Moving to a new country brings with it a host of decisions. You’re constantly in new situations and there are many factors to take into account. Here are some mistakes expats make upon arriving in their new country of residence.
But first, we’ve written these blogs about moving to and living in Israel which you may enjoy.
And now let’s get into the blog!
#1 Taking advice from websites or Facebook groups as opposed to professionals.
I have said this before – it is a good idea to ask for a recommendation for a dog sitter or a good local pizza takeout online. However, this should not extend for requesting advice on professional legal, and/or financial matters.
There is no way to verify the credibility of the source. Much of the advice on expat websites is inaccurate or not relevant. I have seen some people who are looking to make Aliyah to Haifa Israel, for example, who open their own Facebook group in the hope of drafting a community of people who can give free advice.
#2 Not getting advice from the locals
We have encountered some expats who make the mistake of being “do it yourselfers “ and refusing to get recommendations on local service people from the local community. When moving to a new place, go visit the mayor or a senior city official. They may explain to you how things work and also recommend good local service providers such as electricians, plumbers and handymen.
#3 Not using the local banking system
It’s common for people to overlook how the local banking system works and in some cases to even refrain from setting up a local bank account. I have encountered some people who trade and barter with other Americans and transact online with credit cards. They insist on using their American ATM cards to access local currency, often at exorbitant exchange rates.
#4 Not doing the research
It is a common expat mistake to not do sufficient research upfront prior to moving – understanding matters, learning the new healthcare system, etc. For example, in Israel we always recommend that people take out supplemental private health insurance to cover items that may not be covered by their HMO. Without taking the time to acquaint yourself about how processes work, you wouldn’t understand the need to do that, and would miss out.
#5 Not creating a budget
Not taking care of money matters and budgeting for the first year prior to moving is a mistake that many expats make.
Moving to another country creates a plethora of life changes, many of which impact your finances. The confusion can be reduced by putting together a plan that tracks your major assets, liabilities, income sources, expenses, etc.
It’s important to have a financial roadmap, and when you are moving to a new country you don’t want to make the mistake of failing to understand cost of living differences.
Some things are cheaper and some more expensive – see our blog on the cost of living in Israel vs. the US. It is a wise move to learn from the locals, either in person or even in an online forum. Find out where it is cheaper to shop, how to use coupons locally, and even how to join shopper reward programs that save a lot of money.
#6 Ignoring tax compliance requirements
Many people fear the tax authorities, while others take a more cavalier view. We’re always surprised when we see expats make the mistake of ignoring the fact that one still has to file a US tax return once moving overseas – even if you do not derive any US income. There are also annual disclosure requirements such as FBAR, and in some cases FATCA that need to be filed.
#7 Not learning the language
Yes, most locals may speak English, but things happen in the local language so why miss out!
Get it right the first time and avoid expat mistakes!
While it’s true that there’s a litany of mistakes that expats make, you don’t have to be one of the people!
We are expat financial advisors located in Israel and the US, serving expats globally.
If you are moving to Israel or another country and don’t know where to start when it comes to the financial side of things, or hold US or foreign assets and need help figuring out your retirement as an expat, please contact us.
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