In this video, I discuss ways to make it easier for a young person to survive long-term in a foreign country in 2 different video parts. 1. Start saving now
If you’re seriously thinking of living abroad, the time to start saving is now. It’s great to have seven to nine months’ worth of living expenses in the bank — or in an easily accessible, low-risk savings vehicle — before you move abroad.
You may need more or less depending on your lifestyle. The exact amount you should save will depend on your job, family status, lifestyle, the current exchange rate, and your local network abroad.
2. Create a budget for living abroad
It’s great to have savings, but you should also understand the cost of living in your new country. If you’re not sure how much things really cost there, your savings might not last as long as you think.
Before you move abroad, figure out the costs of housing, food, education, entertainment, transportation, utilities, and insurance in your new country. From there, you can create a monthly budget based upon your income and projected expenses.
You can find sample budgets for many countries online. Expat blogs, moving checklists and online cost-of-living calculators are also helpful for planning your budget.
Once you move abroad, track your living expenses for a few months and see how your budget stacks up. You can then adjust your spending accordingly.
As a future expat, don’t just plan for the costs of moving abroad. Think about the costs of moving back, too, or flying back to visit family and friends.
What if you have an opportunity to move abroad before reaching your savings goal? Make sure you at least have the funds to cover housing costs, including security deposits and other settling-in costs, plus emergency health care and repatriation expenses.
3. Choose your bank before you go
If you’re heading to a country with a less developed banking system, be sure to research banks in advance.
Focus on the bank’s international clearing networks and whether they issue U.S.-style credit cards with the Visa or MasterCard brands. You can also check whether a bank participates in a shared ATM or payment clearance network like Cirrus.
4. Set up your bank account ASAP
If possible, start the application process for an overseas bank account before you leave the U.S. While you might not be able to open an account before arriving in your host country, you can still gather all the documents you’ll need once you get there.
5. Understand expat taxes
Hoping to hop on a plane and skip out on your tax bill? Even if you’re thousands of miles away, you’re still on Uncle Sam’s radar. The U.S. requires citizens and green card holders to file returns and pay taxes when living abroad, even if they also file a tax return in their host country.
6. Keep saving for retirement
No matter how easy the living is in your host country, you should still keep stashing away cash for retirement.
If you work for a company with a 401(k) plan, keep contributing while you’re living abroad. If the company policy excludes expats, ask if the plan can be amended to allow expat participation. Companies may find an amendment worth the value of having good employees overseas.
7. Keep your credit in check
Do you have an excellent credit score? Leaving the U.S. to live abroad for an extended period could cause that score to plummet— and cause financial trouble when you return home.
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