Just because those who bite the bullet and become an expat have an adventurous streak doesn’t mean they aren’t making a difficult choice. Yes, they are drawn in by the many benefits – expanding your horizons, building confidence, and hopefully achieving a juicy income boost.
But it’s just a fact that unless you’re super wealthy, not many people have much of a financial buffer. And being outside your comfort zone as an expat makes you even more exposed to those sorts of money worries.
Lose that job or run into another major obstacle, and an expat can find themselves completely exposed to a culture, society and system that doesn’t support them as well as Australia would.
What’s the solution? Ensure that, as an expat, you’re building your own financial safety net. How precisely do you boost that expat income? We explore 6 clear ways:
- Pick a great place
If you haven’t even decided where you’re heading, the absolute best place to start is by selecting a destination where it’s easy to make plenty of money.
Places like Luxembourg, Switzerland and some of the Gulf states rank highly on the list of places where expats believe they make more money abroad than at home.
Even if you do have a plum job, that doesn’t mean you should be flippant about your earning power. It’s incredible that expats would embark on their adventure without thinking about budgeting, as it’s one of the easiest ways to keep track of your money and use it as efficiently as possible.
If you know what you’re going to spend before you spend it, and you stick to that plan, you empower yourself to wisely save, invest and even spend on luxuries as you go.
With your main income and budget in place, it’s time to start thinking about saving. And the best time to start is yesterday – because the advantages of compounding means the more time you’re saving, the more benefit you’ll get from it.
Because spending is easy and saving is hard, the best way to save is to automate. Set up a direct debit from your main income to a savings account. Always put every cent of your income tax return into savings. Identify the things that don’t add value to your life but cost you money. And do plenty of homework about other ways to cut costs as you adjust to life in a new land and culture.
- Shop around
It’s amazing how often an expat will be seriously savvy about how and where to spend money at home, and then forget about the benefits of all those consumer tricks once abroad.
Think about it: When you buy a car at home, you shop around. When you sign up for a credit card, you’ve shopped around. When you buy insurance, you shop around.
One of the biggest regular rip-offs as an expat is the cost of transferring money to and from Australia – something you’ll probably do regularly. Take the Commonwealth Bank of Australia (CBA) as an example. CBA exchange rates may look ok on the page, but dig a little deeper and you’ll realise the rip-off. Using the CBA, AUD $10,000 becomes $6,843 (in mid August 2018). But just by using a specialist FX service instead, that same $10k converts into a cool $7,179. Free money!
- Do something on the side
It’s great to have a sound income and some savings savvy, but what’s stopping you from actually making some extra money on the side?
There are plenty of ways to do it as an expat. As an international globetrotter, you may know another language or two in addition to Australia, so can you work as a language tutor? What about running a blog and making some online advertising money?
With a bit of luck, your hobby or job on the side could start to make even more money than your main income, making you not just an expat, but an incredible entrepreneurial expat superstar!
There’s a lot to think about as an expat, and so even someone who is open to the idea of investing can give it all away once an expat. But a high percentage of expats embark on that adventure for the financial benefits, so it means not thinking about investing at all simply doesn’t make sense.
Being an expat could affect your risk profile, but if you’re young and you’re earning and saving well, being an expat can actually be the best time to press the accelerator hard on investing. Choosing the right investments and currencies can be difficult, though, and there may be tax advantages or implications that you don’t know about, so it’s very wise to consult a specialist expat investment advisor.
The final word
Stepping out of your comfort zone to live and work overseas can be exciting and memorable, but just scraping by financially is the best way to taint the experience. Luckily, there are plenty of ways to build, safeguard and grow your expat income so that you can do what you want and achieve your goals both today and tomorrow. Happy expat adventures!
*This is a collaborative post.
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