entire nest-eggs as a result. The way to go nowadays is to rent a bank deposit box, buy a safe or simply keep your cash savings where no-one can find them. Losing a few years’ interest may be painful, but losing the lot is far worse.
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