Global Money Matters: A Guide To Making Smart Money Choices While Living A Global Lifestyle
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Financially Preparing to live a Global Lifestyle

In the U.S., April is traditionally consumed with preparing for tax day on April 15th. However, those of us living outside the U.S. (and can prove it) receive an automatic extension until June 15th. You can also receive an additional extension until October if you complete IRS Form 4688.

I usually use April as a time to review my finances, particularly for the previous quarter. This also gives me another opportunity to make some financial decisions about the coming year. As living in a major city like Shanghai is getting as costly as living anywhere else, it prompted me to write a article on being financially ready to live a Global Lifestyle. Read the article and let me know if you are ready to live a global lifestyle

Have you consulted an immigration attorney about your move overseas?

Before you embark on living a global lifestyle, on your list of things to do should be a consultation with an immigration service, which is usually staffed with immigration attorneys. 

If you are working for a corporation, they will no doubt take care of any visa and immigration details, however you should still have a rudimentary knowledge of the immigration process. An Immigration service will shepard you through the immigration process and let you know what you should expect, avoid and prepare for. They will help you decipher the requirements and submit paperwork on your behalf.

Immigration services can also prove invaluable if you find yourself already in a foreign country and are having immigration issues. These immigration professionals will know best how to solve and circumvent any issues and problems. Seeking their advice as soon as an immigration problem presents itself is the best option. 






Are you taking safety precautions with your finances when you move overseas?

As a rule of thumb, always password protect your computer and all mobile devices (i.e. iphone, ipad). Change your passwords every 30-60 days. Make sure you always use a Wi-Fi connection with a password and for an added layer of protection, always use a VPN (virtual private network).

Use the same safety precautions you would at home. Never walk away from an ATM machine without making sure that you have completed your transaction. Although ATMs will time out, you could still give a thief ample time to see enough of your financial information to make you an easy target for a robbery. 

Moving Overseas? What's the banking system like where you're going?

If you are planning to move abroad anytime soon, have you thought about the banking/financial system in
the new host country you are moving to?

Do you know if they even open bank accounts for foreigners/non residents?
Due to the Patriot Act in the U.S.,and the intense compliance requirements needed to open a bank account for U.S. citizens, many foreign banks have just decided not to stop opening accounts for U.S. citizens.

What type of documentation is needed to open a bank account in the foreign country?
Documentation needs vary from country to country, but generally having at least two pieces of picture identification (i.e. passport, driver's license) and some type of proof of address (utility bill) is a good start.

What types of accounts do they offer? Interest Bearing? Multi-currency accounts?
This is a personal choice, dependent manly on your needs at account opening. Always have a clear idea of what you actually need (i.e. are you using this account to receive your salary and manage expenses or just to move money).


A Toolbox of Global Financial Solutions

If you are moving overseas, having a Toolbox of Global Financial Solutions is a necessity. You'll need different financial solutions to meet the different financial challenges you will face living overseas. A couple of financial tools that are a must:

Identity Theft and Living Overseas

Identity theft is one the rise - not a good trend for people living a global lifestyle, as identity theft tends to happen more frequently when you are living overseas.

A new study by Javelin Research found a connection between the rise of identity theft and smartphones. Technology can be both a friend and a foe. Living overseas you need technology to help you manage your life, especially your finances back home.

Computers,and other mobile devices (smartphones and tablets) make our life easier, but should also be used with caution. Password protect all devices (and change at least 30-60 days). Always try to use a WIFI connection with a password and use a VPN (Virtual Private Network) when possible.


Moving Overseas? What's the banking system like where you're going?

If you are planning to move abroad anytime soon, have you thought about the banking/financial system in
the new host country you are moving to?

Do you know if they even open bank accounts for foreigners/non residents?
Due to the Patriot Act in the U.S.,and the intense compliance requirements needed to open a bank account for U.S. citizens, many foreign banks have just decided not to stop opening accounts for U.S. citizens.

What type of documentation is needed to open a bank account in the foreign country?
Documentation needs vary from country to country, but generally having at least two pieces of picture identification (i.e. passport, driver's license) and some type of proof of address (utility bill) is a good start.

What types of accounts do they offer? Interest Bearing? Multi-currency accounts?
This is a personal choice, dependent manly on your needs at account opening. Always have a clear idea of what you actually need (i.e. are you using this account to receive your salary and manage expenses or just to move money).


Moving Abroad for Love? Don't Forget Basic Financial Tasks

 

Ensure you have full access to your bank accounts at home (i.e. toll free and collect telephone number, online and mobile banking).

