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Living abroad: the key steps for managing your finances

Living an international lifestyle creates a whole world of new opportunities. Enhanced career prospects or better pay and benefits are among the main reasons for moving abroad.

Published: 5 August 2020 10:00 CEST
Living abroad: the key steps for managing your finances
Photo: Getty

But new opportunities don’t come without challenges. Embracing your freedom to live abroad or across borders could make it harder to plan a path towards financial freedom.

While your language skills and cultural norms may inevitably become caught between places, personal finance is one area you can keep control of. The Local, in partnership with Barclays International Banking, presents the key steps to building a more secure future – no matter where you call home.

Start planning your future today: find out if you qualify for Barclays International Banking 

Digital banking: track your day-to-day outgoings

From same-day deliveries to social media, we live in an age of instant gratification. But when it comes to money, it makes sense to plan for the future.

You can start by ensuring you have a complete view of your finances right now. That may be easier said than done, however, if you use multiple accounts and cards issued in different countries.

Doing all your digital banking in one place could help you better understand your outgoings. If the cost of living in your new location is high, you want to avoid the trap of splurging all your income. If it’s lower than you’re used to, you could make that count by setting some of your salary aside in a savings or investment account.

Currency exchange: be flexible, move fast

You don’t have to be a forex trader to win or lose big on currency fluctuations. If you’re planning a life abroad, the question of how and when to transfer money deserves some serious thought.

This is especially true if transferring large sums because, for instance, you want to buy a property or perhaps close a savings account. Even with smaller transfers, you can make the money work for you by thinking ahead and being flexible about when you trade.

You may want to set an alert for your target exchange rate in a foreign exchange app so you don't miss a favourable market movement. Knowing exactly how you’ll make a transfer is also crucial. Barclays International Banking's foreign exchange service allows you to trade in multiple currencies – with rates that get better, the more you convert.

Savings & Investments: select your strategy

Living internationally requires you to grow as a person. But what if negotiating culture shock and red tape deprives you of the mental energy needed to grow your savings?

Try not to get overwhelmed by having money in more than one country. Think about what matters to you and select a strategy to match your goals. 

Start simple: for instance, save a fixed percentage of your income each month – and use automated transfers so it’s done before you can spend it!

If you’re investing, consider the risk-reward ratio and pick a strategy. Maximising long-term growth to fund an early retirement is very different from seeking safe, regular returns to support you and your family as you set up a new business.  

Find out today how Barclays International Banking can support your international lifestyle

Property & Family: trust matters 

Few decisions shape your life more than buying a home. If you’re discussing your future with a partner, you need to plan ahead wherever possible. Your dream home won’t come cheap. Nor will any kids!

Photo: Getty

In many countries, you still have the chance of securing a mortgage with a fixed, long-term low interest rate. But if you’re new to a place, take time to understand the local conditions – asking a few locals what they consider to be a good deal might offer valuable insights.

If your thoughts are turning to your legacy, you may want to take professional advice on estate planning and local inheritance laws. Trust is key when it comes to the more personal aspects of personal finance.

Tax & Pensions: pay attention not penalties

As an international resident, you’ve almost certainly attracted the attention of more than one tax authority. So, make sure you know exactly where you’re liable to pay tax.

If you’re an employee abroad, the hard work may be done for you with tax deducted from your salary each month. But if you’re self-employed, plan for the tax bills to come – and how they’ll differ from what you’d pay in your home country. 

Some workers, such as cross-border commuters or those on temporary postings, could be at risk of double taxation. Check any rules you’re not sure of with the relevant tax authority to avoid waking up at 3am in a cold sweat. 

You may also want to check the legal retirement age in your adopted country. Want to consolidate your pension? Look into official transfer schemes, such as the qualifying recognised overseas pension scheme (QROPS) for people who want to move UK savings abroad.

Barclays has been managing clients’ money for more than 330 years and has regional expertise across the globe. Click here to find out how Barclays International Banking can help you move towards all your financial goals, wherever life takes you.

