Whether you’re relocating for studies or work, there’s no getting around the necessary relocation expenses involved. So what are the financial costs to expect when you move abroad?
Photo by Oleksandr Pidvalnyi on Pexels.com
How can you prepare financially for a new life in your new country? Keep reading to find out six financial costs to expect when you move abroad.
1. Relocation Cost
It would be best if you first considered the cost of moving yourself, your family, and your belongings to a new country. The cost of relocating is the first cost you must consider before getting to your new country and earning money.
Your relocation cost will come majorly from the money you already have, your savings, and the money you put aside.
Relocation costs are usually high because you must apply for visas, ship your luggage if you’re coming with family, and pay for your flight ticket. It also includes the cost of health checks.
Some countries like Canada and the UK require you to carry out health checks like tuberculosis checks and Covid tests before relocating.
You will need to pay wherever you are because your insurance will likely not cover these things.
If you are moving to a country that requires a work visa or a work permit, you would have to factor in visa cost. However, you may be lucky to find a new employer that would cover those visa costs. If you are moving with your family, you should prepare for the cost of their visas.
Some countries will require you to have a certain amount in your account to show that you will not be a burden to the government or system when you arrive in your new home.
You will pay the visa fees to the embassy or authorities of the new country.
2. Cost of Living
You need to research if you are moving to a more expensive country than the one you are in now and how much it will cost you to get accommodation in the new country.
Cost of living includes utility bills and whether your employer would pay you monthly, quarterly, or annually.
When you arrive in your new country, where will you live and how much will that cost you? It would help if you also found out what it would cost to rent a one, two, or three-bedroom apartment in different neighborhoods. You can get a flat share if you are a student or alone.
For many people moving from Africa to places like the UK, US, or Canada, you will experience a higher cost of living. In addition, the currency exchange may not be favorable because the currency is higher in your new country.
3. Tax
You need to be aware of the taxes in your new country before moving in. For example, you may be moving from a country where you pay just one central tax as an employee or a business owner.
If your new country is a place like the UK, which is a land of taxes because they have income taxes, cooperation tax, VAT, MOT, and many others, you need to prepare yourself.
And even though these taxes have values, they have their usage because you benefit from one or two things. For instance, you benefit from the council tax by getting your bins carried off and your neighborhood cleaned.
Most taxes are value-adding but do not change the fact that you would pay from your income. Therefore, you must understand the tax system of your new country.
Otherwise, you would create a budget without considering tax. When you eventually pay your tax, you will have less money than you initially thought.
Find out what tax is, how much you would have after tax, and how frequently you need to pay different taxes.
You cannot escape tax payment because you will owe the government, and not paying some taxes in the UK can send you to jail. So budget them into your income and plan accordingly.
4. Transport
The cost of transportation is a big one in the UK. For example, if you get a job and must commute, you must get from your home to your office daily.
Transport can quickly begin a big chunk of your expense in a country like the UK because you would have to get on trains, buy train tickets, and all that.
Suppose you’re moving to a country where taking a train is not a thing; you will also consider the need to buy a car, fuel it, and get insurance.
If you are coming in with a partner and your kids, you have to factor in the possibility that they have to go to school daily. So you would drop the kids off at school, bring them back, shop for groceries, and go to work.
5. Visa renewal
For many people, you need to renew your visa beyond the first visa that gets you into the new country. Visa renewal is a cost you need to bear in mind because it can quickly become overwhelming if you do not plan for it.
For instance, if a family of four needs to renew their visa, they will spend more. So even if your visa renewal is not due in another three years, plan for it because time flies quickly.
The questions to ask yourself are: what kind of visa renewal do I need to d? When do I need to do it, how much will it cost me, and what are the requirements? How can I meet up, so I do not have to return to my old country?
6. Black tax
You will likely experience the black tax if you are black or African. The black tax is the cost of supporting and helping your relatives back home. This cost applies if you’re moving from Africa to any western country and have left people at home.
You will bear in mind that you need to support your aged parents and other relatives back home. I once talked about black tax in a video on my YouTube channel; you can watch it here.
As you relocate to your new country, I wish you all the best and hope you settle in nicely.
If you have already moved to your new country, I shared in a recent post the financial steps and actions you must take to manage your finances as a new immigrant.
Till next time,
Love
Ronke.
