This article is for informational purposes only and should not be considered financial advice. Always consult with a qualified financial advisor for personalized guidance.

Dear Clever Expat,

Since becoming an expat, my perspective on finances has changed significantly. I’ve always felt that finances were more of an enemy than a friend. Whether that has changed because I am older now with different priorities, or because I am living abroad, I pay attention to different things in my banking accounts.

As an expat, much of my financial monitoring energy goes into adjusting my expectations. While many things are not nearly as expensive as in the US, they can still be expensive. An unexpected meal out with friends can be much more relaxed knowing that I have budgeted enough for “meals out with friends” in my host country.

I’ve adjusted my expectations so it accommodates my new lifestyle. In short, my budget has become more of a spending plan than anything else. And like any spending plan, your spending choices highlight your priorities.

So what have I chosen to spend more money on? Well, at this point in my life, I have a few big priorities:

• Housing. I know we pay more than the norm here because it was important to have a quiet, modern, renovated home. Yes, I currently rent, but purchasing a new home may be a priority in the future, just not right now.
• Insurance. Quality insurance – with zero copays – is much cheaper than in the US. It’s not free, though, and the medications are still sometimes quite expensive. However, the peace of mind that comes with knowing that routine medical care will not break the bank is significant.
• Social activities and adventures. Things like eating out, going on excursions with friends, and travel have become more normal here than in the US. However, a weekend away will not be a mystery expense the way it might in the US.
• Taxes. I’m not a financial wizard, but I know that expat taxes can be quite the challenge for new expats. I do my taxes differently here, and while there are tax treaties with the US in place, navigating those or hiring someone to help me can cost an additional amount.
• Transferring money appropriately. Most of my money is in the US, and I periodically transfer an amount into my local bank account. I limit the amount in my local account because so many expenses are pulled directly from my bank account (it’s just the way things work here!), and I don’t want a bookkeeping error to empty out my bank account without some stops in place.

So what are some things that I haven’t needed to include in my budget? I no longer own a car, which is a huge expense removed. I no longer have to include copays in my healthcare. I no longer stress about the cost of groceries and high-quality food. Having a gym membership no longer costs hundreds of dollars a month. My cellphones, telephone, television, and wi-fi together cost about one third to one quarter of what they cost in the US.

If I were starting my adventure now, I would pay attention to the following:

• Currency rates and exchange opportunities
• Taxing structures and expenses
• Insurance (usually paid a year in advance)
• Investments, especially considering when I will retire or have retired
• Technology to stay connected to friends and family back home and accomplish my tasks

Part of the expat adventure includes managing finances differently. Think of this as the “back office” function of your new lifestyle.

You’ll definitely find that finances differ almost every other country’s approach. While you will have to figure out your own plan for your own finances, check out this book from the Clever Expat Bookshelf. Once you read it, you’ll be MUCH more prepared to make the healthcare decisions necessary for a successful expat experience!

Keep exploring!

The Clever Expat