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Are you planning to move abroad? A large number of people across the country are migrating to grab career opportunities and stretch out retirement savings.
Of course, moving abroad is not going to be as easy as you think – a new atmosphere, different people, unique culture, cost of living, accommodation, lifestyle, and above all your finances, you have to consider everything.
Whether you are going abroad for pursuing higher studies, settlement with family, or for business purpose, you need funds as much as you can arrange. You will probably take out a loan to swing into action, but make sure that you understand the financial implications of living in a new country.
Financial planning is mandatory before you get onboard if you do not want to have a rude awakening. Here are some smart money management tips you should follow before moving abroad:
Start Saving Now
If you are serious about going abroad, you should start setting aside money right away. Before you book the ticket for your flight, you must have saved at least seven to eight months worth of your income in your bank account.
If you want to build up your savings account, you need to cut back on your expenses. The more you tighten the belt, the more money you will have in your account. However, the savings depend on other factors such as living cost, your lifestyle, and family status.
Be patient, as you cannot reach your savings goal too quickly. You are likely to dip into your savings for your unexpected expenses, so it might take a long time. It is better if you start to put aside money right away.
Create a budget
Savings are paramount but at the same time, you must know about the cost of living in your new country. You should know beforehand how much it is going to set you back, otherwise, your savings will not last as long as you may have thought.
Find out the cost of housing, entertainment, food, education, transportation, utilities, insurance, and medical facilities. Use online tools to estimate the living cost and accordingly create a budget.
The budget will help you keep overspending at bay. When you move abroad, keep tabs on your outgoings at least in the beginning unless you get a good job to give your finances a leg up. Adjust your spending according to your budget.
Choose a bank and process the application
Make sure you have researched banks in advance. Search for the banks with international clearing networks. Try to know about other facilities like credit cards, MasterCards, and above all they let you open a bank account. Some countries do not allow non-residents to have an account registered with a bank.
Do not forget to find out if all bank accounts are guaranteed. If the guarantor is a private organization, you must check the reputation of the organization.
You should choose a bank that provides all types of short-term and long-term loans so that you can borrow money in case of an emergency. Compare interest rates, processing fees and other charges. This step is crucial when you are planning to buy a house in the new country.
Once you have done enough research and gathered all information, start the application process for an overseas bank account before you leave your home country. You are likely to face difficulty opening the bank account in your host country, so it is better if you have got it done before takeoff. You have still an option to gather all documents and fulfil necessary details.
Do not delay in opening of a bank account otherwise, you will face problems in finding a house, obtaining a credit card, obtaining a mobile plan, credit card, and so forth.
Be cautious of your credit
You may have an excellent credit score when you live your country but when you return after a long time, you will find to have your score plummeted.
You are likely to face challenges if you want to take out a mortgage or even a short-term loan. The bank or a direct lender may turn down your application or charge high interest rates.
So do not debunk the use of your credit card in the host country. Use the credit card to make a few purchases in a year. This will help you keep your credit score stellar.
Keep saving for an emergency
However much the living is easy in your home country, you should brace yourself for unexpected expenses. Whatever you earn, stash away at least 10% of your monthly income so that you do not need to rush into taking out a loan to finance your emergency. In the host country, you will have a handful of options of borrowing. Make sure that you have enough money in your savings account.
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