 

FAMILY

Babies wanted: Nordic countries crying out for kids

The Nordic countries were long a bastion of strong fertility rates, but that is no longer the case on an Old Continent that is rapidly getting older.

Published: 17 January 2019 09:24 CET
Babies wanted: Nordic countries crying out for kids
Photo: 06photo/Depositphotos

“Norway needs more children! I don't think I need to tell anyone how this is done,” Norway's prime minister Erna Solberg said cheekily, but she was raising a real concern.

Too few babies are being born in the Nordic region.

The Nordic countries once boasted strong fertility rates, but they are now experiencing a decline that could threaten the Scandinavian social welfare model, according to the Norwegian PM.

“In the coming decades, we will encounter problems with this model,” Solberg, a conservative, warned Norwegians in her New Year's speech.

“There will be fewer young people to bear the increasingly heavy burden of the welfare state.”

In Norway, Finland and Iceland, birth rates dropped to historic lows in 2017, with 1.49 to 1.71 children born per woman. Just a few years earlier, their birth rates hovered close to the 2.1 level required for their populations to remain stable.

“In all of the Nordic countries, birth rates started dropping in the years after the 2008 financial crisis,” University of Oslo sociologist Trude Lappegård told AFP.

“The crisis is over now but it's still falling.”

From Copenhagen to the North Cape, from Helsinki to Reykjavik, demographics across the Nordics reveal two things: there are fewer large families, and women are waiting longer before having their first child.

There's no single explanation, but financial uncertainty and a sharp rise in housing costs are seen as likely factors.

In the long term, this means there will be fewer people of working age to pay taxes that fund the generous state welfare systems.

These systems pay for, among other things, lengthy parental leaves, which in Sweden can last up to 480 days.

Experts present differing diagnoses and prescriptions to remedy the situation.

In Norway, one economist concerned about the effect the slowing demographics will have on economic growth has suggested giving women 500,000 kroner (50,000 euros) in pension savings for each child born.

Another has suggested that, on the contrary, women in Norway who reach the age of 50 without having had a child should be paid one million kroner, since children also cost society a lot.

READ ALSO: Swedish blogger films her entire childbirth and puts it on YouTube

Finnish municipalities have already decided to loosen their purse strings to encourage locals to get busy under the covers.

The town of Miehikkälä, home to 2,000 people, is offering 10,000 euros for each baby born and raised in the municipality.

“The number of childless individuals is growing rapidly, and the number of women having three or more children is going down. This kind of fall is unheard of in modern times in Finland,” said Anna Rotkirch, a family sociologist at the umbrella organisation Finnish Family Federation.

In Denmark, Copenhagen has meanwhile turned its attention to men, who are in less of a hurry to become parents than women, with a campaign aimed at raising awareness about how sperm quality declines with age.

The Nordic region already boasts a wealth of family-friendly initiatives, such as flexible working hours, a vast network of affordable daycares and generous parental leave systems.

But when all that is still not enough to encourage people to have more children, immigration can be a lifeline — or a threat, depending on the point of view.

Sweden may have a falling birth rate, but it still comes in second in the EU behind France with 1.85 children born per woman in 2016.

That is partly due to Sweden's decades-long history of immigration: women with immigrant backgrounds tend to have more children than the average Swede.

With 2.6 children per woman in recent years, the town of Aneby in southern Sweden has one of the highest rates in the country, a phenomenon which may be connected to the fact that it opened its doors to immigrants two decades ago.

“Aneby welcomed around 225 Eritreans in the early 1990s and just after that (it took in) refugees from the Balkans. 1994 was a demographic record for the town,” local official Ola Gustafsson told AFP.

But population growth among minorities has also fuelled fears.

A former justice minister in Norway, Per-Willy Amundsen of the populist right-wing Progress Party, made headlines when he called for family allowances to be reduced after a third child.

His stated goal was to stop Somalis who, he said, had a higher “birth production” rate than “ethnic Norwegians”.

READ ALSO: Copenhagen to men: how’s your sperm?