7 Money Moves to Make before You Move Abroad For Love

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Shiny red heart on pile of major countries banknotes using as world business money lover or valentines’ day gift

Love is in the air again around the world as millions of people gear up to celebrate Valentine’s Day.

When I was an Expat in China, I enjoyed celebrating Valentine’s Day twice a year. The U.S. Valentine’s Day holiday and the Chinese Valentine’s day Qixi. During these celebrations, I also met lots of Expat couples from around the world. Some married with a “trailing spouse” and children, others unmarried having decided to follow their partner abroad, and of course those who met their soulmate on their travels and decided to make a home together in China.

Sadly, after 2 decades as a global banker, world traveler, and expatriate I have also seen money issues end many global relationships. Failure to have a pre-departure financial conversation, lack of understanding about international banking, and unrealistic expectations can cause regret, stress, unexpected financial issues, and can destroy a beautiful international love story quickly.

Moving overseas for Love you will have many new financial challenges as you try to manage your finances between your home and the new host country. Before you say I do to moving abroad for Love, do the following:

1. Pre-Departure create a Financial Blueprint

Develop a solid financial plan that clearly outlines your cash flow. This plan should include all sources of income (salary, freelance earnings), your ongoing expenses like child support and student loan payments, and potential expenses like local health insurance and local utility bills. Don’t forget to add in money for unexpected emergencies like unplanned trips home and medical mishaps. And always have a Plan B Fund – as in Bye-Bye sorry it didn’t work out, and I’m leaving.

Even if you and your partner are on a company-sponsored international assignment thoroughly review the entire compensation package before you say yes. Decide jointly if this international move works from a financial standpoint.

2. Move overseas in baby steps

Start out slowly. Unfortunately, engagements can be broken, romances dissolve, and people can grow apart even living together in a foreign country.

In the short term, try romance long distance. If you’re not married, maybe your partner’s sponsoring company will pay for visas and airline tickets for visits.

Instead of packing up all your worldly goods and selling your house or giving up your apartment, perhaps rent out your home or sublet your apartment first and see how you like your new host country. This will not only give you a source of income but some comfort in knowing that if things don’t work out, you still have your familiar home to go back to.

Instead of quitting your job, ask if you can take a sabbatical from your current job until you are fully settled into your host country. Most companies offer at least 6 months of unpaid leave with job protection.  As employment contracts in foreign countries usually come with a 3-6 month probationary period, you could take a job overseas, and if your relationship does not work out or you decide to return home, you will still have the option of returning to your old position.

If you work for a global company, see if there are any global projects you can work on, or if they have offices in the country you are moving to, ask if you can work in that foreign office, or if it’s feasible, offer to set up an office in that international location. Alternatively, ask if you can work remotely.

If you’ve always wanted to start your own venture, this would be a good time to write a book, teach online, or get into the drop shipping or print on demand business by starting an online store. Also, consider earning a degree at the local University.

3. Have a financial agreement in place

Most countries recognize marriage as a sacred institution, offering the maximum benefits and protection for each party. This is why most of my friends tell me they would not accompany their partner to a foreign country without the benefit of marriage.

If you’re not married, consider registering as a civil or domestic partnership before leaving home. This might offer you the best possible alternative for financial protection should problems arise overseas. Think about creating a legal cohabitation agreement that will clearly state the living and financial arrangements you’ve agreed to. It can also cover how you will support your children, over and above any legal requirements to maintain them.

You can also structure the agreement to cover other scenarios. For example, if you are not authorized to work or can’t find employment, is your partner willing to support you financially, and to what extent? Will you have an allowance, or will your partner pay for all expenses in the home and host country, and for how long? And what if you split up? Who will pay for your repatriation? Also, if the relationship does not work out and you must return home, how easy will it be for you to return to your former life financially?

4. Understand your new Tax status  Pre-arrival find a qualified, licensed Tax professional who is skilled at working with the complexities of U.S. expat taxes and can help you understand your Federal, State, and potential host country tax filing requirements. U.S. citizens are subject to taxation on worldwide income  and in most cases must file a U.S. Tax return. You may also be subject to FATCA and FBAR filing requirements. You can also have State tax filing and liability requirements. You may also have a host country tax obligation. Know if your employer will pay your taxes for you, or if you will have to make payments directly to a local tax authority.

5. Purchase adequate health insurance Obtaining medical insurance that covers you globally is a priority. Don’t wait until you have a five-figure medical emergency abroad to discover that you don’t have comprehensive global coverage.  Some countries like Cuba, Poland, and the Czech Republic require proof of travel and medical insurance upon arrival. Other countries are considering making it mandatory. Make sure your plan also includes emergency evacuation and repatriation of remains or sign up with a crisis response company like Medjet.

6. Protect your U.S. credit  Living Abroad many U.S. Expats don’t give a thought to their U.S. credit history or U.S. credit score. Returning home, they are often surprised to realize they can’t easily obtain a new mortgage or insurance because they have developed a “thin file” or they discover their credit score has decreased. Worst case scenario they realize they have been a victim of identity theft.

Annually, obtain a free credit report from annualcreditreport.com and sign up with a credit monitoring service or at a bare minimum put a credit freeze on your U.S. credit file. Also, try using your U.S. credit cards regularly, so there is some activity.

If you decide to obtain credit in a foreign country, do so cautiously and make sure you understand the credit terms, especially regarding repayment. Penalties for unpaid bills in foreign countries vary from a black mark on the local credit bureau to jail time which could impact your immigration status. Also, I realize that a foreign credit history is usually not reported to U.S. credit bureaus.

7. Have multiple solutions for Foreign Exchange, Moving Money, and making Payments These will be the most pressing financial issues during your time living abroad. Have well thought out methods for exchanging foreign currency, moving money between your home and host country, and paying financial obligations in both countries. Some countries have currency controls where the currency is restricted, and you may only be able to exchange a fixed amount per day, and only move a certain amount out of the country per year. Also, don’t count on technology as a sure fix as mobile apps aren’t always seamless across countries. In a financial emergency, old standbys like Western Union may be the best solution.

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