Managing finances from overseas
15th April 2015
If you’re heading overseas to live and work for a period of time it’s important to remember that life carries on back home. You might be living abroad temporarily, working and returning home every now and then. In such circumstances, your UK finances - including standing orders, bills and taxes- will still need looking after whilst you’re away. Plus, any income generated at home and abroad must be processed properly. Although this might seem an overwhelming amount of hassle, it can be made easy by establishing a system that works for you. To help out, we’ve put together some useful tips and some guidance for managing your finances overseas
Essentially you’re looking for two things to stay on top of your finances: flexibility and security. With this in mind, feel free to use some of our pointers and effectively juggle your finances.
Try to clear your debts before you go. An absolute guaranteed stress reliever is to head abroad debt-free. It’s definitely worth putting a plan into action to clear your remaining debt. It makes way for a clean break and tidier finances to manage from overseas - freedom!
Choose the right bank
There are so many to choose from! Setting up a bank account abroad can be stressful, especially with a language barrier. Nevertheless, you want to be sure you make the right decision. The two main factors you should be looking for are simple money transfers and easy online access to your accounts. When looking for the right bank for your time abroad, consider these points:
- International banks are the safest and the most flexible; they’ll be more than happy to set up an international account for you before you head abroad. Because of their relationships with smaller banks overseas, there tend to be less ATM fees and more often than not, no transfer fees.
- Bear in mind operation times. Time Zone changes might make transfers a bit awkward with the wrong bank.
- Mix and match: Not quite as tasty as a pick ‘n’ mix but still… . Whilst one bank might offer to reimburse your ATM fees, another will tempt you with great interest rates on your savings account. Don’t be afraid to consider more than one.
Be ready to open at least two accounts, one at home in the UK and one for your overseas account. To benefit from banks’ fee-free transfers, it’s ideal for both of these accounts to be under your name.
Hallelujah! Thanks to online banking, managing your finances whilst living abroad has gotten a whole lot easier in recent years. Almost all international banks have an online platform available, so you can access and manage your finances remotely from your computer and mobile devices. You can forget the time zone and simply log on to make your usual payments.
- Stay secure online: It’s so important to stay internet-savvy! These days banks provide nifty secure keys to keep your online account safe. Find one that suits you, some act as card readers whilst others simply require a personal pin.
- International bank accounts can be set up to include Euro, US Dollar and Pound Sterling before you go. This is a huge advantage to accessing your funds immediately.
Choose a representative back home
It’s important to personally stay up-to-date with your finances back in the UK but it can also help to assign a representative and/or signatory to take the reins in case of an emergency! This responsibility can lie with a trusted family member or significant other or you can also hire the services of a financial advisor.
Making transfers safely without a bank
Transferring money abroad can be a scary prospect, it can be costly and for some international money companies ... this means a tidy profit in transfer fees. For larger sums of money, one way to avoid these hidden costs is to use a Foreign Exchange Broker - they handle the BIG money. Using an online comparison tool like this one can help you choose the best international money transfer company without having to use your bank. It’s just an alternative option worth considering that still keeps a hard eye on your money.
Keep an eye on hidden costs
Transferring money from overseas can also come with some pesky hidden charges you might not be aware of. It’s important to keep in mind that whilst some companies will offer transfers “commission-free”, that doesn’t mean they won’t dull the exchange rate in return. Money Saving Expert, Martin Lewis, sum things up quite nicely; it all comes down to one question:
“How much money will I receive after ALL charges?”
So not just the initial transfer fee and commission fees but the exchange rate as well! Stay savvy and use comparison websites to guide your international financial arrangements.
How will my tax be managed?
If you intend to leave the country to work abroad - don’t forget to let the tax authorities know you’ll be leaving. They can clue you up on your tax liabilities and update your records. Some banks might even throw in a premium tax review service to help with this transition and in some cases; this can mean a cheaper rate!
If you’re in the Armed Forces and posted abroad, here at RIFT we can help you get a tax refund towards the expenses you incur travelling back home.