Finances are always top of mind when you’re immigrating, unless you’re in the lucky position of moving to a country with a weaker currency than the one you’re currently residing in. But any move is expensive and it’s helpful to have some tips under your belt for saving money before, during or after your big move. Here are a few ideas which will help you stretch your money a bit further.
8 expat money-saving tips
Take advantage of tax refunds
Depending on the country you’re currently residing in you may be due a tax refund under a double taxation agreement between South Africa and the tax authorities in your new jurisdiction. Moreover, you may also be able to claim tax back for time worked abroad. Finglobal.com can help you with a free assessment to establish whether you have money due to you!
The first thing to do is compare prices – even before you emigrate. Go on a Look, See and Decide (LSD) trip and see whether your prospective income will bring you the same quality of life as the country you’re currently residing in. Obvious things to compare are rentals or house prices if you’re considering buying. Sometimes rentals are the cheaper option, especially if the inflation rate is high.
If you can’t make a visit, compare prices of groceries and toiletries online. Also remember to compare the price of education if you have children. Online rental and buying sites will also give you a good idea of accommodation costs. Network in expat forums and discuss the cost of living with other expats who’ve moved to the country you’re considering.
Draw up a budget
Once you’ve compared prices, plan a budget as if you’re living in the country. See how far your prospective salary will actually go. In order to make an effective budget, take down ALL your current living costs and equate it with your new foreign currency. If you currently own a car but don’t need one in the country you’re moving to, offset petrol costs against annual commuter ticket prices.
When planning a budget, it’s important to plan to save. Put aside the amount you’re currently saving. If the cost of living is higher in the country you’re moving to – you might even want to save more than you’re currently saving!
Consider changing your lifestyle
If you’re moving to a country with a higher cost of living, you might have to consider some lifestyle changes. Living in the city is often more expensive than the outside suburbs, so look at accommodation in the areas surrounding where you will be working. Offset commuting costs against accommodation costs and see what the most affordable solution is.
If the lifestyle is simpler in the country you’re moving to – consider embracing it. For example, you may never have cycled in your life, but if you’re moving to the Netherlands it will pay you to take it up. 31.2% of all the people in the Netherlands list their bike as their main mode of transport for daily activities – it’s a popular and cheap way to commute and it will help you assimilate more quickly into the local way of doing things.
Reinvest your retirement savings abroad
As a South African expat, you’re well within your rights to encash your pension, provident or preservation funds or your retirement annuities and transfer the funds abroad. Though the requirements for transferring retirement funds and annuities differ slightly, you could benefit greatly from reinvesting these funds offshore and, should you return to South Africa one day, your retirement income may be tax-free.
You’ll be surprised to discover that many first world societies have prolific second-hand stores where you can buy anything and everything you need from IT hardware to kitchen goods and clothes. A symptom of the first world “throw away” society, second-hand stores are a great place for expats to plunder when they’re setting up home.
Countries like Australia even have regular “removal” days when homes in the neighbourhood can place unwanted electronics or furnishings on the street and the council removes the goods off to the local garbage dumps. A quick “drive by” before this happens can score you some wonderful things in great condition.
Shop like a local
Once you’ve arrived, chat to local expats and neighbours and find out where the most affordable shops are. Many ‘expat’ shopping areas can be particularly expensive – especially if they’re providing you with longed-for goodies from “home”. It is far cheaper to shop and eat where the locals do and before you know it, you’ll have discovered local treats that quickly take the place of marmite and boerewors (or maybe not).
Don’t forget your retirement and investment policies
Once settled in abroad, many expats forget about policies with insurers in South Africa, but in many cases you can convert these to cash which you can invest in local currency in your new home country or use to help get yourself established. For example not many people know that because of a change to tax legislation in 2008 it’s now possible to surrender a retirement annuity. Talk to us about your options and we’ll make sure you follow the right route for transferring your funds abroad.
Contact finglobal.com for sound advice
Need help with any other cross-border financial concerns? Finglobal.com is the no.1 provider of cross-border financial services to South African expats.
We can assist you with fund transfers, tax advice and returns, international financial planning, opening and closing of bank accounts, policy searches and amendments and foreign exchange. Just leave your details and we’ll help you on the path to financial freedom in your new home.