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Expert Tips for Expatriates to Manage their Money Abroad

U.S. Dollars must last for expatriates

Among the biggest challenges for expatriates is managing finances while living overseas. Expats must deal with the ever changing exchange rate, inflation, varying interest rates, and unfamiliar banking rules. In addition, economists predict that the U.S. dollar may fluctuate wildly based upon current events, worldwide labor costs, and automation against many of the world’s major currencies for several years to come. Economic uncertainly makes it even more important to manage your funds wisely if you plan on living overseas.

For short overseas stays of up to six months, there are less options to maximize your purchasing power. With thousands of ATMs in almost every corner of the globe, the most economical way to get money while living overseas for a short time is to use your debit card, drawing funds directly from your U.S. account. Mastercard/Eurocard/Cirrus, Maestro, Visa/Plus, Visa Electron, and American Express cards are accepted at almost every ATM around the world. Compared to exchanging cash, ATM withdrawals have the advantage that you can withdraw funds 24 hours a day at most locations and you may get a better exchange rate than for cash (though that really varies country-by-country as the dollar is valued as a stable currency). Debit cards with the Visa or Mastercard logo can also be used for purchases just like credit cards, but they don’t generally offer the same purchase protection against theft or fraud. On the other hand, most U.S. credit card companies charge a small but ever-growing percentage for overseas purchases, which can start to really add up for large purchases or a long-term overseas stay. Make sure you use the best credit card to manage international interchange fees.

If you exchange cash regularly, keep in mind that banks and exchange houses charge widely ranging commissions for exchanging currency. Exchange houses are often difficult to find in remote locations, therefore I urge you to always carry some cash on you hidden in one or more locations of your clothing, often best done using undercover hidden pockets. Money wires from home are another backup solution, but bank transfer fees are often high and can be time-consuming to perform. Money transfer services such as Western Union offer money transfers for a lower but still largely excessive fee, but with agent locations worldwide for convenient pickup of funds (usually paid out in the local currency).

As a general rule, we recommend that you avoid changing money on the street even if you are an experienced traveler or expatriate. You may get a much better rate, but you are taking the risk of being ripped off if the area is unfamiliar. Experienced travelers or expats often will learn who they can trust to make such currency exchanges on the streets. But in some countries this is also illegal, and could result in everything from harassment by authorities, to fines, to deportation, or even prison. Don't risk it no matter how tempting.

Where to Keep Your Money Abroad

If you are going overseas for an extended period of time, up to a year or longer, making informed financial decisions can save you a lot of money. Research the financial policies of your host country, and investigate the stability of the local economy and the currency. Has there been a large-scale devaluation of the currency, or has there been a high rate of inflation? How stable is the currency against the U.S. dollar and other major currencies? If the country has economic or financial problems, keeping large amounts of money in the local currency may not be a good idea. There are natives in some countries who do not even keep cash in their own currency due to inflation. The more you know about the local banking system’s rules and regulations, the easier it will be to make the right choices for your financial needs abroad. If you have overseas income or a stipend, it makes sense to open a local bank account. Your money is safer at a bank, and you can easily access your funds at bank machines. If you depend on savings in the U.S. during your stay abroad, you might want to consider transferring some of your money to a local bank account. You may earn a much higher interest rate than in the U.S., and if the local currency is stable you can expect it to stay strong against the weakening dollar, which will also save you money in the long run.

Some countries have liberal banking policies to invite foreign investments regardless of immigration status, and they freely issue tax identification cards to foreigners and allow them to open bank accounts. Most countries, however, require a permanent or temporary residency permit in addition to a tax identification card and proof of address to open a local bank account. This could be a student, missionary, retirement, employment or volunteer visa, for example. Once you have decided to open a bank account in your host country, find out how much banks charge for checks, overdrawn amounts, ATM withdrawals, etc. Some banks in developing countries and tax havens offer savings accounts in foreign currencies, including ATM withdrawals in U.S. dollars.

For More Info

Sample Worldwide Banks

  • BNP Parisbas
  • Banco Santander
  • JPMorgan Chase
  • Citibank
  • HSBC Bank
  • Barclays
  • Bank of America
  • UBS

Here are some general resources that may help you manage your money overseas:

Location of ATM's Around the World

American Express ATM Locator lists ATMs around the world where American Express cards are accepted.

Mastercard/Maestro/Cirrus Global ATM Locator, provides Mastercard/Maestro/Cirrus ATM locations for most countries.

Visa/Plus Global ATM Locator lists Visa/Plus Automated Teller Machines in most countries worldwide.

Payment Transfer Methods

Western Union allows you to send money abroad for pickup at worldwide Western Union agents. internet money transfers are also available for some countries. Large fees per transaction!

Paypal allows you to send internet money transfers to 190 countries and regions and send, receive, and withdraw in many others.

Related Topics
Living Abroad and Expatriate Resources
Money Matters Abroad

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