Living abroad: the key steps for managing your finances
Living an international lifestyle creates a whole world of new opportunities. Enhanced career prospects or better pay and benefits are among the main reasons for moving abroad.
But new opportunities don’t come without challenges. Embracing your freedom to live abroad or across borders could make it harder to plan a path towards financial freedom.
While your language skills and cultural norms may inevitably become caught between places, personal finance is one area you can keep control of. The Local, in partnership with Barclays International Banking, presents the key steps to building a more secure future – no matter where you call home.
Digital banking: track your day-to-day outgoings
From same-day deliveries to social media, we live in an age of instant gratification. But when it comes to money, it makes sense to plan for the future.
You can start by ensuring you have a complete view of your finances right now. That may be easier said than done, however, if you use multiple accounts and cards issued in different countries.
Doing all your digital banking in one place could help you better understand your outgoings. If the cost of living in your new location is high, you want to avoid the trap of splurging all your income. If it’s lower than you’re used to, you could make that count by setting some of your salary aside in a savings or investment account.
Currency exchange: be flexible, move fast
You don’t have to be a forex trader to win or lose big on currency fluctuations. If you’re planning a life abroad, the question of how and when to transfer money deserves some serious thought.
This is especially true if transferring large sums because, for instance, you want to buy a property or perhaps close a savings account. Even with smaller transfers, you can make the money work for you by thinking ahead and being flexible about when you trade.
You may want to set an alert for your target exchange rate in a foreign exchange app so you don't miss a favourable market movement. Knowing exactly how you’ll make a transfer is also crucial. Barclays International Banking's foreign exchange service allows you to trade in multiple currencies – with rates that get better, the more you convert.
Savings & Investments: select your strategy
Living internationally requires you to grow as a person. But what if negotiating culture shock and red tape deprives you of the mental energy needed to grow your savings?
Try not to get overwhelmed by having money in more than one country. Think about what matters to you and select a strategy to match your goals.
Start simple: for instance, save a fixed percentage of your income each month – and use automated transfers so it’s done before you can spend it!
If you’re investing, consider the risk-reward ratio and pick a strategy. Maximising long-term growth to fund an early retirement is very different from seeking safe, regular returns to support you and your family as you set up a new business.
Property & Family: trust matters
Few decisions shape your life more than buying a home. If you’re discussing your future with a partner, you need to plan ahead wherever possible. Your dream home won’t come cheap. Nor will any kids!
In many countries, you still have the chance of securing a mortgage with a fixed, long-term low interest rate. But if you’re new to a place, take time to understand the local conditions – asking a few locals what they consider to be a good deal might offer valuable insights.
If your thoughts are turning to your legacy, you may want to take professional advice on estate planning and local inheritance laws. Trust is key when it comes to the more personal aspects of personal finance.
Tax & Pensions: pay attention not penalties
As an international resident, you’ve almost certainly attracted the attention of more than one tax authority. So, make sure you know exactly where you’re liable to pay tax.
If you’re an employee abroad, the hard work may be done for you with tax deducted from your salary each month. But if you’re self-employed, plan for the tax bills to come – and how they’ll differ from what you’d pay in your home country.
Some workers, such as cross-border commuters or those on temporary postings, could be at risk of double taxation. Check any rules you’re not sure of with the relevant tax authority to avoid waking up at 3am in a cold sweat.
You may also want to check the legal retirement age in your adopted country. Want to consolidate your pension? Look into official transfer schemes, such as the qualifying recognised overseas pension scheme (QROPS) for people who want to move UK savings abroad.
Barclays has been managing clients’ money for more than 330 years and has regional expertise across the globe. Click here to find out how Barclays International Banking can help you move towards all your financial goals, wherever life takes you.
This content was paid for by an advertiser and produced by The Local's Creative Studio.