If you have a case of wanderlust, the expenses of international travel can add up quickly. Have a financial plan.
Before heading out, make a plan
Though you’re no doubt itching to throw your cares to the wind and hit the road, one of the best things you can do is free yourself of financial obligations before leaving. Debts like college loans and credit card bills can quickly add up to not only high monthly payments, but also fees and interest for missed payments while you’re abroad.
Don’t know where to begin paying down your debt? Check out our guide to covering debts big and small.
If you don’t have enough money to immediately go abroad, consider researching loan forgiveness. If you’ve made regular payments and work in certain areas, explore whether you qualify the Public Service Loan Forgiveness program.
If credit card debt is weighing you down, debt consolidation may be a way to pay down more of your bills and reduce interest.
Track those taxes
Are you spending an extended amount of time in another country? Before hitting the road, research the laws regarding taxation at your destination.
If you work in another country, you could be considered a temporary resident. This means you’ll pay taxes on all income earned abroad, leaving you with a huge surprise bill at the end of the year if you don’t know what’s expected.
For instance, many European countries consider travelers temporary residents if they spend as little as 180 days in the country. Other countries will charge taxes on income earned up until 300 days of residency in one year.
Reach out to expats in your destination who work abroad, or seek professional assistance to be sure you’re covered.
Catch up on banking abroad
Banking can be a daunting part of traveling abroad. Even the smallest problem with your account could put your plans on hold.
Before you leave the country, notify your bank so they know your card hasn’t been compromised when the charges begin rolling in.
Some banks require that you keep a minimum account balance or make regular transactions to be in good standing, which could mean paying large fees on your purchases. Be sure to check your bank’s policies before going abroad, and consider switching to another banking service if you are unable to mitigate fees.
If you plan on living abroad for a year or more and will work while traveling, consider setting up an international bank account. It’ll make everyday banking and tax time that much easier.
When weighing international bank accounts, note fund protection and insurance, easy access to your money, low international fees when depositing or withdrawing abroad and simple options for transferring among international accounts.
Ease your way back into the workforce after a stint abroad
Be wary of fees and exchange rates
If you’re a freelancer or independent contractor and plan to work while traveling, don’t underestimate the fees that come along with billing clients and collecting payments between borders.
The popular digital payment giant PayPal both levies a transfer fee for international transaction and converts currencies using a weaker exchange rate than you’ll find with an independent money transfer service.
Compare your money transfer service options against your individual needs. Especially if you plan on sending money back to the US. Check out a complete comparison chart of the most-used money transfer services here.
Money transfer services for the world traveler
Save money on your personal or business international money transfer today. Fill in the form and you’ll be contacted by a foreign exchange expert to have an obligation-free discussion about your options.
With over 17 years of foreign exchange expertise and over $100 billion transferred, OFX can help with all your currency exchange needs, including:
- Buying property abroad
- Regular overseas payments
- Risk management
- If the provider quotes a different rate to the one above please let us know
Avoid being a traveler who’s had to come home before they were ready due to improper financial planning. Doing some research ahead of time will ease the risk of losing a grip on your finances while you lose yourself in the adventures of traveling abroad.