Not many experiences in life are as thrilling as starting a new life in a new country. But along with that buzz comes a lot of new responsibilities. Setting up your finances abroad quickly can help you avoid unnecessary stress and surprises.
In this Remitly guide, we’ll walk you through how to get settled financially when you arrive in a new country. Follow these steps in your first 30 days, and you’ll be on your way to building financial security abroad—along with an exciting new life.
Step 1: Open a local bank account
You can get by for a while with a bank account from your home country, especially if you have a credit card. But it can quickly get expensive, with exchange fees, foreign transaction charges, and unpredictable conversion rates eating into your money. Having a local account makes your transactions smoother, and some merchants require it. For example, I had to get a French bank account to pay my electricity bills when I moved to the country.
When you’re choosing a bank, here are some factors to consider:
- ATM access: Make sure there are lots of branches and fee-free machines you can use near your home or workplace.
- Online banking: Check if the bank offers English-language apps or web portals, especially if you’re not fluent in the local language.
- Fees: Compare account maintenance fees, withdrawal charges, and international transfer costs.
- Multilingual support: In countries with high immigrant populations, you may be able to find bank staff who speak your native language, especially in big cities. In Canada and the United States, for example, it’s very easy to find bank staff who speak Spanish, Cantonese, Mandarin, Punjabi, or Hindi.
Don’t forget the paperwork. Often, a bank will tell you what documents you need to open an account online, but typically, you will need proof of identification (like a passport or national ID from your home country), a valid visa or residence permit for the country you are in, and proof of a local address (such as a rental agreement, house purchase document, or utility bill).
Getting this step done as early as you can will make a lot of what comes next far easier.
Step 2: Understanding local currency and exchange rates
Currencies fluctuate against one another throughout the day, and understanding that is essential for making smart financial decisions. Even small fluctuations can make a difference, especially if you’re making a big purchase like a house or a car.
You can use Google to keep track of exchange rates, but remember that these are the base rates the banks get, and not necessarily what you will get. Remitly gives you a real-time overview of what you will pay to send money from one country to another. This is one of the best money management tips for expats.
It’s not a bad idea to have some physical cash with you, but that means you may need to exchange money. Avoid doing this at the airport, where fees and rates are usually the worst. Local banks are a better option. Depending on who you bank with at home, you may be able to get local money from an ATM without incurring any additional charges and at the most favorable exchange rate.
Step 3: Simplify international money transfers
Once you have your new bank account set up, you’ll need to transfer money from your previous country into your new one. Plus, you may need to send money home to support family members or cover bills. That’s why finding a cost-effective and reliable money transfer service is an essential part of your setup.
Knowing when your money is going to arrive and how much the transfer will cost you makes it much easier to budget your expenses and make sure you have enough money to cover everything.
Step 4: Set up a monthly budget to manage finances abroad
Regular budgeting is important no matter where you live. But it’s especially useful when you move to a new country, as the cost of things may be very different from what you’re used to at home.
Creating a clear monthly budget helps you to manage your new cost-of-living and avoid surprises while you settle in. A good rough guide is what is known as the 50/30/20 rule:
- 50% of your income should go on essential items like rent, utilities, groceries, and transportation.
- 30% can go on things you want—dining out, entertainment, shopping, gifts, and so on.
- 20% should go into savings, or paying off debt if you have any.
This is often easier said than done, especially if your income isn’t high. Don’t stress if you can’t meet these targets right away. Think of it more as a goal to aspire to when you are fully settled in, so you can build your financial stability abroad.
Budgeting apps like Mint or You Need A Budget can help you create and track your budget. They can connect to your bank account and automatically categorize expenses so that you have a clearer picture of where your money goes.
Realistic budgeting is key to avoiding financial stress. Knowing you have enough money to meet your needs will be a big load off your mind as you navigate starting your new life.
Step 5: Manage recurring payments
Regular bills are a fact of life wherever you live. Whether it’s your rent, power and water, Internet, phone plans, or insurance, there are all sorts of recurring charges you need to stay on top of.
