This is the second part of my two part mini-series on preparing your financial life to go abroad. On Wednesday, we looked at preparing for a vacation abroad. Today, we’ll take it a step further and discuss how to prepare your accounts for a permanent move abroad.
I moved out of the country a little over a month ago and recommend simplifying your financial records as much as possible. If you’re planning on moving abroad, you’ve more than likely put some thought into it and prepared, but concerns and tasks continue to creep up until departure day. The first month living in a new country is also a hectic time and knowing your financial life is doing fine back home, is a huge weight off your shoulders.
Let’s take a look at the steps to take before departure.
Leaving the Country in a Month
Just because you are moving abroad, doesn’t mean you need to wipe your American financial accounts clean. I could be abroad up to five years, but my accounts in America are, and will continue to be active. Many people have loans they still need to pay, so having access to your money in America is important. Here are the accounts you need:
-Checking Account
Open up a free checking account at your local bank. Inform the bank that you’d like a parent or relative to have access to this account so they can deposit any checks or cash that comes your way while you’re overseas. This account should also come with a debit card for access to your money overseas, if needed.
Find a bank that offers free online bill pay with the checking account. This will be a savior when you have to send money to your sister for her birthday or pay off your student loans. From your new residence, you can sign on to your bank’s website, and send a check within the U.S for free. This is incredibly convenient because you don’t have to worry about transfers or exchange rates as you’ll just be using your U.S. checking account to write the check.
You can also set up automatic payments for bills that arrive every month. Just tell your bank when, who, and how much and they can send a check every month at that time. This makes paying your student loans easy as you can just set it and forget about it.
But make sure to keep enough money in this account. You don’t want to have to deal with overdraft fees when you’re living it up in New Zealand.
You can also get more specific with this account if you’d like. Certain debit cards are great for people living abroad and offer better rates. If you’re going to be frequently accessing your cash through ATM, this may be the best option for you. However, if you’re going to have an income and a foreign bank account, the debit card choice isn’t vital, and a simple card from an American bank will do.
-Savings Account
Keep one with an online bank so you can keep racking up interest while you’re gone. Link this account to your checking account so you can gain interest on your money, but still be able to quickly transfer money to your checking if needed.
-Credit Card(s)
Just like with a vacation, having the proper credit cards in your wallet is key. Research the country you’ll soon be calling home and find out their stance on plastic money. Many countries don’t use credit the way Americans do, and knowing this before you go searching for the ATM in Pakistan will be worth your time.
Find a card with the lowest foreign transactions fees possible – preferably 0%. If you’ll have some sort of income when abroad, you should never really need to use this card. Keep it in your wallet for emergencies so you don’t have to drain your bank account. However, if you won’t have an income and are just taking a year or two off, low transaction fees will be a must for you.
Having two or three credit cards abroad is a good idea in case a card gets denied. Remember to inform the credit card company of your travel plans, and you’ll hopefully avoid this problem.
Credit cards are also great to have for online purchases. Amazon is in most countries, and you may want to buy Christmas or birthday presents online and ship them to someone at home. Having a credit card available will make this process easy and you’ll be glad you decided to bring one along.
Credit cards also help in weird situations. In Japan, my phone company required me to use my credit card for the first payment for my cell phone. If I didn’t have a credit card, I would have been without a phone, which would have been a problem because I’m a fifteen minute car ride away from any peers.
-Brokerage Accounts
Keep these as is. Not much should change when you’re abroad, and depending on how you invest, having access to this account is valuable. You can also connect this account to your checking account for easy access to funds.
Leaving the Country in a Week
Depending on your situation, having a couple weeks worth of foreign currency on you is a good idea. Like preparing for a vacation abroad, find a big bank that has access to foreign currency and exchange it there. Avoid the airport at all means as you will get ripped off by their rates.
If you won’t be receiving any income for a while, plan to take a month’s worth of money, or be able to access money through ATM when you’re abroad. Your bank should be able to inform you of the exact locations of ATMs in the country you’re moving to.
Hey, You’re Abroad!
-Open a bank account Some will offer you an account with a valid passport and a U.S. I.D. while others will require you to have an identification card issued by your new home country.
-Find the local ATM so you can access your money from home.
-That’s it!
The decision to move abroad is one of the most exciting you will make in your life. It will bring about new changes you never though possible. Now that you know your financial accounts are safe and ready to go, you can truly settle in and start your adventure. Have the time of your life!
Read part 1: Vacation Abroad? – Prepare Your Financial Accounts for Stress-Free Living
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