Smart ways to stay financially connected to your family and future plans by assessing if you are financial savvy.
Photo by Hongmei Zhao on Unsplash
Starting a new life abroad can be many things — exciting, nerve-wrecking, full of career opportunities.
One thing it shouldn’t be is wallet-wrecking.
Financial planning doesn’t stop when you move away. Some look to financial advisors, some try to find their own tips and tricks for moving abroad.
From 1–7: count how many financially savvy actions you’ve taken.
Starting a new life abroad can be many things — exciting, nerve-wrecking, full of career opportunities.
One thing it shouldn’t be is wallet-wrecking.
Financial planning doesn’t stop when you move away. Some look to financial advisors, some try to find their own tips and tricks for moving abroad.
From 1–7: count how many financially savvy actions you’ve taken.
1. You budget.
Do you spend locally?
Maintaining eating habits from home may cost extra where you now work. Adjust by shopping for local groceries, frequent second-hand shops, and compare prices as you would at home.
Do you budget internationally?
Not just for your spendings — also the expected spending for your family at home. Cost of international travels can eat into your budget as well. Make sure to book your trips home early.
2. You save for the future. Automatically.
Do you set aside a sum every month for your savings account?
Don’t underestimate the power of habits formed from the start of your career. The younger you start, the more you benefit from compound interest. The accumulation of small sums through your working days will make a huge difference in retirement.
3. You save. In the right currency.
Does your local currency fluctuate? Save in a more stable currency to avoid losing fractions of your hard-earned money.
Some go after offshore bank accounts. Other new products such as multi-currency wallets can also be a solution. They allow you to load and store money in your local, home, and an international currency. i.e. On Eversend, you can convert and store your money in USD, and have separate amounts of KES and UGX for your day-to-day and sending remittances home in mobile money.
4. You know your local vs home currency exchange rate by heart.
Do you have an inflated perception of the real value of your money?
Money illusion research shows that people make monetary decisions on the nominal instead of the real value of money. This is easily applied when currency difference comes to play. You may feel like you have more money to spend or that products abroad are cheaper than they actually are.
When the face value of a McDonalds burger is only a small fraction of its cost in your home currency, it’s easy to think it’s cheap and overspend.
I.e. The same combo costing 665 Shillings in Kenya translates into 24579 Ugandan Shillings.
Tip: when creating an easy to calculate currency exchange for mental conversions, always remember a stricter rate.
I.e. 1 KES is worth 36.96 UGX. Don’t remember it as 1:35, be conservative and think 1:40.
5. You have a dependable, affordable forex platform
What does that mean? How you send money home.
Instant transfers for emergencies at home.
Bank transfers may take days to deliver, and only operate on working days. Wire transfers with Western Union and MoneyGram are reliable and quick, but charge much for this.
Aim for transparent total costs.
All agents and platforms maintain themselves by making money. Some boast zero commission or interbank exchange rates — but sneakily adjust the other to make a profit. The goal is to find services that are honest and give you a clear total cost for comparison.
Tip: With technological advances, it’s now extremely cheap and quick to send from P2P in the same country. New services challenge the idea that the addition of a border in between should change this.
Eversend works to make mobile money borderless, starting for sending from card/mobile money to Uganda, Kenya, Rwanda and Tanzania. (How does it work?)
6. You have the right insurance policies.
Do you have an insurance policy that covers you in the new country?
Especially health insurance when you’re alone abroad. It should cover medical repatriation assistance, medical and hospitalisation coverage, with an urgent hotline that works 24/7 all year-round.
Your 20s is an ideal time to invest in yourself and protection for your loved ones. Missed that? Start as soon as possible.
Younger and healthier applicants pose lower risks to insurance company, making the plan cheaper. You also cover any unforeseeable disruptions to your life plans.
If you travel frequently, make sure to get travel insurance as well. Eversend will be rolling out the function to purchase of insurance in-app. We are striving to streamline the process for all, so everyone gets the protection they need. Stay tuned!
7. You have checked the relevant international tax policies.
Do your home and host governments have a Double Taxation Agreement (DTA)?
In some countries, incomes are taxed both by the jurisdiction where it’s made, and where the income is received (i.e. your host and home countries). DTAs are bilateral agreements between countries that tries to eliminate the same income getting taxed twice. This helps to encourage mobility of talent.
Make sure your income isn’t taxed twice!