Relocating overseas is easily one of the biggest transitions in life. There are too many variables, too many things to consider, and too many traps to avoid if you want your transition to be a smooth one. Being ill-prepared financially can complicate your life in more ways than you can think of. On the other hand, when the whole process is properly thought through, you can save a lot of money and have peace of mind. I’ve made many financial mistakes when relocating overseas, and today I’m sharing them with you.
The first time I moved abroad I was totally chill about it. That was a long time ago but the memory is still fresh in my mind. I made the decision to move spontaneously and didn’t have a lot of time to prepare. Most people would have freaked out, but not me. I was overly optimistic about the whole move and I strongly believed that everything would magically fall into place. I ignored the importance of doing thorough research, not only because I was in a rush but also because I was unaware of how vital it was. I eventually learned all those things, but I learned them the hard way.
A few years ago, I moved abroad again. This time, I did my research in advance. Some of the most important things to check are what documentation you need, how much things cost, local customs, where to live and work after the move.
Effective time management can prevent many financial mistakes when relocating overseas. No matter how far in the future the moving date is, it’s never too early to start preparing. Leaving your to-dos for the last minute may add unnecessary costs. Before my first move, I’d been postponing the packing for so long that I had to hire professional packers because I was too busy with other pre-moving tasks. I didn’t have the time to clean my old apartment either, so I had to pay for that too.
As previously mentioned, you should find out how much everything costs well in advance so you can start budgeting early. This is an important part of your research process. To establish a reasonable budget, you should assess your situation and consider all the expenses you will have in the upcoming period. Some of the common expenses include visas, permits, lawyer fees, and transportation costs. In addition to your regular budget, you should have an emergency fund for any unpredictable costs.
The first time I moved overseas, I had very little money saved, which added a lot of pressure. I had to find a job in a foreign country as soon as possible and I didn’t know anyone. This may sound like a powerful motivator, but having some breathing space would have been helpful. What I’m trying to say is — do not embark on this adventure unless you have enough savings to rely on until you get settled. It’s recommendable to have 3-6 months’ worth of expenses saved up, just in case.
Many expats-to-be forget about the fact that the value of their money won’t be the same in their new country. Your new cost of living may be higher or lower, depending on where you relocate. Remember to take into consideration the exchange rates when doing the financial planning for expat life. It’s a good idea to use a specialist money transfer service and compare different options for transferring money internationally.
Living in a foreign country for an extended period could impact your credit score. To avoid financial trouble, research how best to build credit in the new country, and how to keep a good credit score back home. When it comes to keeping your finances in order, seeking professional advice is what I always recommend.
Most expats send their belongings through a moving company. The earlier you book your movers, the better, as many companies offer discounts for early bookings. Waiting until the last moment to book your move may cost you more because some movers charge extra for urgent moves.
It is extremely important to do your research before hiring a moving company. I can’t stress this enough. If you hire the cheapest movers just to cut costs, you may end up paying more in the end. Consider customer feedback and ratings when doing your research and then remember that insurance and experience will have a great impact on the price in the end.
Underestimating the importance of insurance is one of the biggest financial mistakes when relocating overseas. If something happens to your possessions, you should at least get reimbursed. Therefore, make sure you choose the right insurance policy. Also, it’s a good idea to move valuable items, such as jewelry, yourself.
Packing for the big move is one of my least favorite tasks. DIY packing may turn out to be one of the biggest financial mistakes when relocating overseas unless you really know what you’re doing. It is cost-efficient but also risky. Leaving the packing to professionals will cost you more but it’s the right thing to do if you can’t afford to lose your items. I usually order quality boxes and let the pros handle the fragile stuff while I pack the rest myself to save money. Luckily, there are hundreds of online tutorials that can help you learn how to pack different items.
Finally, don’t just pack everything you own. Moving certain items is more expensive than buying new ones. The more items you bring, the more you’ll pay. So, be selective. For instance, if your destination country has a warm climate, leave your winter clothes behind.
Stephanie Carter is a writer and editor currently collaborating with U. Santini Moving and Storage. Her passion is to develop articles that help expats navigate the moving process and figure out their first steps in a foreign country. She aims to deliver practical pieces of advice backed with her personal experience and authentic sources of information that can be applied in the real world.