9 Money Moves You Must Make When Living Abroad

Moving abroad is one of the most thrilling undertakings a person can take as an adult. There are many things to consider when relocating — a new place to live, setting up a new workspace and all of the logistics that come along with planning a move. But one thing you shouldn’t neglect is setting up your finances .

“Maintaining financial stability while living abroad requires careful planning and strategic decision-making,” said Abid Salahi, finance expert and co-founder of FinlyWealth . “Expatriates must prioritize establishing a robust financial foundation that spans both their host country and their home nation.”

Read below for more strategic money moves you must make when living abroad.

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Set Up a US Address

Melanie Musson, finance expert with Insurance Providers , advised to get and use a U.S. address so you can manage your U.S. investments and maintain a history of “presence” in the U.S.

“The UPS store allows you to get a street address without property.”

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Open a Local Bank Account in Your New Country

One crucial step, according to Salahi, is to open a local bank account in your new country of residence. “This account will serve as your primary means of managing day-to-day expenses and receiving income.”

However, he said it’s equally important to maintain your U.S. bank account to preserve your credit history and facilitate any ongoing financial obligations back home.

Musson concurred, adding that you should also make it a point to get a credit card from the country you move to so you can avoid foreign transaction fees.

David L. Blain, CFA and chief executive officer at BlueSky Wealth Advisors , agreed it’s smart to maintain accounts in both countries. “I have helped clients open local bank accounts where they live while keeping a small balance in U.S. accounts. This allows easy access to funds in both places and a financial foothold in America,” he shared.

Consider Currency Exchange

Another critical consideration, according to Salahi, is currency exchange. “Expats should explore options for transferring money internationally that offer competitive exchange rates and low fees.”

He recommended services like TransferWise or OFX which can often provide more favorable rates than traditional banks.

Don’t Forget About Taxes

Taxes are a complex issue for expatriates, Salahi noted. He said it’s essential to consult with a tax professional who specializes in international tax law to ensure compliance with both U.S. and local tax regulations.

“The Foreign Earned Income Exclusion (FEIE) allows qualifying U.S. citizens to exclude up to $112,000 of foreign-earned income from U.S. taxes in 2024, but proper documentation is crucial to claim this benefit,” Salahi said.

Blain equally advised staying on top of tax requirements. “U.S. citizens must declare foreign income and assets,” he emphasized. “I work with tax professionals annually to ensure I properly report my foreign accounts, income sources and any real estate. Noncompliance results in stiff penalties.”

Look Into Investing Options

Investing abroad presents unique challenges and opportunities.

“Consider opening a brokerage account that caters to expats, allowing you to invest in both U.S. and international markets,” Salahi advised.

He noted that diversifying your portfolio across different currencies and asset classes can help mitigate risk and take advantage of global economic trends.

Blain also stressed the need to diversify across borders. “I invest in stocks, mutual funds and real estate in both the U.S. and where I live overseas,” he shared. “Geographic and currency diversification reduce risk while increasing opportunity. Keeping all your money in one place is unwise.”

Don’t Neglect Your Retirement Planning

According to Salahi, if eligible, you should continue contributing to your U.S.-based retirement accounts like IRAs or 401(k)s.

Additionally, he recommended researching local retirement savings options in your host country to maximize your long-term financial security.

Review All Insurance Policies

“Health insurance and life insurance require special consideration abroad,” said Blain. “I meet with clients to assess coverage needs and find appropriate policies before relocating.”

He said that failing to do so can lead to gaps in coverage.

Have a Foreign Emergency Fund

According to Mafe Aclado, finance expert and general manager of Coupon Snake , having a foreign emergency fund is definitely one of the first money moves you should make if you live abroad.

“Because in addition to preparing you for emergency and unexpected costs, it also saves you the trouble of having to pay extra to convert your dollar into the foreign currency you need within a short time,” Aclado said.

Stay on Top of US Debts

If you live abroad, Aclado said another money move that helps you maintain your financial foothold in the U.S., is staying faithfully committed to paying off your U.S debts and building/maintaining a good credit score.

“In the same way your good U.S. credit score can serve your interests abroad, the debts you owe can also follow and limit your chances of upward mobility, even outside of the U.S.”

This article originally appeared on GOBankingRates.com : 9 Money Moves You Must Make When Living Abroad