So, you’re moving to a new country?
That’s great news! I’ve been an expat in three different countries now and, after three and a half years of travel, I’ve learned a few things.
Moving to a new country can be hard. There are massive cultural differences and simply re-acclimating yourself can prove to be difficult. And money, of course, can be a major stress point when moving abroad. What used to be so easy in your home country no longer proves to be quite as simple.
Earning money, spending it, moving it, and managing it becomes an entirely different experience than you’re used to. No matter where you go, things just won’t be the same as they are back home.
I think learning about the local tax laws is important before you move to a place. Some people have no idea, for example, of just how costly it is to live in Europe.
That’s a great point. In Asia, foreigners don’t appear to get taxed. Go to a place like Europe, though, and unknowing expats will be very unpleasantly surprised!
Great tips! I have seen you write about the Charles Schwab High Yield Investor Checking account before. It definitely helps us out here in Thailand. We still haven’t opened up a local account yet…we probably should as good emergency backup though. Paypal is definitely a great option as a quick and easy way to move cash around. Thanks!
Yeah, the Charles Schwab account is great for accessing your money, but it’s still easier to manage (i.e. easy deposits and transfers) your money with a local account. Opening accounts in some parts of Asia is incredibly easy, so really there’s no reason not to do it!
Thanks for the write up. I’m a European working in Kenya, and I was based in South Africa before. I’m still looking for the best ways to manage my money as I now have 3 bank accounts in 3 countries and I still have banking issues. For example, call center helplines are only reachable with local telephone numbers or transactions can only be done if you have a local ID number – which I obviously don’t. It looks like there are offshore accounts available to solve this problems (expat accounts). These accounts claim to follow you everywhere you go.
An other tip I would give is to negotiate your salary in a stable currency if possible. I managed to negotiate my salary in USD, a colleague of mine in local currency only (Ghana Cedis). With the local currency weakening my colleague has now missed out on hundreds of USD over the past months.
On the upside, I get higher % interest in South Africa than in Europe, probably because they are compensating for higher inflation. I get 6-7% easily on savings whereas 1% in Europe is a miracle. Then again, there is always that moment where you need to get your money out of the country, and I haven’t solved that problem yet.
Has anyone actually calculated net differences between local inflation rates, apparently higher local interest rates, & off-shore interest rates?
Do you have any recommendations for US-based bank accounts that don’t charge foreign transaction fees, as you mention in your article? I’m living in China and am tired of Bank of America’s 3% + $5 per-transaction ATM fees when I need to use my American account. I’d love to take my business to another bank. Any suggestions?
Hey Ivan! Check out the Charles Schwab High Yield Checking account. No foreign transaction fees and no ATM fees!
I’m retiring to Brazil from the States as I got married there in 2012, my question is this. Besides Schwab High Yield accounts what’s the next best bank as I want to keep most of my money in the states while opening an account in Brazil. (Unfortunately I couldn’t qualify for Schabs products) Thanks
I would recommend looking into partner banks between the States and Brazil. Then check their foreign transaction policies to find out if there’s a fee. Capital One 360 is a great choice for people who want to bank online, but you’ll have to check associated fees with banks in Brazil.
Take this advice with a grain of salt.
If you’re leaving the US for more than six months Schwab will close your Bank accounts (checking, savings etc.). I know because it happened to me.
After 10 years banking with Schwab I took a temporary work posting overseas. Even though I kept my permanent US address they dropped me as soon as they found out I was going to be out of the country for more than six months and claimed this was per standard Schwab Bank policy. They’ll let you keep your brokerage accounts by converting them to International accounts, but the FDIC-insured bank products will be closed. It was a serious pain in the you-know-what, and really disappointing from a customer relationship standpoint.
If you have a Schwab bank account just keep a low profile and hold onto it. Schwab are a great bank, they just don’t cater to expats. If they find out you’re overseas, they will close your account.
These are really great tips! When moving to a foreign country you should be prepared to manage your finances as there are so many specific things to consider. Having a local bank account is a must… also having a back up account for emergencies back home is a great idea. I used to live in Spain for a year and I was working for a firm in Barcelona. Moving there was already quite an expense. I find your tips really helpful for people moving abroad for the first time! Lovely post and a great blog! 🙂 Thanks!
Thanks for the interesting articles. (Also read about bringing taxes down to $0) I came across this blog as I was researching how to invest my family’s money legally while living abroad. We are (former?) residents of Massachusetts and currently live in China. What exactly is the law regarding investing with a brokerage firm while living abroad? It’s getting to the point where we are stagnant because we don’t want to break any laws. But it kills me to see money sitting in a savings account doing NOTHING! Any advice?
That’s something you should talk to a professional about. Talk to this guy—I hear he’s very good: https://ustax.bz
Good tips regarding bank accounts, but not everyone can get a local bank account where they live. Many nomads will go to Malaysia, for instance, only to find they can’t open an account without a residence permit (from a job or an investment). That’s why having the best international bank account is important; there are 1 or 2 banks in the US that are international friendly, but most are overseas.
This is really helpful! I also recommend using Transfer Wise to move the money that you earn while working abroad. Transfer Wise makes it easy to complete bank account-to-bank account transfers so that you don’t have to go through your bank and pay expensive international wire transfer fees.
It also aims to match the mid-market rate, which means you won’t be charged an exchange-rate markup.
There’s no minimum transfer amount and you can sign up and send a transfer in just a few minutes.
In fact, this service made it possible for me to transfer money between my bank accounts in different currencies, which is something PayPal won’t allow you to do without having two PayPal accounts in each country and would cost way more in fees if you go through MoneyGram.