Your money and the cost of living
As an expert or even as a potential expat you will know that along with all the other things you also have to think about when you are setting up in a different country the impact of a change in the cost of living can make a big difference. Climate, salary and social life are all important aspects of a successful stay but making sure you have control over your living expenses is vital.
According to the survey by the World Bank, food, housing, energy and healthcare costs continue to account for as much as 89% of annual spending, regardless of your location. Its therefore vital that your day to day financial planning takes this into account, regardless of whether your employed, self-employed, looking for work in your new location or even retired or retiring.
Calculate what you will need in advance
If you are planning a move know how much money you will require to have an equivalent lifestyle to one you currently have.
This will help you to negotiate your salary better, gauge comparisons in the housing market and give you the sense of what general living expenses are like.
And don’t forget that there may be one off costs associated with setting up such as buying a house or a car which may take time to even out once the honeymoon period is over.
Consider the Medical Insurance and the education
Healthcare is something that should also not be overlooked. If you have relocated with your job then you may be entitled to receive medical cover provided as part of your employers benefit package. If not and if there is no reciprocal agreement between your home country and the country in which you settle then you may need to take out the own medical insurance.
Some employers may pay for your children to be educated at private schools (particularly in countries where state education is limited). But in situations where private school fees are paid, you will probably still face additional costs. "International schools tend to have significant extracurricular programmes," says Rupert Morley, CEO of Sterling Relocation, a provider of global relocation services. He also points out that "if a child is left at school [in their home country] there is the cost of boarding, as well as the issue of flying to join the family at the end of each term."
Think of small additions
Other additional living costs may include employing a driver and the domestic staff where relevant and joining certain clubs to participate in expat social or business life.
And then there is the cost of maintaining assets based in your native country .If your house is let out for example management fees will need to be paid to a letting agent.
Negotiate the most suitable remuneration package if moving with your job.
If you are moving with your job you may be lucky enough to have benefits provided by your employer to help pay for additional expenses, but relocation experts say such perks have been cut back in recent years in responses to the economic downturn.
The most common form of remuneration package for expats is known as the build up or the home approach.
This means that the salary in your host country matches the salary you were getting in your native country, or a job of equivalent value if it were done in your home country. Various allowances and benefits may be added to your base salary, which could result in you being significantly better off if the cost of living in your host country is substantially lower than your home country.
However, not all companies offer such a generous salary package. Josephine Woolley, PR manager at ECA International, which advises companies on employee relocation and benefits, says some companies "prefer to offer remuneration that reflects the market rate of the host country", although the employer may add benefits.
"Companies typically provide a cost of living allowance to ensure purchasing power is maintained when an employee is sent to work elsewhere in the world so that they do not lose out," adds Woolley. This allowance will typically take into account exchange rates and inflation. Again, if you're moving as an employee your company may provide financial advice, but it's still a good idea for all expats to get expert advice of their own, to help them budget for living costs in a new country and manage their finances successfully.