Whether you’re deciding to move or even retire overseas, you still need to have your financial situation in check. More often than not, expats tend to excitedly plan for everything when it comes to relocating overseas except for what’s truly important: getting their finances sorted.

Naturally, we wouldn’t want that to be the case for you as well, so if you want to avoid falling victim to being ill-prepared financially when you move abroad, check this article. We will tackle the most important points you should prioritize but also mention a couple of financial aspects worth remembering as you embark on a new journey.

Setting up a budget taken out of your fantasies

We get the whole excitement that comes with such a decision, especially when it comes to relocating to the other side of the ocean. However, watch out for getting caught up in extravagant spending. Before you even go on and make the big move, you have to establish a reasonable budget.

As you are getting settled, you might notice you have more expenses than usual, like permits, visas, lawyer fees, and transportation costs. You should evaluate your unique situation and establish what expenses you will need during the first few weeks in your new country.

Before your relocation, you should also establish an emergency fund, besides the regular budget. This way, you can plan for unpredictable circumstances and try to minimize any financial stress.

Failing to factor in exchange rates

Depending on the country of origin and the final destination you’ve chosen, your new cost of living could potentially increase or decrease. In both cases, the value of your money will change for better or for worse.

When you are carefully planning step one, make sure you also include exchange rates in those plans. You can easily accomplish this by using a dedicated money transfer service, and you can also compare different options for sending money overseas.

This particular type of service is perfect if you want to transfer money internationally. You won’t even have to go through your bank to get your funds to where you want them to be. Specialist money transfer services will do all the work for you.

They make sure their rates are competitive enough and also let you receive the most beneficial exchange rates. When you search for the right specialist money transfer service, you should do some research on the company and decide it deliver adequate security, transfer speed, and user experience.

Only filing taxes in your new country

One huge downside to moving abroad is the overall complexity of filing taxes. Now, everyone has their own reasons, which could imply both evasion or simply ignorance, but one thing’s for sure: expats often make the mistake of only filing taxes in their new country.

However, you should always abide by the tax regulations of your new country and former residence. We strongly advise you to discuss this with a trusted tax expert.

Closing your credit card accounts at once before you move

You should have enough notice time before you relocate, which gives you more than enough time to get your financial issues in order. Sometimes, a huge job promotion or other life events make it too difficult to leave room for adequate planning.

Closing the much-needed credit card accounts is yet another essential part of relocating. If you have more than enough time before your big move, we strongly recommend closing your credit card accounts over a prolonged period of time. Don’t close them all at once. Doing so might damage your credit score and make it too difficult to repair.

For those credit cards that you decide to keep open, you should give your credit card issuer a heads-up before relocating. This way, they won’t think there’s any suspicious activity and suspend your card for the time being, which can definitely hinder your spending as soon as you establish yourself in the new location.

Not knowing how to handle your retirement pensions

If you are retired and you plan on moving to a foreign country, you will only be capable of enjoying your experience if you have the financial situation squared away. Since you won’t be earning income in the traditional sense, you will probably rely on retirement pensions.

The majority of people have two different types of retirement pensions: an employer (or even a private) pension and a state pension. You definitely don’t want to lose access to those retirement pensions when you decide to move abroad.

We’d also advise you to make sure you understand how moving abroad might affect your regular income distribution in retirement. A couple of useful solutions for retirement pension distribution also include:

• moving your pension to your retirement country and investing in a brand-new pension plan
• leaving the pension in your home country and having constant payments transferred to a new bank account

Also, make sure you’re aware of specific limitations that might apply. For instance, if you’re moving from the United States, your social security payments won’t be distributed if you choose to relocate to countries like Ukraine, Georgia, and Cuba.

Educating yourself on such impactful limitations might help you plan for your retirement in a different area more efficiently.

Failing to secure health insurance

Health insurance is definitely a very important financial factor that you need to get squared away before you move abroad. Expatriate medical insurance plans, for instance, are mainly based on these characteristics implying the policyholder:

• medical history
• country of origin
• country of coverage
• age

All these factors will efficiently establish your premium, so you need to make sure how they relate to you. Also, try to request quotes from various companies and make sure you’re aware of each plan’s limitations.

While some plans will pack worldwide coverage, which is definitely great if you plan on traveling a lot as an expat, other health insurance policies will try to set separate pricing for some regions. They will also refuse to serve those living in specific high-risk areas.

You should allow yourself plenty of time to find the best possible deal. What you’re looking for is a plan that gives you enough coverage based on your age and medical needs. Don’t ignore it: the last thing you’d want is to find yourself in a medical emergency completely uninsured because you simply neglected a beneficial health insurance plan that meets your needs.

Also, don’t forget that living a healthy life overseas implies way more than just finding proper health insurance.

Neglecting to research inheritance laws

This mistake is quite different than any other, but nevertheless, it can place your family in quite a difficult financial situation. The best thing you can do is research your country’s inheritance laws before deciding to move. Some countries have quite reasonable estate and inheritance taxes, while others such as South Korea and Japan have a 50% or higher inheritance tax rate.

On the other hand, there are also countries like Mexico, Norway, and Sweden, with a 0% inheritance tax rate. If you want to receive any kind of inheritance, you can go about it in a more smart and financially efficient way: donate some of the money you own to charity, minimize retirement account distributions, and place all your money into a trust.

Middle Eastern countries generally have inheritance laws that can be very difficult to navigate. In the majority of cases, couples decide to pass their inheritance on to the surviving spouse.

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