Here are some of the most common recurring payments to set up:
- Rent or mortgage
- Electricity, gas, and water bills
- Internet and mobile phone plans
- Health, car, or renters’ insurance
- Public transportation passes or toll accounts
- Streaming services and other subscriptions
Setting up automatic payments from your bank account can help you avoid missing important payments and getting services cut off. Most banks allow you to schedule direct debits or standing orders that will pay bills automatically.
It’s a good idea to set a calendar reminder a few days before each due date so you can double-check that you have enough money in your account. When payments come out automatically, it’s easy to forget about them, which is why a monthly budget is so important.
Step 6: Research tax obligations
Taxes are one of the most challenging aspects of moving to a new country. Most countries impose some kind of tax, but the amounts they charge and the ways they do it are very different. For example, in the United Arab Emirates, there is no income tax at all, while in Finland, the top rate of income tax is 57.3%.
Plus, there’s all the other complexity of what is taxed and what isn’t, and how to go about paying your taxes. For example, when I moved to Canada, I had no idea that every resident is required to report their income to the tax office every year. And if you are a United States citizen, you must file taxes with the US every year, even if you no longer live in the country.
Tax law can get extremely complicated, and the penalties for getting things wrong can range from fines to jail sentences.
If you have any doubt, it’s worth consulting with a tax professional in your new country who can advise you on all the rules and any credits you may qualify for. Understanding tax obligations is a key part of achieving financial stability abroad.
Right from your first arrival in your new country, you should keep detailed records of your finances. Save receipts, invoices, and income documents so that you can show them to the tax office when the time comes. The more documents you have, the easier it is to deal with taxation.
Step 7: Plan for the unexpected with an emergency fund
Moving to a foreign country is an exhilarating experience, but it can come with unforeseen challenges.
You might get hit with medical bills before joining your country’s medical system. You might struggle to find a job or lose the one you have. Or you might need to go back home unexpectedly.
All of these situations will be a lot less stressful if you have an emergency fund allocated. Having some money in savings means that you won’t have to spend more money borrowing during a crisis.
You can start by setting aside just some of your monthly income in a separate account. Over time, you’ll want to build up at least three to six months’ worth of essential expenses, including rent, utilities, food, and transportation.
The best way to do this is to treat this as a non-negotiable cost, like any other bill. You can make automatic deposits from your paycheck to help your fund grow steadily. Having this money set aside can make a big difference to your peace of mind.
Managing finances abroad from day one
Moving to a new country is often one of the most exciting and, at the same time, stressful experiences of your life. But taking control of your finances from day one is an easy way to reduce stress and feel more confident in your new life. Tools like Remitly can help you avoid foreign transaction fees and move your money between countries safely and effectively.
When it comes time to set up your finances abroad, remember that you don’t need to do everything at once. Break it down into small, manageable steps like those outlined above—starting with getting a bank account in your new country. Then, you can build a system that supports you in your daily needs and prepares you for the unexpected at the same time.
Whether you moved for work, for family, for love, or for adventure, getting your money right is going to be a big part of building the life you dreamed of. So follow our simple money management tips for expats and enjoy the peace of mind that comes from having your finances under control. That way, you can focus on enjoying your new chapter abroad.
FAQs
Do I need a local bank account to live abroad?
Probably, yes. Although you can survive for a while with a bank account from your home country, you’ll end up paying a lot more in exchange and foreign transaction fees. Plus, many service providers like landlords and utility companies will only accept payment from a local bank account. Depending on the country, having a local account will simplify receiving your salary, buying things locally, and paying taxes.
What documents do I need to open a bank account abroad?
Usually, you’ll need proof of ID, a valid visa or residence permit, and proof of local address, in the form of a lease agreement, house purchase agreement, or utility bill.
What’s the safest way to send money internationally?
Remitly offers speed, security, and low fees, making it a better option than traditional banks for international transfers.
Do I have to pay taxes at home and abroad?
It depends on where you are from and where you are moving to. For example, US citizens have to file annual taxes even when they live outside the US. Most countries don’t demand this. Lots of countries, including the US, have tax treaties with one another to make sure residents don’t get double-taxed, so consult with a tax professional to find out what your tax exposure is.