Ask the Expat
The Hidden Costs of Moving Abroad
By Volker Poelzl
Living Abroad Contributing Editor
At a time when people are tightening their belts, it is a good idea to plan your finances and expenditures carefully and prudently. However, this can be difficult when it comes to expenses we are unfamiliar with, such as the cost associated with moving abroad.
In past columns I have written extensively about the financial aspects of moving abroad, such as cost of living, banking, housing, etc. For this column I would like to focus on an important, but often overlooked financial issue: the actual cost of moving to another country and the many unexpected expenditures associated with such a move. Below I have listed likely expenses for those planning a move overseas.
The Scouting Trip
Most people who have chosen an overseas destination have already traveled there. But if you do not yet know the country you are interested in, you probably want to go on a scouting trip to find out if you actually like it. Two to three weeks is probably long enough to get a basic idea of the country, but no matter if you drive to Mexico or fly to Thailand, you will have to spend a few thousand dollars to travel around the country to get a sense of place.
Passport and Visa Fees
Passport and visa fees can add up quickly. A U.S. passport costs around $100 dollars and depending upon the type of visa needed for your host country, your application fee could cost several hundred dollars. In addition, you may have to provide translated and authenticated documents, a health certificate, and a copy of your police record from your home state, which adds to your expenses before you even leave the country.
If few people in your chosen host country speak English, you might want to consider taking a language course 6-12 months before your planned departure. A self-study course can cost between $20-$200, depending on the type of course (book, CD, or CD-ROM), and a language course at a school can cost anywhere from $50 to $200 dollars a month, or more, depending on the number of classes and number of students.
Expenses at Home While You Are Gone
Even after leaving your home country you will most likely have expenses at home. Perhaps you have a bank account with a monthly fee or a credit card account that needs to be paid, or you have a storage unit for your belongings and/or vehicle with monthly charges. If you move overseas for part of the year, you will probably have to hire someone to look after your property or check on your storage unit from time to time. There may be bills that need to be paid, such as insurance policies, or you might have a mail-forwarding service with a monthly fee.
Shipping your Belongings
When I moved to Brazil for a year, I shipped about 100 pounds of books to Brazil by surface mail with the International Direct Sacks (M-bags) service offered by the U.S. Postal Service. It took a few months for my books to arrive, but it was very cheap. Unfortunately the M-bag option the USPS offers today is by airmail only, which is quite costly. Besides renting a shipping container (or part of one) to ship your belongings, your only other option is to ship your items as freight on an airline or as excess baggage, which is quite expensive.
If you are moving overseas, you probably want to buy a book about Living Abroad as well as one or several travel guides, and other books that provide useful information about the country of your interest. I would probably spend about $100 on five or six books.
Medical Expenses Before You Go
No matter where you decide to move, it is a good idea to update all common vaccinations (such as Tetanus) and get additional vaccinations recommended for your host country. You may also want to a medical checkup, and get prescription or over-the counter-drugs to take with you.
If you live in North America, you have the option of driving as far south as Panama (only recommended for adventurous spirits), but for all other expatriate destinations, flying is your only option. Expect to spend up to a thousand dollars to get to South America and Europe, and quite a bit more to get to Asia or the Pacific.
If you would like to take your favorite pet with you, you will most likely have to go through a lengthy and costly quarantine process. You will need a health certificate for your pet from your local vet, get the required vaccinations and you might have to pay for your pet to be quarantined in your host country for up to several weeks or months. As a general rule, it is fairly easy to take a dog or cat, but it is very difficult to take a bird across borders, due to the worldwide concern about the spread of Avian influenza.
Customs Duties and Import Regulations
Each country has different customs regulations for tourists and long-term residents. If you have a residency permit, you can usually import household goods and even a vehicle without paying import duties, but if you move a lot of your belongings overseas before you establish residency in your host country, you will most likely be charged import duties, which can be quite high. Make sure you find out the details before you start shipping your belongings.
Accommodation After Your Arrival
Unless you have already bought a house/condo/apartment or have made previous rental agreements, you will probably spend the first few weeks or months at your new destination in a hotel or short-term rental. This is always more expensive than renting or owning a place, especially since you won’t be able to prepare your own meals in most cases.
Local Registration Fees
After arriving at their destination most foreigners are required to either register with the local immigration office or federal police. Sometimes fingers prints and passport photographs are required, and some countries will issue you a national I.D. card. If you are importing a vehicle, you will need to have an import permit and then register the car with the local authorities. In most cases you are also required to get a local driver’s license within a few months after your arrival. Fees for these registrations and I.D. cards vary drastically from country to country, and you should find out beforehand to avoid unpleasant surprises.
New Household Items
Unless you are a diplomat who has his belongings shipped overseas by the government, or unless you work for a multinational company that will ship all your household items free of charge, you will probably end up leaving most of your household items behind. This means that you will have to buy a new refrigerator, stove, furniture, TV, etc. once you settle in your host country. Find out what items you can easily and cheaply purchase overseas and what items you would rather bring with you.
If you still own property at home or have family and friends, you will probably want to come home from time to time. This is probably one of the reasons why Mexico is a popular destination for U.S. expatriates: It is close to home and cheap to get back. There is a huge difference between spending a few hundred dollars for a home visit or a few thousand dollars. Choose a close expat destination if regular home visits are important to you.
I previously covered Health Insurance Options Abroad, but I would like to talk a little bit more about cost. The cheapest option is no doubt to join the national health coverage in your host country, which is possible if you have permanent residency (as a foreign employee, retiree, investor, etc.). Otherwise you can either get a long-term travelers’ health insurance policy, or you could keep your insurance policy at home, if it includes international coverage. As a general rule, the higher the deductible (out-of-pocket expense), the lower the cost of the coverage will be, and vice versa. If the cost of comprehensive travel health insurance is too high and you are in good health, you should consider just a basic emergency health plan that covers only hospitalization. This can help you keep costs down, especially if you get travelers’ health insurance for an extended period of time.
If you use your U.S. credit cards abroad you will be charged an additional percentage for overseas transactions, anywhere from 1.5-3%. In my experience, using a U.S. credit card overseas is only practical for short stays. If using a check or debit card, inquire at your bank at home how much you are charged for ATM withdrawals or purchases overseas. Keep abreast of exchange rate fluctuations to avoid unpleasant surprises. If the dollar shows signs of weakness, take out more money each time you withdraw funds from your U.S. dollar account.
Volker Poelzl is a Living Abroad Contributing Editor for TransitionsAbroad.com. He has traveled in over thirty countries worldwide and has lived in ten of them for study, research and work.