Wise money tips

Here are some tips on day-to-day personal financial planning, to make your life as an expat easier for you and help you to avoid some common pitfalls.

Wise money tips for expats

Bank accounts

Having an offshore bank account is a basic financial planning tool for expats. This provides unrestricted access to your cash wherever you may be.

If you don’t have an offshore bank account, don’t make the mistake of closing bank accounts in your home country until you have opened an offshore bank account.

Expats should keep no more money in the bank account of the foreign country where they reside than is needed for visa requirements and living expenses. As with many countries, it is often easier to transfer money in than out.

Credit cards

Don’t cancel your existing credit cards from your home country. Some credit card providers won’t issue credit cards to foreigners unless they have a valid work permit;. Many foreign credit cards actually work like cash cards, with the ‘credit’ limit based on your bank balance and so at best, you end up with a much diminished line of credit.

If you can, arrange for an offshore credit card BEFORE you make your permanent move from your home country.

Property

Think hard before you buy property and then, think again. Property is a lot less liquid than financial markets investments. If you are an expat who is considering buying property in your new country of residence, you need to look carefully at the ‘ownership’ arrangements. We would always recommend that you take professional independent advice from a reputable local lawyer before making any property purchase in Asia.

Make a will

If you don’t have a will, your local assets are subject to local intestacy laws when you die. This means that your property, bank account and stock market account will quite possibly pass to those other than whom you intended.

Some banks have a policy of only dealing with the Embassy/Consulate of the deceased when an expat dies. This is avoidable by taking some simple precautions.

Health insurance

It can be quite difficult for expats to get health cover over the age of 60 although some providers will extend existing cover to existing customers beyond that age.

The home countries of some expats that do currently provide free national health care to its citizens are now imposing restrictions on those returning from overseas. In the UK, there is now a waiting period of 6 months before returning expats can enjoy free medical treatment. This applies regardless of your age.

Life insurance

Many expats have life insurance policies taken out on their own life with themselves as the beneficiary. At best, this results in a time consuming process of ‘probate’ as your loved ones attempt to obtain the proceeds of the policy. For many expats, these proceeds could also end up being taxed at very high rates.

These problems can be overcome by placing the life insurance policies into trust, a service that financial advisers can offer free of charge to their expats clients.

A protected legacy

Many expats with substantial assets have beneficiaries who are not always able to manage such wealth in their own best interests. Your estate can be structured in a way that protects your loved ones from themselves and yet leaves you in control during your lifetime.

For more information on financial planning for expats contact us.