Jesse Lingard is taking the bold step of playing his football in South Korea. If you want a similar adventure, what do you need to think about to keep your finances from taking flight?
The allure of taking your next career step overseas is undeniable: new experiences, cultural immersion, and the potential for a new twist in your professional path. But before you pack your bags and hop on a plane, it’s crucial to consider the financial implications of this exciting move. While life experience is invaluable, it shouldn’t be expensive, so here’s a roadmap to navigate the main things to consider when working abroad:
Cost of Living: Research is so important. While a higher salary might entice you it’s not just about the incomings. Delve into the real cost of living in your chosen destination. Factor in rent or house prices, the cost of utilities, groceries, transportation, and other essentials. And, of course, don’t forget the price of the nightlife and (unrelated) unexpected costs like medical bills. Tools like Expatistan can help compare costs between your home and potential destinations, but a pre-contract trip can also be the most educational thing you can do.
Taxes: Tax complexities await! Understand the tax systems of both your home country and your new home. Or, perhaps, get us to do that for you. You might be subject to double taxation, meaning you pay taxes in both your new country and your home one (which may depend on how many days you spend in each). We can look at tax treaties and exemptions to minimise your burden, and give personalised international tax advice.
Banking and Money Transfer: Setting up a local bank account is vital for managing your finances abroad. Make sure you understand the likely fees but also the accessibility,and ease of transferring funds between accounts. You could use international money transfer services like Wise or Revolut which can offer more competitive rates and faster transactions (but don’t assume that – check!).
Currency Exchange: Fluctuating currencies can impact your budget, so understand the exchange rates and plan accordingly. You could consider locking in exchange rates for larger transactions, like a car or a house, or using debit cards with no foreign transaction fees for the more day-to-day stuff.
Insurance: Health insurance is paramount – if you’re a sports professional moving abroad, like Jesse, then your new club would cover a lot of your health insurance to protect their investment, but make sure you know what your own arrangements include both for you and your family, and that it covers the country you’re moving to. Some exclude some of the fun things, so it’s not just about serious medical emergencies, but also that daft injury from water-skiing. And make sure your belongings and property are fully covered too.
Retirement Savings: Retirement may seem a long way away, but there’s plenty of stories of well-paid athletes and media figures whose careers didn’t take the turns they’d hoped and their later life was thereby blighted, so don’t neglect your retirement savings. Research options to contribute to your home country’s plan or explore alternative retirement plans offered in your new country.
Finances on the home front: If you move abroad and keep your house in the UK, then renting it out is an obvious extra source of income – but, if you do that, ensure reliable property management and consider potential tax implications. If keeping it vacant, factor in maintenance costs and security measures.
Long term goals and short-term plans: What’s next? Is this a long-term plan or a short(ish) adventure. If you plan on a new life entirely then that affects your spending, your income and your savings and investments. What it doesn’t change is the need for a robust emergency fund to cover unexpected expenses, job loss, or medical emergencies. Aim for at least 3-6 months of living expenses in your new currency.
And key to all this is to stay up-to-date on tax regulation, currency fluctuations and the significant costs of your new life. If you plan a Big Move, talk to us about to make sure your money doesn’t fly away too.
