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Save money as an expat

May 4th, 2016 at 01:42 am

My newest blog posts is my top 5 Tips on How to Save Money as an Expat.

When living abroad as an expat, it is very easy for the cost of living to have unexpected expenses that you did not plan for. The key in mitigating this risk is to be frugal with your money so that you have the opportunity to enjoy every aspect that your new locale has to offer. Here are five tips on how to save money as an expat:

Use a Local Agent to Find Your Housing:

When moving to a new city, it is wise to not lease your apartment right away. The reason for this is that in many countries there is an underground real estate market that can only be accessed upon arrival. Thus, it is wise to get to the city, explore the neighborhoods by renting an Airbnb or Booking.com hotel in one week increments, and then make local contacts. If you do this, you will avoid apartments that are targeted at wealthy expats and find something that is not only nicer, but also a better value for your money. This will allow you to save more money while you are living abroad.

Take Out Cash in Larger Amounts: If you are planning on staying in your new city for an extended amount of time and you have the proper visa, you will likely be opening a local bank account. That being said, while you are using your bank account from you home country, it is highly recommended to take cash out in large amounts and less frequently. The reason for this is that you will pay less in international transaction fees in the long run.

Open a Local Bank Account: Opening a local bank account is a very good idea. The key to this is that if the country has bank cards that allow you to travel to foreign countries. Be sure to check on this so that your salary is not stuck in the country that you are currently living in. If you do this, you can decide when to send your money home and can also save a great deal of money on currency conversion and ATM fees.

Wire Money Home Less Frequently: One of the main expenses of expats is to wire their salary home. What I recommend to combat this is to not wire more than five times per year. If you do have expenses in your home country, such as credit card minimums, then either freelance to cover those or leave enough money in your home bank account to cover those expenses until your next wire. If you do this, you can save on the $40 banking fee per wire transaction that can really add up over time.
Set Aside a Piece of Your Salary for Savings: The other aspect of living abroad is the gift of getting financially ahead. Many people just live life to the fullest abroad and do not save.

This is a critical error because, if you play your cards correctly, you can come home and be in an entirely different economic situation than before. It is recommended to save at least 30% of your salary each month so that you will have wonderful financial surprise when you return home for your retirement.

Being an expat surely has its benefits. The key is to navigate the financial sector of your experience with care and you will not only have a great life altering experience, but you will also return home financially ahead.

2 Responses to “Save money as an expat”

  1. Buendia Says:

    Great advice for expats!!!

    For us, TransferWise has turned out to be completely awesome for sending money between our banks (in two separate countries)! They only charge 2 euro per transaction and the exchange rate is great! Have you ever used them to move money around?

    One other thing (because this just happened to a friend of mine who is now in big trouble): if you are a US citizen you need to file a tax return even if you don't earn money in the US. My friend lives in the UK and makes no money in the US, so she just assumed she didn't need to file returns... now it's been 6 years and she's begging forgiveness and back-filing.

    Also - there is a thing in the US called FBAR - if you have an account in another country that at any time during the year goes over $10k, you need to file FBAR that year! The fine is terrible if you don't file.

  2. Fran├žois Says:

    Hey Matt,

    thanks for the insights. What about International Money Transfers? It's a huge topics for expats. Opening a bank account is not enough, if your bank is ripping you off with bad exchange rates. www.monito.com is maybe a tool that could be of use to the readers of this blog, it's a comparison site for money transfer services.

    Cheers, Fran├žois

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