Is Your Money Prepared for a New Country?

Posted: 07 Oct 2010 04:15 AM PDT

One of the dreams that many people have is to spend some time overseas. I was a foreign exchange student once, and I really enjoyed the brief taste of life in another country. In our ever-shrinking world, the opportunities to live in a new country — temporarily or permanently — are increasing. However, before you move to another country, it is a good idea to understand just what such a move will take in terms of your money.

: Photo: .craig

Preparing Your Finances for a Move Overseas

A recent RBC poll revealed that Canadian immigrants are surprised at how much things cost when the move. New Canadians, according to this poll, find it difficult to manage their personal finances in such a new place. I’d wager, though, that it isn’t just immigrants to Canada that find it difficult to manage their finances in a new environment; anytime you move there are financial considerations. If you are moving to a new country, those considerations could be even greater.

When moving to a new country, some of your money considerations should include:

Getting to that country.
Shipping some of your household items to that country.
Selling a lot of your household items. (And buying replacements upon your arrival.)
Deciding whether to sell your home (you may need a lot of time to do this), or whether to rent it out to someone you trust. If your residence elsewhere will be relatively short-term, you might just get a house-sitter.
Storage for your household possessions if your move is meant to be temporary.
Paying for travel documents and other bureaucratic necessities.
Finding a job (if you aren’t moving because you have a job).
Finding a bank that can handle your personal finances.
Figuring out how much of your capital needs to be exchanged for the local currency, or deciding whether or not to use a credit card and pay those fees instead.
Looking for — and probably paying for — a school for your children. (You could home school as well.)

Moving Your Money

Whenever you move, whether you remain in your home country or move overseas, you will need to make sure you are prepared to move your money. This might include finding a bank that you can access in your new home, and going through all of the actions that will shift your automatic debits and direct deposits into your new account. However, in this world of global and online banking, it might be possible to manage your finances from afar, keeping your current account and transferring money when necessary to keep things running smoothly. If you plan to live in a new country for a substantial period of time, though, it is a good idea to have some sort of local bank — especially if you will be doing work that includes being paid in the local currency.

Be sure to give yourself plenty of time to prepare. You want to make sure that all of your documents are in order, and that your mail will be properly forwarded. Contact your most important accounts directly to apprise them of the situation, so that they know how to reach you while you are living in a different country.

And, of course, as you move, keep in mind the basics of financial planning while you are in your new home. Continue to live within your means, tracking your spending and sticking to a budget while building up your emergency fund. And always assume that you are underestimating what it will cost to live in another country. You will find that you are more prepared for unexpected expenses if you have taken the time to get your money ready for a new country.

Dollar Matters: Retirement! Edition

Posted: 06 Oct 2010 09:00 AM PDT

Many of us have retirement goals. We know that we are headed there, and we are interested in saving up so that when we stop having to work for our money, it is ready to work for us. (Or, rather, that it has been working for us for a few decades so we can retire.) Whether you plan to fully retire, or just semi-retire, here are some great recent posts on retirement:

The End of the 4% Rule?

Philip at Widebread tackles the long-standing 4% rule of thumb related to withdrawing money from your retirement account. No more just following the rules — you’ll have to start paying more attention.

Don’t Rely on Social Security

Trent at The Simple Dollar is fairly blunt about what you can rely on for your retirement. And basing your retirement success on Social Security is not the way to go.

Pensionize Your Nest Egg Book Review — Milevsky and Macqueen

Mike at Money Smarts reviews this great book, Pensionize Your Nest Egg. The idea is to set up your retirement fund so that it creates a regular income stream that can provide you with money for the rest of your life.

Eight Steps to Early Semi-Retirement

If you are interested in an early semi-retirement, this post from Free Money Finance can provide you a step by step overview of how to achieve your goal, using advice from the book Work Less, Live More: The Way to Semi-Retirement.

Planning Your Retirement Spending

Mike at Oblivious Investor goes over some different approaches to retirement spending. Remember: Getting there is just the beginning.

6 Warning Signs You Are on the Wrong Career Path

Before you get to retirement, you have to work. Over at Redeeming Riches, you can read about the signs that you might be on the wrong career path.

Life Insurance Blog

Thursday, October 7, 2010