Have a method for receiving and processing payments (i.e. remote check deposit and PayPal).

Be mindful of important due dates and holidays in your home country that could affect financial transactions (i.e. U.S. Bank holidays) in the U.S. not observed in your in your host country).

Keep in mind time zone differences for account updates and daily ATM and POS limits (i.e. calendar days vs. business days).

To minimize mail delivery as much as possible, set up automated online bill pay and receive financial statements online.

Moving Abroad for Love? Get Professional Advice


You’d  be surprised what you can learn from a one-hour consultation. Research and make phone calls pre-departure and during any visits to your new host country. Find licensed professionals who have experience helping people in your unique situation. A couple of hundred dollars for consultations to ensure that you have a rudimentary knowledge of your new host country is a small investment to make.

Invest in a consultation with a licensed, qualified tax professional. If you are a U.S. citizen and subject to taxation on worldwide income this should be a non-negotiable. As a U.S. citizen, you are never outside the reach of the IRS. Even though in the back of your U.S. passport it states your obligation to file and report on worldwide income, most U.S. citizens don’t fully understand their U.S. tax-filing obligation and think that because they are moving overseas and earning income outside the U.S., their U.S. tax financial obligation ends.

Also, make sure you are knowledgeable about your tax filing requirements and potential tax liability in your new host country.

Seek advice from an immigration attorney to fully help you understand the basics of local immigration law, including visas, work permits and your rights as a foreigner.

Engaging a local insurance broker will give you an overview of insurance options available in your new host country. A priority should be medical insurance. Before you leave your home country, check your international medical coverage. Don’t wait until you have a medical emergency abroad to discover that you don’t have comprehensive global coverage.

 

 

Moving Abroad for Love? Have a Financial Agreement

 

Is your partner willing to support you financially until you get settled? To what extent? Will you have an allowance, or will he/she pay for all your expenses (a la Carrie and the wealthy Russian who paid for her apartment while he whisked her off to live with him in Paris in Sex and the City).

Are you comfortable being financially dependent? Also are you prepared to put all your financial cards on the table? Provide full disclosure about your financial debts, habits and expenses? Is your partner comfortable providing the same?

Is your partner willing to put your name on bank accounts or open a joint account?  Also, if the relationship does not work out and you must return home, how easily will it be for your to financially return to your former life?

Moving Abroad for Love? - Create a Financial Plan


Create a solid financial plan with a budget that includes ongoing financial obligations and unexpected expenses.  Also don’t forget to set aside funds for social activities to meet people and attend networking events if you are job searching.  

Your financial plan should also clearly outline your cash flow. Not having a solid source of income can quickly and substantially derail plans for living a global lifestyle. Also, don’t underestimate the time it might take for you to start generating income or to see your first paycheck (many countries pay salary monthly, not twice a month as is more the norm in the U.S.).

Even if you are on a company sponsored international assignment with your spouse or partner, thoroughly review the compensation package, including salary, benefits and other allowances before you both commit. As corporate expatriate packages become smaller and smaller, ask yourselves if this international move makes sense both financially and from a career standpoint as well.

 

Moving Abroad for Love? - Take Baby Steps


If possible, rent out your house or sublet your apartment when you first move overseas.  This may not only give you a source of income, but will also keep you at ease about having a home to return to if things don’t turn out the way you planned.

Investigate if you can take a leave of absence from your present job until you have found a new job and settled into your host country (most foreign countries have employment contracts with a 3-6 month probationary period before you become a permanent employee. If you take a job overseas and your relationship does not work out, you could still have a job to return to).

If you work for a global company, ask about temporarily working in the foreign office and eventually seek a permanent transfer overseas.

Perhaps this is a good time to start an entrepreneurial venture that you can manage online like writing, teaching or launching a website.

 

Moving Abroad For Love? What About The Money?

It’s February– that time of year when romance is in the air as millions of people around the world are celebrating that popular, quasi holiday – Valentine’s Day.


Living in Shanghai, I am surrounded by fellow expats from all over the world, and have met several “significant others” who have followed their partners to China. 

Unfortunately, in my decade plus years as an international banker, I have also seen financial issues kill many global romances. Lack of planning, unrealistic expectations, and failing to ask the appropriate questions can damage a global relationship.

