A large number of people are planning to shift abroad due to slow-moving job market. There are different countries which offer good lifestyle and better job market compared to one's own country and thus there is no harm in moving abroad. However, before leaving the home country, it's better to take a stock of the financial implications that it will bring.
Here are 5 financial tips which you can take into consideration before you plan to live abroad:
1. Save money: When you decide to move abroad, never underestimate the importance of saving money. It is better to save money which will last you for at least the initial 7 - 9 months after you move abroad. The amount may vary depending upon a person's family status, job, lifestyle, etc. This initial finance will actually help you build your life in abroad. In case, you get an opportunity to move abroad immediately, make sure you have funds to at least cover your immediate housing costs, emergency healthcare and repatriation expenses.
2. Plan a budget: Unless you've a proper knowledge of the cost of living abroad, you may face problems in building up your life there. Thus, you should research about the costs of housing, food, transportation, entertainment, utilities and insurance in the country where you're planning to move. You should also figure the costs of going back to the old country in case of any emergency. Depending upon that you should plan a budget. You will find expat blogs and online cost-of-living calculators which will help you in planning a budget.
3. Set up an overseas bank account: Before you move to the new country, make sure you have initiated the application process for an overseas bank account. You should make sure that you've collected all the required documents in order to open the bank account. Without a local account you may have to face financial problems while finding a house or obtaining a credit card or cashing your paycheck. However, it is a fact that you won't be able to open a bank account unless you arrive in that country.
4. Retirement savings: It is always a good idea to save money for those golden years. If your company had transferred you abroad, then negotiate with them so that you can contribute to the 401k plan though you're staying abroad. If that's not possible, then you should find alternate ways to save money for your retirement. You can establish a brokerage or a savings account especially for the purpose of retirement.
5. Tax responsibilities: Most people don't know but it is a fact that moving abroad won't free you from your tax responsibilities. Even if you file your taxes in your host country, you'll still be liable for paying taxes in the U.S. This, however, does not mean that you're double taxed. It will be a good option to discuss your situation with a qualified accountant and then move abroad.