Most of us prefer to budget carefully these days rather than spend, spend, spend like so many people did before 2008, when the word economy took a nosedive. But what about when you move abroad? The chances are it will be just as important to stick to a fixed budget in your new home country, at least at first while you get used to things. So what are the pitfalls? And how can you make the most of your hard-earned cash? I thought it would be useful to look at ways to make sure you don’t overspend in your new expat life.
Is it best to translate… or not?
For a start, it’s a good idea to decide up front how you are going to treat the new currency you’ll be using. Some people find it easier to keep tabs on how much everything costs by constantly translating prices back into the currency they’re familiar with. Doing it this way can make it easier to make informed judgements about whether or not something is good value for money or far too expensive. On the other hand prices in your new country can be so radically different that translating back isn’t much help, and can even be a hindrance. If so, it might be better to learn to think fluently in your new currency as soon as possible, especially if your earnings will be either much more or much less than you’re used to.
Preparing yourself in advance
Ideally you’ll do your homework before you move, making yourself familiar with what to expect so you avoid unexpected shocks. Next time you go shopping in your home country think in the currency you’ll be using when you move to help you improve your overall familiarity. Doing so should make it easier to deal with the transition smoothly when you eventually take the plunge.
Replacing expensive goods with local alternatives
You might find that the usual goods on your shopping list aren’t always available in your new country, or if they are they come at a premium price because they’re imported specially in small quantities. There are often local alternatives, so track them down and train your taste buds to appreciate local products from the offset.
As a general rule, when you know exactly what to expect it’s easier to stay within budget. One sure-fire way to make sure you don’t over-spend is to create a budget Master List before you go.
If you are moving to a hotter country remember that instead of heating, you will probably need to pay for air conditioning. Find out how much it costs before you go and add a reasonable monthly amount to your list. What about rent? You might find renting is much cheaper than in your home country, but food costs much more. Or the other way round. Take every expense into account and build up an accurate, comprehensive picture.
Getting familiar with your new taxation landscape
What about your income? You can bet your bottom dollar that the country you are moving to will have its own unique taxation system, and you need to be aware of what you’ll owe before you go. Find out and factor it into your Master List. Make sure you take into account all the taxes, duties and fees you’ll be liable for up front so you don’t end up getting a nasty surprise.
Including travel and communications costs
Identify how much it’ll cost to travel between your new home and your original home country as well as any work-related commuting you need to do. And check out the costs of broadband, telephone connection etcetera to factor into your Master List.
Expat healthcare and insurance
If you’re moving to a country whose healthcare system isn’t as comprehensive as the country you are leaving, health insurance is probably your best bet for peace of mind and financial security. Find out how much it’ll cost you before you leave and make sure everything is in place beforehand. The same goes for things like home and car insurance – find out whether it’s best to insure in your new home country and if so, though whom.
Buying a home
If you want to buy a home in your new country, bear in mind it may not be as straightforward as it is in your country of origin. On the other hand it might be a great deal simpler at first glance. But before you make any kind of decision, it’s essential to research the housing market and make sure you are 100% familiar with the way things work. That way you will be less likely to end up in a difficult situation because of legal oddities regarding property titles, legal representation, weird and wonderful local rules, regulations and caveats plus unscrupulous operators. If you can find a reliable real estate agent who speaks your mother tongue the process should be much easier. It’s also wise to contact your local expat community for support and advice before trying to buy.
Keeping your savings safe
Banks in your home country will probably offer expat savings accounts, and you might feel most secure stashing your savings in the country of your origin. But there might be advantages to saving in your new home country or offshore somewhere completely different. Again, it’s best to do the research before you go, consulting a trustworthy financial adviser who speaks your language rather than trying to struggle through the process after you have moved.
Enjoy our in-depth expat country guides
For more information about making a success of your move abroad, you can download our free eBook, The New Expat, which covers medical considerations, family matters, accommodation issues, financial arrangements and plenty more to make your expat life easier.
We also produce useful Country Guides each month, packed with country-specific information to help you make the most of your new home. Recent releases include Norway, Mexico and Luxembourg.
Do you have any tips?
Have you any great tips to help our readers budget effectively in their new home country? If so, we’d love to share them. Please feel free to leave a comment below or connect with us on @now_health on Twitter or on the Now Health Facebook page.
ImageSource: Philip Taylor PT