Becoming an expat is an ever more popular way to turn your entire life upside down with an all-encompassing adventure. But it’s also easy to make mistakes financially and be left in serious trouble.
So here are some common expat financial mistakes that you should plan to avoid:
A big tip for business budgeting is to overestimate rather than underestimate costs, and the same applies to expat living. While the tax benefits of your new country could be worth the move, the actual day-to-day cost of living could be significantly higher – so make sure you aren’t surprised once those bills start flowing.
Similarly, it’s very important not to regard living in a new country as some sort of long-term holiday. Remember, it’s unlikely your actual income is improving dramatically, so resist the temptation of getting into ‘holiday mode’ and burning through your savings in the first few months.
3. Rushed investments
Another common mistake made by expats is not having patience when it comes to investments. It is all too tempting to arrive at your destination, make some local investments and then panic when they don’t deliver immediate, short-term results. But investing is the same no matter where you are, and short-term panic is never a good strategy.
4. Double taxation
It could be that one of the original reasons for deciding to become an expat is that you will pay a whole lot less in tax somewhere else. But if you don’t get great advice, plan ahead or do your homework, you could set up your tax status incorrectly and end up paying tax both in your new country and also back at home. Tax is a complex world, so it’s important not only to avoid the mistakes but to make sure you are maximising the benefits.
5. Getting conned
In Australia, it’s likely you were pretty savvy when it came to taking good financial advice and seeing when that advice was not only poor but potentially even a scam. But you’ll be without that local knowledge in your new country, which is why many expats find themselves either following very poor advice or actually getting conned into schemes that cost them a huge amount of money.
It’s always a good idea to get in touch with experts in the field, like our team at Expat Tax Services. We specialise in all elements of tax for expats, including Australian tax returns, and we offer financial advice to Australians living and moving abroad. Contact us today to find out more.