Many expats are confronted with a new country which frequently has a very different way of delivering banking and financial services than they are used to back home. However, it is not simply their finances in the new country that need attention. Neglecting your finances back home can be just as bad for your wealth and peace of mind as not knowing how to handle your money overseas.
In short, you need to have two checklists for your personal finances – one for your home country and one for the new country.
Home Country Checklist
While you may think you will not need financial or credit services in your home country after the move, the reality is that many expats still have some financial presence back home which requires they maintain banking and financial arrangements. Many expats maintain a home which requires mortgage payments and incidental expenses to be covered while they are abroad, and this in turn raises the issue as to how to pay your bills when you may be thousands of miles away on the other side of the world.
Here is a typical checklist for your home finances for you to ensure are in place before you leave home:
• Bill payment service – many expats rely on family and friends to pay their bills, but the reality is that most of these arrangements don't work out long term, leaving the expat to face significant difficulties in meeting their obligations back home and affecting their credit status too;
• Personal checking – maintaining your banking relationship is crucial because after time spent overseas your credit rating may suffer if you have no recent track record back home. This is where established banking relationships count. It also will be useful for making payments to parties in your home country as required;
• Credit cards – many credit cards are accepted worldwide and certainly in the more common destinations for expats. Using them will generate activity and positive ratings for your credit score back home too;
• Finance agreements – maintaining finance agreements will help maintain your credit score, but you may wish to look at paying these agreements off, particularly high interest charging loans or financing for items such as cars, which you will only enjoy very rarely due to being overseas;
• Life insurance policies – you should assess your life insurance needs on a regular basis, especially in light of an overseas move; however, they should not be canceled simply because you have moved out of country. Your insurance needs are likely to increase, not diminish, and coverage may be difficult to obtain abroad or once you return home after an overseas tour; and
• Tax Authorities – you should advise your tax authority of your new status and new contact information. Many countries require you to continue filing tax returns even though you are no longer a resident, and ignoring your tax obligations because you are overseas can simply store up problems for when you return.
New Country Checklist
Moving to a new country is challenging, but fortunately there are global banking and financial products available. While there may be a developed financial market available in your new country, this is frequently not the case and in any event your needs will be quite specific, mostly revolving around a need for managing your finances in two countries.
You will need the following as a basic minimum:
• Local currency checking and savings – it is usually best to have home and local banking under the same umbrella if possible. Luckily many banks do operate on a global basis;
• Foreign exchange services – you will need this for both lump sum transactions and for smaller exchanges, such as for transferring your monies for an overseas home or currency exchange to cover an emergency;
• Credit and debit cards – while you may have credit cards from home, they may not be recognizable in your new country and this may lead to their being refused when you present them. It is usually best to hold a credit or debit card which is issued by a bank in the new country because you will have no issues with local merchants and retailers; and
• Medical coverage – while some countries do have an excellent health care system this is not the case for many countries, or non-citizens are not covered. It is essential that health costs are covered including dental for you and your family overseas.
