3 Financial Tips To Consider When Moving To a New Country
Today’s guest post is brought to you by Jacob Lunduski, a Financial Industry Analyst.
Becoming financially literate is important for so many life situations, such as considering moving abroad to start a new job.
Learning how to be responsible with money is essential now more than ever, especially considering that by the third quarter of 2017, the world debt climbed to $233 trillion (£169 trillion). Of that debt, $44 million (£31.2 million) belongs exclusively to households. Judging by these statistics, people are not doing well in this category.
Becoming financially literate is important for so many life situations, such as considering moving abroad to start a new job. The last thing you want before landing your dream job and relocating is realizing you can’t move due to debt.
A few tips to strengthen your financial education as you move:
- Planning Ahead and Researching
When thinking about relocation, you’ll need to plan where you want to go, where to work, and where to live. But a major aspect of these decisions is how much this big move will cost you and what kind of expenses you can expect in your new home abroad.
If possible, plan your move far in advance. Selecting your future location allows you to research and find out the cost of all the different living expenses.
As you research, start a monthly budget which allows you to pay for any necessities while saving for your possible move. That extra money will come in handy in case a wrench is thrown into your plans.
2. Understanding Credit & Debt
Credit cards and credit systems may vary across the globe. Make sure you research the credit system in your future destination. Also, learn how credit cards work in the country you’re planning to move to, so you don’t have any surprises upon arrival.
See if your current credit issuer charges fees for using your card in a foreign country. If they do, you’ll want to change your card or issuer so you don’t lose unnecessary money with every transaction. Depending on the area of the world you’re heading to, cards may be issued as chip-and-pin or chip-and-signature cards. Make sure you understand what card type will be issued and how to use them in your new location.
Although credit cards might be different overseas, there is one rule that stays the same: use your credit cards with discipline.
Only use your credit card for purchases you can afford to pay off in full by your statement due date. If you don’t spend responsibly, debt can start piling up from interest.
3. Understanding Exchange Rates
Understanding the fluctuations in exchange rates will make a big difference to your income as you move to a new country. For example, most recently the pound to euro rate was approximately 1.14. This means £100,000 is worth approximately €114,000. Yet in 2015 and 2016, the exchange rate was often around 1.4, which would make that £100,000 worth around €140,000.
Also be sure to talk with your bank about how your accounts will be affected. Some banks charge high fees or tax levies when you access them from abroad. You might have to look into moving your bank account to a bank in your destination country. Keep in mind that exchanging your money into the destination’s currency will be impacted by the exchange rate of that country.
Becoming financially literate is important if you’re thinking of moving to a different country. Spend time researching your destination to plan ahead and tackle any potential issues. Start a budget and savings fund for your trip to prepare for your move. Also keep in mind how credit and exchange rates work in your destination country. By following these tips, you’ll be ready to start your next chapter in life anywhere in the world.
Jacob Lunduski is a Financial Industry Analyst at Credit Card Insider. He writes about different certain financial situations and breaking news in the industry. He helps Credit Card Insider’s mission to educate readers on various financial topics. They stress the importance of building and using credit with discipline at all times.