Expatriate Financial Planning

Financial planning is a comprehensive evaluation of your current financial situation and putting a plan together to reach your financial goals. Ultimately it means getting your finances in order and involves putting a plan together that includes other financial products and services

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What is financial planning?

Expat financial planning is tailored to meet the needs of expats when they leave their country of birth. Ultimately it’s about putting the right money, in the right place, at the right time.

Financial planning is an effective way of arranging your assets but these assets need looking after. It’s not uncommon for expats to have assets in different countries, but this has implications. You will need to address complex tax issues that stem from having assets in different countries.

Expat financial planning means getting your financial ducks in a row in foreign as well as domestic waters. But there’s more to it: you must never lose sight of the goals that your expat financial plan supports – your life goals.

For most expats, working abroad is ultimately about securing a nest egg for retirement, maybe even to retire early. Balancing your financial goals and enjoying life as an expat can be difficult which is why financial planning is so important.

Your practical financial planning should begin by writing down your life goals. Give your plan a focus that is clear and realistic – get down to the nitty-gritty of what you need your financial plan to support.

A big part of your plan will then be investment planning. Investing means making your money grow by putting it aside for a time in what is known as an “investment vehicle”, and this usually involves some level of risk.

Financial planning means looking at all areas of your finances. This includes any debt you may have.

Cross-border tax will be another thing to consider for expats in their financial plan. With of products to consider such as mortgages and insurance, there’s a lot to plan. That’s why the help of a professional adviser is so often sought: with expat financial planning, experience helps.

The importance of financial planning as an expat

Many expats have a similar goal. To make as much money as possible somewhere sunny and retire at home on the proceeds.

Unfortunately, it rarely happens like that. It’s easy for expats to lose track of their goals, living for the moment and enjoying large amounts of disposable income. Before you know it the original financial plan of returning home with a retirement nest egg has taken a back seat.

If this is you, you’re not alone. A study by trade body the Pensions and Lifetime Savings Association (PLSA) found that only one in five believe they are on track with their retirement savings.

Seizing the day and hoping that tomorrow never comes is a global expat phenomenon. However, there’s plenty of expats who are looking beyond tomorrow. Those expats are creating long-term plans that serve their life goals as well as delivers financial opportunities only available to an expat.

However, there’s plenty of expats who are looking beyond tomorrow. Those expats are creating long-term plans that serve their life goals as well as delivering financial opportunities only available to an expat.

Ultimately, planning your finances in this way brings peace of mind. It’s what you want for your family, and it’s what professional financial planning delivers.

Financial planning for living abroad

Financial planning is essential if you want to make the most of your money in the long-term.

If you are planning to be an expat, you need to think long-term. A good expat financial plan should centre on the most distant life goal of all; which is to pass on your financial legacy to your loved ones.

Writing a will should be the focus of your financial plan as an expat. This will ensure that your legacy goes to the people that matter the most.

But what about the short-term? If you are planning to move abroad to work – and maybe even retire – you are going to need to build up an emergency fund.

An emergency fund is there to get you out of trouble if a disaster of any kind strikes while you and your family go through the process of emigrating. Make this your short-term priority. Hopefully, you will never need it but having £5k-£10k stashed away in a separate account will provide security.

Your emergency fund should be separate from the funds you have saved to pay for your move abroad, and your immediate outgoings.

When it comes to financial planning for living abroad, the sooner you start saving the better. Make it a priority to put together a robust expat financial plan for you and your family.

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