Being an expat comes with a wide range of financial and emotional challenges. If you want to live your life to the fullest, there are certain mistakes you must avoid. Whether it is not notifying the bank of your plans, choosing an unfavorable exchange rate, or forgetting to service the debts in your home country, you have to stay frugal with your finances. In this article, we will be discussing such mistakes that you have to avoid while living abroad:
- Forgetting about debts in your home country
Just because you have moved to a new country, it doesn’t mean that you have left your debts behind. Whether it’s your mortgage, taxes or student loans, you need to figure out a strategy that helps you manage your overseas payments and debts, regardless of what your destination is. A possible solution is setting up recurring payments through global money transfer so that you don’t miss out on any payments.
- Not notifying your bank about your move
If you are planning to move abroad, you have to let authorities know. This includes notifying the bank and registering the plans through a government website. You have to be proactive and tell authorities about your travel plan to ensure that all things are handled smoothly. Failure to do so might lead to your account getting unexpectedly frozen or cancelled because of “suspicious” activity in a different country.
- Stop paying just the minimum
When you are moving abroad, you have to say goodbye to your basic money management skills and be a bit more savvy with your finances. With your credit card debt, you are only required to pay a minimum amount to avoid late fees. However, since the required amount is only 2 to 3% of the balance, 98% of the debt still grows with interest. Instead, you should always try to pay the balance in full or at least whatever you can. By clearing your entire balance, you can avoid interest costs.
If you are an expat or a business owner who needs to handle overseas finances, it is crucial that you understand the involved costs and create a budget accordingly. In order to ensure that you avoid making a mistake that could cost you a lot of money in the long-run, what you can do is hire a wealth management advisor who will ensure that your finances are properly handled. There are several wealth management companies that can offer you consultancy services and help you manage your finances.