The First Thing You Should Do With Your Paycheck When Living Abroad
Written by
Cindy Lamothe
Edited by
Amen Oyiboke
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
If you’re one of the lucky ones who gets paid while living abroad — there are some steps you need to take when you get that first paycheck.
While sipping piña coladas on the beach might be your first impulse, overlooking these steps could mean the difference between enjoying your time overseas or stressing over finances.
Here’s what experts recommend you should do with your paycheck while living abroad.
Start With Local Banking Logistics
“In my experience working with clients who’ve lived or worked abroad, the very first thing you should do with your paycheck is ensure you have access to a local bank account in your country of residence,” advised Shirley Mueller, finance expert and founder of VA Loans Texas.
She said this makes managing your money much easier, as you’ll avoid unnecessary fees or delays that often come with relying on a home-country bank.
“Make sure the account allows for easy currency exchange and low transaction fees, especially if you need to send money back home or maintain obligations in your home country,” she said.
Setting this up is a crucial first step, it’s not just about convenience but about minimizing costs and ensuring your funds are accessible.
Establish a Budget for Two Economies
Once your paycheck hits your account, Mueller explained that creating a budget tailored to both your host country’s cost of living and any financial commitments you may have back home is key.
“Living abroad often means managing expenses in two economies, which can get tricky without a clear plan.”
She advised prioritizing essentials like rent, utilities, and food while considering exchange rate fluctuations that could impact your spending power.
“I’ve worked with expats who overlooked this and found themselves overspending because they didn’t fully account for how currency values or local price trends affect their finances.”
Automating savings, she noted, both in local currency and in your home country, can be a helpful way to stay on track while building long-term security.
Don’t Overlook Tax Obligations and Retirement Contributions
It’s also important to understand your tax obligations in both your host country and your home country.
“Many expats forget that they might still owe taxes back home, depending on where they’re from,” said Mueller. “I always advise clients to allocate part of their paycheck toward taxes or consult a cross-border tax specialist early on … Don’t let your retirement contributions slip while living abroad.”
Whether it’s contributing to an international retirement plan or sending funds back to a home-based account, she said staying consistent is critical for your long-term financial health.
“Neglecting this can lead to gaps in savings, which I’ve seen clients regret once they return home or near retirement age.”
Being proactive with these steps ensures you’re not just living comfortably abroad but setting yourself up for success in the future.
More From GOBankingRates
