Five ways to get financially smart whilst living abroad aka 'Expat Adulting 101'.
You’re moving abroad, your ticket is booked, you’ve packed your belongings and let go of all those items you no longer need. It’s great, it’s liberating but as a functioning adult there’s probably a few things that you need to take into consideration.
When I decided to move to Scotland a few years ago it was easy, I got my visa, I paid for my flight and I put lot’s of ‘things’ on hold. I mean things like health insurance and my teaching accreditation. I feel like moving abroad as an Aussie is so common that most institutions have a system already in place for individuals to be out of Australia for at least two years before returning.
But what happens to all these contracted agreements? Oh and finances! What about finances?
Being an adult abroad is the real deal and if you’re like me you might be juggling two of three bank accounts over two countries, with two superannuation accounts and maybe even life insurance back home just to mix things up.
As an Aussie currently living abroad these are: the five things I am doing to get my financial life under control:
1. Figuring out what Traditional Banking works for me in multiple countries.
No one likes politicians or banks, it’s universal. But as an expat there’s a damn good chance that you will end up having a lot to hear about concerning both of these things.
The first thing I need to say is this, keep your home bank account! I cannot stress this enough. Until you are a citizen of another country altogether make sure you keep your bank account in your country of citizenship. If you don’t have a permanent address in the country you’re a citizen of, thats fine. You are a part of the modern age of online statements after all, set up your banking to be completely online, tell your bank that you’ll be out of the country and if they can’t do it? Find yourself a better bank before you move. Every bank should be able to support you whilst you live abroad.
Keeping a bank account in your home country is important for so many reasons, especially if you do eventually have to or plan to move back ‘home’. The only credit score I curtly have is attached to my Australian bank account, without it I don’t have at type of credit score. In Australia I have an everyday expense account, a savings account and a credit card. Whilst I do log into my Aussie banking app every now and again to keep an eye on things, I also make sure to use my credit card every now and again to keep my credit score moving. I make purchases within Australia (like sending flowers on birthdays) and then I pay the purchase off either using the money within my Aussie account or Transferwise.
Research what banks are helpful to those living abroad, who will give you a ‘standard account’ opposed to a ‘basic account’, even without UK based credit history. When you first move abroad a ‘basic bank account’ might be the only way you get in the door of a bank but with this type of account you are limited from some banking services you might find useful. Keep an eye on your banking and know when you are able to switch to a better account.
Barclays and Santander are two banks that I have dealt with in the UK and have not had any massive issues.
2. Monzo - a lifesaver of a banking option.
“Help us build the kind of bank you want to use.”
This is a statement pulled from Monzo’s website and trust me when I say, they are a bank that you want to use. I know that in my previous point I said ‘no one likes banks’, well if more people used Monzo and if more banks were like them, everyone would love their bank.
Joe introduced me to Monzo when it first came out and although I was hesitant it has been one of the best financial decisions I’ve made. As an expat being able to have this bank account without the need of a permanent address is great, you can just apply with your face and your identification. You get amazing conversion rates in an abundance of currencies, there is more in-app protection than most traditional banks, it works as a brilliant travel card and allows you to have a joint account with your partner in a few easy steps. And the best part? This bank is only going to keep growing and improving and so far they are on a pretty awesome trajectory.
I cannot sing the praises of Monzo enough. Oh! And their customer service? Amazing! The team are so super helpful and every chat conversation I have had when I was requiring help has been positive. They tone and attitude of their staff align with the customer service that most of us could only dream of in a bank.
Read more here: https://monzo.com/tone-of-voice/
3. Getting real about my Superannuation Contributions (Pension)
I have this distinct feeling that having two superannuations, in different countries, is going to bite me in the ass when I am old enough to claim from them. But until then, I’m doing the best I can to have an eye on them and their growth.
To be completely honest with you I’m still new at this whole ‘watching and paying attention to my money’ type mindset. For some reason I have always found money and investment to be quite intimidating, however, recently I have bee taking more of an interest into what’s going on in my accounts.
If you’re able to set up your current superannuation account to be viewed and amended online I would say go for it. I like being able to know that even though I’m not currently employed in Australia, I’m still making money in my super fund and not losing money. I’m also in the process of making a voluntary contribution to this fund as I would like to see it keep growing. If this an option to you, keep growing your super, make sure that you are a part of a fund that is tracking positively. I think a lot of companies take for granted that people don’t check how well their investments are growing. Whilst I still have a lot to learn about this area of adulting, growth is something that I can track at least to start.
As for the country you are residing in as an expat, I would highly recommend that you get yourself educated on that countries take on your retirement. In the UK I find that I don’t get as a good of a contribution as I was getting in Australia. I was honestly a little appalled when I looked at my pension balance, I logged into my account and was like, “Thats it!?”
Not happy Jan! (context for this iconic Aussie statement attached here!)
I have started doing my own research into investment options in the UK and have intentions of making an appointment with a financial planner in the near future (aka when I can get an appointment with Joe and I in the same city!). Get educated on what you don’t understand, do your own research so that you have some way of cross referencing the information a professional might present you with. Don’t follow anyone blindly, especially when it comes to your money.
There also happens to be an excessive amount of expat financial resources online and at your disposal. Get your thinking cap on boys and girls, retiring with some money in the bank would be nice after all!
4. Life Insurance
Oh man. Okay. I’m going to get very honest with you here.
I have had, ‘get life insurance’ and ‘write a will’ on my to-do-list for over a year now. Really not great on my part.
I had put both of these things off for so long that I’d totally forgotten about them. And then one day when I was checking up on my Australian Superannuation fund I noticed there was a section about ‘life insurance’, which apparently, upon further research, I have and pay for. Whoops. I had no idea! And it was at this point that I decided to get informed about my own life and write this blog post!
I’m currently in an email conversation (between timezones) with my superannuation fund to make sure that my life insurance is still valid whilst I’m living abroad and to triple check that this won’t suddenly change after a two year period etc.
My tip is to re-look at what you have and ask questions about its validity whilst you’re living abroad - preferably get your answers in writing. (Save this email somewhere special so it won’t get lost!)
And if you find that you don’t have life insurance that’s valid in the country you’re living in, do something about it! Also if you don’t have life insurance at all and you’re living abroad? Make the effort to do something about it.
5. Moving Money
Birthdays, holidays, credit cards and or mortgage payments. There are a multitude of reasons as to why you need to be transferring money back and forward between different currencies as an expat. And if you’re not careful, it can become an extremely expensive necessity.
My saving (financial) graces when it comes to moving money about are TransferWise and Monzo. TransferWise is an online money transferring website. It gives you the best rate available and you can transfer money to bank accounts anywhere in the world, without an exuberant amount of fee’s. This platform is an absolute game changer. When you’re sending your money abroad you want it to go the distance and not be pulled apart with a rubbish conversion rate and extortionist style fees. Trust me, use TransferWise.
Monzo has teamed up with Transferwise and much the same, offer amazing rates on currency conversions. The beauty of this relationship is that you can use your Monzo account when you’re travelling without having to pay stupid bank fees or deal with ‘the banks’ rate of conversion. Monzo is so damn good it’s almost unfair to call them a bank, if anything more banks should aim to be like them!