How To Get Your Financial Life in Order If You’ll Be Spending Weeks or Months Overseas

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The idea of living overseas, even for a short period of time, is a dream of many Americans. Between the rise of remote work and the affordability of many foreign destinations, even longer-term stays are on the rise. But if you’re considering spending weeks, months or even years overseas, you’ll want to get your financial house in order first.

Here are some steps you should take to make sure that money concerns are the last thing on your mind when you’re enjoying your time abroad.

Decide Where Your Financial Home Will Be

If you’re only traveling for a few weeks, it might make sense to simply leave your bank accounts as they are, domiciled in the U.S. However, if you’re going to be overseas for an extended period — particularly if you are going to be working overseas — you’ll probably want to apply for a local bank account.

This way, you can easily accept payments in your local currency and have ready access or assistance at a neighborhood branch.

Of course, there are a lot of variables that go into this decision, and you’ll have to do some research before you choose. If you’re in an underbanked country, for example, it might be more hassle than it is worth to try to deal with local financial systems.

But many countries are now fully equipped to help expats, remote workers or even tourists set up local bank accounts, and this can make life a lot more convenient for you.

Choose the Right Bank Account

Just as when you open any financial account, you’ll want to choose the ones that best suit your individual needs. For example, it’s great if an online account offers a high-yield savings account, but if you don’t plan to keep a lot of money in cash or if you need the services of a brick-and-mortar branch, that account will essentially be useless for you.

If you’re like most overseas travelers, you’ll want an account with low fees, easy international transfer capacity, a user-friendly mobile app, high exchange rates and no-fee international ATM withdrawals. However, you should tailor this wish list to your specific needs.

Understand Foreign Income Tax Rules

If you keep an investment account overseas, or even a simple savings account, you may have to report the income on your U.S. taxes. You may also have to file and pay taxes in the country where you’re temporarily residing, although you can generally get a credit for taxes paid if and when you file your U.S. taxes.

You may also have to file various forms with the U.S. government if you have a foreign bank account, particularly if your balance is over $10,000 or $50,000. As foreign income and tax reporting laws can get complicated, you may want to consult with a tax advisor if you’re planning on spending a considerable amount of time overseas, particularly if you will earn income or accumulate a significant amount of assets.

Set a Budget

If you’re living overseas for any amount of time, it’s all but inevitable that some exciting opportunities will pop up that could stretch your original budget.

To avoid this problem, build in a contingency and/or emergency fund to your travel budget. This can help you avoid overspending while still allowing you to enjoy spontaneous pleasures.

Notify Your Banks, Including Credit Cards

Your bank may block some of your transactions if they’re out of your normal pattern of spending. This is particularly true if you live in, say, Chicago and suddenly buy a $1,000 TV in Switzerland.

As that can be inconvenient at best and problematic at worst, it’s usually a good idea to notify your banks that you will be traveling overseas for an extended period of time.

Designate Someone To Handle Your Affairs at Home

Unless you’re intending to completely abandon the United States and never return, life will continue to go on there for you. Bills will still come due, the mail will still get delivered, and you’ll still get summoned for jury duty.

To handle all of these situations, you’ll need to put someone in charge of handling the things you physically can’t while you’re out of the country. Ideally, this will be a close friend or relative, but there are also services that can do things like take pictures of your bills or important notices and email them to you, so you can handle them online or via the phone while overseas.

Verify Your Medical Insurance Will Cover You — or Get Some That Will

One of the greatest concerns for those traveling is insurance. Most American insurance policies won’t cover injuries you sustain overseas, except perhaps some short-term emergency funding. And even if you have a good policy that covers you while you travel, you’ll often have to pay in cash upfront and then wait for insurance company reimbursement.

This is why it’s often a good idea to get dedicated travel insurance for your overseas adventures. There’s a wide variety of international travel policies, so you’ll have to do your research to find one that covers things that you need, such as pre-existing conditions.

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