5 Months, 7 Currencies: Managing Your Money While Abroad

By the end of March 2015, my husband and I will have spent 7 different currencies over a 5 month period: US Dollar, Turkish Lira, British Pound, Bosnian Marka, Danish Krone, Swedish Krona and the Euro. Living and traveling abroad is extremely rewarding and a way of life for us, but it doesn’t come without it’s challenges. Especially financial challenges.
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As an expat we’ve been earning Turkish Lira for the past year. Now, as we prepare to leave the country for good, we need to transfer our savings from Turkey to our bank back home. As of late, the Turkish Lira has been gaining strength in the global market, which is great for Turkish people, but terrible for expats like us. So we spend time every day agonizing over the exchange rates as we prepare for transferring a year’s worth of salary to the US. The day, hour and exact second we hit transfer will be the difference between thousands of dollars. No pressure, right?

And don’t think Uncle Sam doesn’t know that we live halfway around the world. He does and makes no exception for us or our access (or lack there of) to our W-2 forms! So filing taxes online has been our go-to method while overseas. Lucky for us, we’ll have been back in the US for a whole two weeks before our taxes are due this year.

There have also been (and will continue to be) challenges related to traveling abroad. We’ll soon head out on our Adriatic Tour, which will take us through Bosnia, Croatia, Slovenia, Italy; with a mini-trip to England at the end before heading home to the US. Think about all the currencies we’ll have to use in those 4 weeks!

While these situations may seem near impossible to manage, we have employed a few strategies that will help anyone in a similar situations:

BEFORE LEAVING HOME

I’ve outlined this before, but it never hurts to say it again:

Change Your Address – Aside from the postal service, make sure your banks, credit card providers, loan providers, magazine subscriptions (and any other organization that sends you mail) knows you’re leaving the country.

Collect Online Passwords, Usernames and Account Numbers – With the ability to take care of almost all money-related transactions online, be sure to make a list of all account numbers, passwords and user IDs. We have sent our parents on a wild goose chases searching for our bank account numbers on more than one occasion (sorry mom!). So, keeping cyber security in mind, make sure you are able to easily access this information while overseas.

Maintain Easy Access to Important Documents – If you’re like us, you’ll be too busy planning your travels to notice that you’ll be exploring Istanbul when tax day rolls around! To avoid any struggles, make sure your tax documents are easily accessible. In the past, we’ve scanned and e-mailed copies of our W-2 forms to ourselves so that all we had to do was download them and use the information when filing our taxes online. If this isn’t your cup of tea, make sure you leave the physical documents with someone who can easily find them and share them with you.

Automate Payments When Possible – Again, we’re not trust fund babies, so along with earning and spending money overseas comes paying off debt back home. One way we’ve managed this is by scheduling automatic payments. Depending on your comfort level and perhaps your savings, you may or may not want to automate your payments. If that makes you uneasy, simply schedule monthly reminders via e-mail or your digital calendar so that you don’t miss a payment while you’re away.

When There’s Money Sitting At Home – If you’re lucky enough to have extra money just sitting in your accounts back home, you have several options.

First, you should make sure you have a solid savings–enough money to live off of for 6-8 months. This cushion is important because you don’t know what might happen while abroad or once you come home. Second, you can invest your money. I’m not an expert on this subject, so I’ll just say speak with a financial planner to learn about your options. Third, you can contribute to a retirement account. I know that when you’re just starting out your professional career it seems crazy to start thinking about retirement, but compound interest can go a long way after 40 years! Even if you’re not working, consider contributing every month. I promise that one less elephant ride in Thailand or beer at Oktoberfest will be worth it when you are comfortably retired.

WHILE YOU’RE ABROAD

Most things related to financial management can be addressed before leaving home. But once you’ve left, keep these things i mind:

Bank Like a Local – If you’re an expat, or plan to visit a country multiple times, opening up a local bank account may benefit you financially. Not only will it allow you to avoid ATM and currency conversion fees, but, if you’re like me, you’ll forget that your money is sitting in a savings account somewhere across the world and you can let it grow.

NOTE: Make sure you check with your national guidelines as well as the guidelines of the country you want to bank with. Having a residency permit, reporting overseas earnings (i.e., the interest earned from your overseas savings), etc. might make opening a local bank account less advantageous than just converting currency every time you visit.

Pay Attention to Exchange Rates – If you’ve just finished an expat assignment and plan to transfer large sums of money back home, check with your bank to see what fees and other tax-related regulations exists. For example, in the US, international money transfers above a certain amount will automatically be reported to the US government and then taxed. You can work with your bank or accountant to learn more about your options. On a similar note, before traveling abroad, collect the necessary information from your bank so that you’re ready to make international money transfers from your overseas bank to your local bank. The information needed is a SWIFT CODE, ABA number and your account number (NOTE: US banks don’t have IBAN numbers, but rather use the ABA number). While abroad, we were on the phone for a while before we were able to get this information from our local bank.

Reap Your Rewards – Life isn’t cheap, nor is traveling. But sometimes you can catch a break! For starters, when we lived in the US, my husband and I took advantage of many travel discounts offered by our employers. From discounted flights to hotels, it made it possible for us to take two epic road trips on the east and west coasts. If you don’t have this option, another way to get discounts is to sign up for airline frequent flyer programs and credit cards which offer awards. We always charge everything to our credit card (and pay off the balance each month) so that we can earn more points. With these points we’ve earned cash, gift cards and even a camera! We also converted our existing credit card to a Travel Rewards card with the same provider which doesn’t charge international transaction fees. These things combined have allowed us more financial freedom throughout our travels (not to mention less currency conversion/leftover foreign currency).

Which brings us to the last tip, Leftover Currency – One of the most frustrating parts of traveling is leftover change. The kind of leftover change you can’t do anything with–not even buy a pack of gum! I haven’t tried it yet, but I saw a machine at the Ankara airport where you can deposit your leftover currency it into your PayPal account or donate it to a charity. As I sit in my expat home, looking at 12 bags of change collected over the past decade, I am envious of today’s traveler and hope to get rid of some of these zip lock baggies full of packet change soon!

SIDE NOTE: Aside from using PayPal, there are other ways to use digital money, more commonly referred to as bitcoin. I don’t have any personal experience with bitcoin, but it’s a growing trend. Here’s an example of a bitcoin wallet: xapo.


Keeping in my I’m not a financial expert, I do have over a decade of international travel under my belt and have used the strategies above to make each overseas adventure smoother than the one before. Researching your options prior to big trip or move abroad will be well worth the time and energy spent.


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What money management tip do you have for future expats and travelers?
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