The prospect of moving abroad is a thrilling one. However, relocating is about much more than doing new things and meeting new people. The reality is that moving abroad also involves less romantic -- but extremely important -- aspects. At the top of that list? Attending to your finances. Read on for a roundup of five tips aimed at helping you keep your finances on track as an imminent expat.
1. Settle your domestic affairs.
The fantasy of just picking up and moving to a fantastic international location is alluring. However, as anyone who has had their credit card frozen because they forgot to tell the credit card company they were going traveling knows, overlooking finance-related issues before leaving can lead to frustrating problems.
Some simple yet significant things to tie up at home before leaving? Notify your bank and credit card companies of your move, canceling any subscriptions for utilities and services you will not be using while you are gone; and setting up automatic payments for expenses you will still owe while you are gone. The more thoroughly you attend to these tasks, the more carefree your new life will be. The best part? Most of this can be done online with a few taps or clicks.
2. Understand the exchange rate.
International students and travelers are often living on tight budgets. Because of this, foreign exchange rates can easily have a negative or positive impact on your spending power. Taking the time to understand how foreign exchange rates work and whether your domestic currency is weak or strong can help you use your money wisely while ensuring that you won’t run out.
3. Research the best way to transfer funds internationally.
Sure you can pay your tuition by international wire, but this can be problematic for several reasons. For starters, many banks tack on exorbitant fees meaning you will end up paying a good bit more just to move your money. And then there is the fact that international wire transfers can be slow and can even end up in the wrong place if certain key details, such as your proper name and account numbers, are not included.
Most universities have policies and instructions when it comes to paying international tuition -- many with advice sections, including university-approved wire services. Following these recommendations can help you avoid financial snafus.
Additionally, wiring tuition payments directly to the university can reduce fees, as can using Revolut, a digital bank which most of the time does not charge transfer fees, or a person-to-person service. (For more on these, check out NerdWallet’s Best Ways to Send Money Internationally report.)
Lastly, regardless of the method you use to pay, make sure to confirm precise fees and the exact date for payment arrival to avoid complications.
4. Check your credit card’s rules.
Not all credit cards are created equal when it comes to being used outside the country of origin. Before opening a new credit card, check to determine whether there are charges for international transactions.
This does not mean, however, that you are better off waiting to apply for credit in your destination country. In some places like the US, qualifying for a credit card as an international student is fraught with hurdles. Taking that risk and ending up without credit can be an immobilizing turn of events.
5. Don’t forget about taxes!
Not only do different countries have different tax rules, but filing taxes can be especially challenging while abroad. Familiarizing yourself with the tax rules of your new country can help you avoid missteps while streamlining the process.
American citizens, meanwhile, have one extra financial matter to think about when moving abroad: The US is the only developed country that requires its citizens to continue paying American taxes regardless of where they are living in the world. And this is definitely not a situation in which you want to adopt an “out of sight, out of mind” attitude! Even if you are collecting a meager graduate stipend, Uncle Sam will want his cut.
Living in a new country promises many changes. Attending to these financial priorities ahead of time can help ensure that these changes are of the positive kind.
Have you ever moved to another country to study or work? Did you encounter any unexpected or particularly difficult financial challenges? If so, please share your experiences in the comments section.
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