Starting anew in an exotic place can be just the exciting change you need. Expats agree that your new salary, cost of living, and changes in standards play a pivotal role in shaping such a life-changing experience.  Handling finances in an unfamiliar environment can be intimidating. These seven tips will help you avoid common pitfalls and set you up for financial success in your new home.

1.      Keep, but don’t depend on your current bank account

Getting a local bank account is the first step to streamlining your finances, yet many expats overlook it. Such an account makes dealing with the local currency easier, especially if that’s how you’re getting paid. There are no predatory exchange rates to worry over, and using ATMs doesn’t incur fees.

At the same time, you don’t want to cut yourself off from banking services at home. It makes sense to hold on to your account if you have property or financial obligations in your country of origin. You’ll want to keep some of your savings domestic, especially if you’re moving to a developing country with uncertain monetary protections.

2.      Consider the impact of exchange rates

You’ll likely want to regularly transfer money to your old account or send it to relatives at home. That means you’ll have to deal with fluctuating exchange rates and fees banks or payment processors charge on top of them. It’s prudent to look into which offers the most favorable rates.

Research how volatile and regulated the local currency is before moving. Places like Switzerland, the EU, and Singapore have robust financial markets and checks & balances that keep their currency from fluctuating wildly and unpredictably. Some parts of the world lack these safeguards.

3.      Invest in expat or international life insurance

Depending on your new home, a medical emergency can range from an unpleasant memory to an event that can cripple your finances. In some places, doctors and hospitals will charge foreigners more for their services.

Expat insurance might seem like an unnecessary expense, but you’ll be glad you paid into it if things get serious. International insurance is a good option if you’re living the digital nomad lifestyle or moving to a country with underdeveloped medical services. You might need transportation to another country in case of the latter, which international insurance covers.

4.      Be aware of your tax obligations

Giving broad tax advice is tricky since each country has its own tax laws. Generally, you’re subject to local tax regulations and should study them before moving abroad. You’ll also want to look into countries that have signed double tax avoidance treaties so you don’t have to pay even more.

Keep in mind that you might also have tax obligations at home, such as property, interest, or investment tax. Consult professionals in both countries to ensure you have a clear understanding of your obligations.

5.      Keep your personal information safe

Relocating comes with a lot of paperwork and new personal information like ID cards and banking details to keep track of. It’s easy to forget about safeguarding that info in such hectic times, especially if you have to use it frequently while you’re settling in.

That’s why you’ll want to make a data protection plan before moving. Assess all your accounts, financial or otherwise, and terminate those you won’t need at your new place of residence. Take stock of any sensitive data on your smartphone and tablet and consider moving it to encrypted storage.

You’ll also want to assess how secure your passwords are and create new ones if necessary. A password manager will help with this since it replaces weak and similar passwords that offer hardly any security with complex and unique ones.

6.      Get a budgeting app

Budgeting is hard enough without having to deal with multiple currencies. That added step makes budgeting apps that support real-time exchange rates a boon. They’ll help you track savings & expenses as well as offer a comprehensive overview of all your finances in one place.

7.      Be wary of fraud

Foreigners who want to invest or retire abroad are prime targets for fraud. This ranges from transparent and obviously fake Nigerian prince-type scams to sophisticated attempts at ridding you of your hard-earned money. Pay special attention to the most common types of scams, both on Main Street and when you’re looking to buy property or invest.

Conclusion

The change of scenery and lifestyle moving abroad brings can have a profound positive impact on your well-being. Stable and secure finances play a crucial role in making the transition painless. Approach your finances with forethought and improve your new life’s outlook.