When you move abroad for love, you won’t escape your financial obligations at home, and will no doubt experience new financial challenges in your host country. So when you move abroad for love and your finances suddenly go from Mine, Yours, to Ours - make sure you consider the following:

Conduct due diligence on your future host country

Is this country on your list of places to live in the world? Is it someplace you would live on your own if you were not in a relationship? How often have you visited the country? Have you spent any time alone, without your partner in your future host country? Given the global recession, what’s the economic situation in the country? Is it country where you will be able to easily find employment in your profession? Is it a viable country to start a new business venture? Also, develop a baseline understanding of the financial/banking system of your new host country, including international transaction fees, foreign exchange limits and possible currency restrictions.

 


Pre-Paid Cards - Features, Benefits and Caution

I hope everyone enjoyed all my tweets during my April hiatus as I pushed my research for the book into high gear.


On my last blog post I noted that Pre-Paid cards were the product du jour in financial services. Each day, I receive several emails, alerts and links offering Pre-Paid cards as either the latest financial panacea or the next cash cow for the financial services industry. 


As a seasoned bank professional who has launched a new product/service or two during my career, I have two words for Pre-Paid cards. Fees and Caution


Conduct research and do your homework. Have a clear sense of your needs for a Pre-Paid card and what the benefits and features are and if they are right for you.


Most Pre-Paid Cards offer the following Features and Benefits: 

  • Immediate approval - No Credit Check and usually No ChexSystems® verification
  • No bank account requirement
  • Online bill pay 
  • Direct deposit
  • No overdraft fees
  • Check writing 
  • Multiple options for re-loading (check, money order, cash, PayPal)
  • Mobile banking features (text and alerts)
  • Accessibility – available in several retail locations including drugstores, supermarkets and online
  • Customer service support 
  • Cash back on purchases 
  • Sign up bonus

Some fees and areas of caution for Pre-Paid cards:

  • Activation and non-usage fees – these fees can be steep and can kick in as soon as you receive the card and if you have not used it within a certain time period, usually 30 days
  • Cash withdrawals – the issuing bank may not charge a fee for banks within their chosen network, but what about ATMs outside their network? What about the ATM you are using? Do they charge a fee for withdrawals and/or balance inquires?
  • Miscellaneous Fees – lost or stolen card replacement, second card fee, enrollment fees for online banking and bill pay – these fees can eat away at your first deposit and decrease the amount available for spending
  • Restrictions on types of direct deposit accepted
  • Restrictions on payees for online banking transactions 
  • Maximums and minimums on deposits and withdrawals (make sure you know if withdrawal limits are daily, calendar day or monthly)
  • Credit Reporting Options – Pre-Paid cards are NOT credit cards, which  are reported to major credit bureaus. Some Pre-Paid cards offer credit reporting options, but make sure the reporting is to a major credit bureau that the majority of banks in the use in making credit decisions (TransUnion, Experian and Equifax

In the final blog post of this series, I will discuss Pre-Paid cards that are good for travel and living a global lifestyle.


The New Financial Product Du Jour - A Pre-Paid Card

Pre-Paid Cards - Three Part Blog Series


The newest financial product to have in your wallet is a Pre-Paid card. Certainly not a new product, it used to be the go to financial solution for people with sub-prime credit (the financial industry’s term for people with poor credit), then the gift card industry and tween market gave it a huge boost, followed by the credit crisis in 2008. 


Currently pre-paid cards have much less regulation then traditional credit and debit cards, so they are the new darlings of the financial world. 


For frequent travelers, expatriates and those living a global lifestyle, a pre-paid card is becoming a necessary travel accessory. Pre-Paid cards come with various features that range from direct deposit to online bill pay. Although heavily marketed as such, Pre-Paid cards are not credit cards.


The next blog post will highlight features and benefits of Pre-Paid Cards. 

Financial Tips For Preparing For Danger and Disaster Abroad

On Thursday an earthquake so powerful it was felt in Thailand struck Myanmar. A few hours ago, another earthquake hit the northeast coast of Japan. In Libya the battle intensifies daily. 


These events are more reminders that living a global lifestyle is not always glamorous or without danger. The events also remind us that preparation is key. Preparing yourself financially for danger and disaster while traveling and living overseas is a non-negotiable and should be the foundation of any plan to travel outside your home country.


Having a multi-currency account and insurance with a crisis response company are some financial ways you can prepare for danger and disaster. 


Read my latest article for more financial tips:

http://www.associatedcontent.com/article/7878324/5_financial_tips_to_help_travelers.html


For more financial tips, also read the expanded version: http://www.expatexchange.com/lib.cfm?articleID=3833

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