I recently spoke to Finder’s Sally McMullen, host of the Pocket Money Podcast, for her top tips on the finances you need to arrange before you move overseas for work.
Stockspot clients love to travel and work abroad. We regularly hear from clients who are moving overseas for work, asking us about their investments. Everyone’s situation is different depending on the country you’re moving to and how long you’ll be gone.
We can advise on what’s best for your Stockspot investments (just email or call us), however there are other things you need to consider when you’re heading overseas for work.
According to the Government’s Smart Traveler website there are 1 million Australians living and working overseas at anyone time. That’s about 4% of our population! So we thought we’d share Sally’s top tips with everyone:
Sally McMullen
There are many reasons why you may be packing up your life and moving overseas. As well as figuring out your housing and employment, organising your funds should be at the top of your to-do list before you jump on the plane.
If you’re not sure where to start, here are five tips to help you get your money sorted for your trip.
- Research your local bank ahead of time
- Know the local tax laws
- Make sure your investments are working for you
- Use a money transfer service
- Monitor your accounts back home
1. Research your local bank ahead of time
Before you leave, spend some time researching local banks to decide how you want to manage and access your money. The options will vary depending on where you’re travelling, but you can usually open a basic transaction account if you’re a temporary resident living overseas.
You’ll be required to provide proof of identification and approved residency status to apply. Just make sure to check what the eligibility requirements are before you try to sign up.
Depending on your needs and how long you’re living abroad, you may want to open a savings account as well as a transaction account. You can use comparison services, check expat forums and social media groups to compare your options and seek advice regarding which bank to choose.
You could also consider comparing Australian-issued multi-currency accounts to use overseas. This could be especially useful if you’re travelling and living in more than one country.
These cards also don’t charge foreign transaction fees when you’re spending overseas, which will help you save compared to if you’re using a regular Australian-issued transaction account.
You can start comparing international transaction accounts and learn more about how they work in Finder’s guide to offshore accounts.
If you’re using an Australian-issued account, don’t forget to inform your existing bank and credit issuers you’re going overseas and for how long. Otherwise, your account may be locked if you use it to shop abroad.
2. Know the local tax laws (as well as the Australian ones)
If you’re going overseas to work but will remain an Australian resident, you’ll need to lodge an overseas tax return and declare your foreign employment income.
You can lodge your return online from overseas and will need to declare your income even if you were taxed in the country where you’re working. You can check out the ATO’s guide to moving overseas for more tips.
As well as sorting out how you’ll lodge your claim to the ATO, you should research the local tax rates for the country you’re travelling to as these will vary as well.
You may need to pay tax if you’re living and working for a certain number of days in the tax year, so you’ll need to check what the specific regulations are before you leave.
3. Make sure your investments are working for you (compounding while you’re away)
If you have investments in Australia or overseas, don’t forget to monitor them and make sure they’re still growing while you’re away.
If you want to make sure your investment is ticking along without spending too much time managing your portfolio while you’re overseas, you could consider investing on autopilot.
This means if you don’t have the time to manage your own investments, you can use automated investment services like Stockspot instead. This is a low-cost option that can help you build a diversified portfolio sooner without the time and risk that can come with doing it yourself.
You also won’t have to fork out for costs like brokerage fees and can let a professional do the hard work for you while you’re overseas.
4. Use a money transfer service
If you need to send money before you leave or while you’re overseas, you could consider a money transfer service. You can send money securely between online bank accounts or pick up the cash in-store in some cases.
Services like OzForex and Transferwise offer money transfers in over 45 currencies and usually only take 1 to 2 days to go through.
There are plenty of options to choose from, so it’s important to consider the available currencies, how much money you can send and any fees that’ll apply.
You can compare exchange rates online and some services offer a best-rate guarantee if you’re on the lookout for the most competitive deal.
5. Monitor your accounts back home
While you may be regularly checking your new overseas accounts while you’re residing overseas, it’s important to continue keeping an eye on your accounts in Australia. This includes your transaction, savings, credit cards and superannuation accounts.
That way if you spot any suspicious transactions or incorrect information in your account, you can contact your provider as soon as possible to clear it up and avoid any nasty surprises when you return home.
These are just five of the ways you can stay on top of your finances when you’re living abroad.
Don’t forget there are other important things to stay on top of when if you move overseas for work like travel insurance, voting in elections and making sure you have the right visas. A little research now, can help avoid sticky situations in the future! Happy travels.
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