5 Money Questions to Ask Before Moving Abroad

Rina Diane Caballar

Whether you’re planning a gap year abroad or shaking off the shackles of your home country for good, moving to a far-off land is no easy feat, especially when it comes to money matters. I should know. After a decade in the Philippines’ chaotic capital, Manila, my husband and I took the plunge and migrated to Wellington, New Zealand, a city with a better quality of life and a place where we could see ourselves raising a family.

It seems we’re not alone in our desire to move abroad. In 2017, 66.2 million expats were voluntarily living in a country other than their birth country, making up roughly 26 percent of all immigrants worldwide, according to Finaccord, a research firm located in the United Kingdom.

But before going on that adventure, you have to prepare yourself financially. And that means asking all the hard money questions—and being honest with yourself.

What is the cost of living in your target country?

To make your dream a reality, you need to know how much it costs to live in the foreign destination of your choosing. Websites like Numbeo and Expatistan can help you gauge living expenses in other countries and compare the cost of living among cities around the globe. The Economist also produces a biannual Worldwide Cost of Living Survey that compares prices of products and services.

You should take note of exchange rates and any history of currency devaluation, an economic practice in which a country drops the value of its own currency.

“Understanding how currency devaluation works is critical, and it can make or break your budget,” says Annalisa Nash Fernandez, an intercultural strategist with a background in international finance who has lived, worked, and studied in nine countries. Currency devaluation generally decreases the cost of a country’s exports while raising the cost of imports. This can lead to inflation and potentially a decline in wage growth as prices rise. Keep an eye on exchange rates and economic news coming out of your home country, especially if you’re working on a tight budget or planning to live on savings.

And if you want to gauge what may happen once you’re relocated, looking at the past can help clue you in. “Plan in advance for currency swings and calculate your estimated expenses abroad not only with today’s exchange rate, but also with the exchange rate from a year or five years ago to see what the future may hold,” says Fernandez.

How much will it cost to relocate?

Moving anywhere is pretty expensive, and while those costs may be offset by a cheaper cost of living once you arrive, you don’t want to blow your budget just getting there. Factor in visa expenses, airfare, and temporary accommodation during the first few months of your stay.

Those costs can vary greatly depending on where you’re relocating, the real estate market, and what time of year you’re moving. For example, my husband and I paid application fees and a migration levy to relocate to New Zealand (currently around $233 for U.S. citizens seeking a permanent resident status). Check your target country’s official immigration website to find visa costs.

We decided to move during the off-season so airfare would be cheaper. Much of Europe’s low season is during the cold and snowy months of January and February, while October and November are off-peak months in the Southern Hemisphere. Weather, school vacations, and major holidays like Christmas and Easter can also affect airline ticket prices.

Additionally, we looked for a place to stay months before our move. Once we found somewhere affordable, we paid for it in advance, so we’d already be covered for our first month. But be careful when prepaying for a rental remotely; online booking scams are everywhere. To keep your money safe, verify the booking website’s URL and book directly instead of through a third party. And when making a payment overseas, the Federal Trade Commission recommends paying with a credit card for the added fraud protection.

The little things also matter. Mailing costs for visa documents, checked luggage fees, and weather-appropriate clothes can add up quickly, so make sure they’re covered in your relocation budget.

How will you pay for your life abroad?

Having a job waiting for you in another country can ease your moving worries. Hana LaRock, 26, a writer and online English teacher, moved to Korea with her boyfriend after graduating college in 2013. “We had very little money, but we were moving for a job, so we knew we’d be secure,” she says.

If you haven’t lined up work, get a feel for what the job market is like in your target country. Learn more about the state of the industry you’d like to work in and check for jobs in that sector. You should also consider what other jobs you’re willing to take, including short-term or contract work, in case you can’t get a job in your industry right away.

For instance, my husband and I decided to take the risk and look for jobs once we arrived. We did some research beforehand and scoped out the market, checking if job prospects were good in the journalism and IT industries. We scoured New Zealand job search sites, read news reports about the economy, and joined expat groups on Facebook to ask job search questions. I was freelancing before our move, so we also had some income to rely on while searching for jobs.

Start saving now

If you haven’t nailed down work before you take off, saving as much as possible in the months before your move can help cushion your adjustment period. LaRock has tried major moves both ways. “When we moved to Mexico last year, we had a lot more savings and we were also working online, so money wasn’t an issue,” she says. For LaRock, saving up a sizable chunk of change in advance made the first few, and often most difficult months, easier. “We were able to get settled into our new apartment easily, having enough to pay for our security deposit, first month’s rent, and the things we needed to buy for our new home,” she says.

Experts recommend having at least six months’ worth of savings (adjusted to the cost of living in your new country) to get you through the job search period. But that isn’t always realistic—and that might be OK. My husband and I had around three months’ worth of savings when we moved. He found a job six weeks after we arrived, and we ended up using only a month’s worth of funds for our daily needs. I also had money coming in from my remote freelance gigs, so we had something to supplement our savings.

What will your financial setup look like in your target country?

Don’t forget to nail down your bank accounts, taxes, and insurance.

Since most banking is online these days, you may be able to stick with your current bank, but call ahead before you start swiping from 3,000 miles away. “We continued to use our bank cards [from home] to withdraw money and pay bills, but we made sure our banks knew we were moving [to South Africa] so they didn’t block us as soon as we tried to withdraw money abroad,” says Clara Wiggins, a freelance writer and author of The Expat Partner’s Survival Guide.

If you’re living it up on a gap year, staying with your current bank and skipping the paperwork hassle might make sense. More permanent plans may require taking the plunge into the local banking system. “We realized that we would need to open a local account just to make life easier, as the longer we lived there, the more integrated we became and the more we needed to make local payments,” says Wiggins.

Check out the banks in advance to ease your transition. Many banks can set up an account for you even before you arrive, so you’ll have one less thing to worry about.

Taxes are another essential component of your financial setup. Learn about the tax system in your target country, including how to get a tax number, what the tax rates are, and how to file. Health insurance is also critical, and odds are good your health insurance won’t travel if you’re relocating for good. So do your research on plans and providers as well as government subsidies you might be eligible for, if any. If you’re not finding much help online, you might consult an immigration specialist in your country for tips on navigating the health care market.

Moving abroad can be daunting, but enough planning and preparation can smooth out the transition. “It’s important to look into money matters a long time before you move so you have sufficient time to get it all sorted out,” Wiggins says. Once you’ve set yourself up financially, you can enjoy the rest of the move and embark on your next adventure.