The Ultimate Guide to Moving Overseas: What Americans Need to Know About Costs

Given the current political climate in the United States, it’s no surprise that more Americans are exploring the idea of moving abroad. Some reports show that online searches for emigration have surged by over 1,514%, signaling a potential exodus the country has never experienced before.

If you’re one of those considering the move and starting a new chapter overseas, keeping more than just visas, housing, and logistics in mind is important. One of the most crucial aspects of planning an international move is understanding the financial costs involved. While the expenses will vary greatly depending on factors like your departure and destination locations, timing, what you’ll bring, and many other variables, let’s dive into the key costs you’ll need to plan for.

Key Costs of Moving Overseas

The first step before making the move is deciding where to go. Are you dreaming of life in the vibrant streets of Buenos Aires, or do you prefer the quiet charm of a more remote spot in Australia? Planning for at least one scouting trip is essential regardless of where you’re considering.

A scouting trip is a safeguard, allowing you to explore and determine if you’re truly comfortable with your potential new home. It’s important to immerse yourself in the city, sample the local food and culture, and assess housing options—this step is invaluable when possible.

In addition to the cost of your scouting trip, don’t forget to obtain a US passport if you don’t already have one to leave the country and travel freely. You’ll also need to dive into visa research for your destination country. What visa options are available, and which ones do you qualify for? How much will the visa cost and all the supporting documents needed for your application? Will you need to have your US documents translated or certified with an official apostille stamp? These are all additional expenses you’ll need to consider.

Transporting Your Belongings

If you’re not planning to start from scratch, transportation costs will be a key part of your moving abroad budget. Depending on where you’re currently located and heading, you can rent an entire or half-container to ship your belongings. For others, air travel may be the only viable option. Additional costs include storage fees for your items before arrival, customs duties, and insurance.

The volume and weight of your belongings also impact shipping expenses—more items or heavier goods will cost more to move. Additionally, seasonal variations can affect moving costs; peak moving seasons, like summer, are more expensive, while off-peak times, such as winter, may offer lower rates.

No matter which method of transportation you choose, MyExpatTaxes suggests checking local expat groups on Facebook, TrustPilot, or similar review sites to verify a company’s reputation. Reddit communities can also offer valuable insights. After all, no one wants to wait months to get their belongings—especially something as essential as sheets!

Settling In

Once you are abroad, there are a few key costs to consider off the bat as you settle into your new life. These can add up quickly, so it’s good to plan for things like:

Housing Deposits

Many landlords will require a security deposit before you can move in. Depending on the country, this often equals one or two months’ rent. Ensure you’ve accounted for this upfront cost and researched how each country handles renting to foreigners. Unsure where to start? Check out our country guides to get a better idea!

Setting Up Utilities

Once you’ve found your place, you must set up utilities like electricity, water, gas, and internet. These costs can vary depending on where you’re moving. Some providers may ask for an installation fee or a deposit, and in some countries, utilities aren’t included in your rent, so they’ll be an extra cost to cover. In some countries like Austria or Germany, you can purchase SIM cards for only a few Euros a month at stores like Lidl or Hofer to help save!

Daily Living Expenses

The day-to-day cost of living can significantly affect how much you’ll spend once you’re settled in. Think about groceries, transportation (public transit or a car), eating out, and personal items. It’s helpful to understand these costs in your new city so you can budget accordingly. And don’t forget about health insurance—some countries require expats to have local coverage, which could be another monthly expense.

These are just a few upfront costs, so factoring them into your budget before moving is important. That way, you won’t be caught off guard once you arrive. MyExpatTaxes recommends always calculating for more than you think you will need to spend per month, especially in the beginning while you’re getting settled and don’t have everything you quite need

Cost of Living Differences

When moving abroad, comparing the cost of living between your home country and your new destination is essential—research expenses like housing, groceries, transportation, child care, and healthcare. Websites like Numbeo or Expatistan can help you get a clearer picture of cost differences.

Additionally, lifestyle changes can affect your monthly budget. For example, moving to a city with reliable public transit may eliminate the need for a car, saving on expenses like gas and insurance.

On the other hand, if dining out or local activities are more common in your new city, it might increase your spending. Being mindful of these changes will help you plan a more accurate budget for your move. Keep in mind the salary differences you may face as well!

Currency Management and Taxes

When moving abroad, managing your finances in multiple currencies and understanding the potential changes to your tax obligations are essential for a smooth transition. Let’s break it down:

Managing Finances in Multiple Currencies and Associated Fees

One of the biggest challenges when living abroad is dealing with multiple currencies. Whether getting paid in a new local currency or transferring funds between the US and your new destination, currency exchange rates and transaction fees can eat into your finances. You may face hidden costs like poor exchange rates, international transfer fees, or foreign ATM withdrawal charges.

To help manage this, consider using services specializing in international money transfers or multi-currency accounts, like Wise or Revolut. These platforms offer better exchange rates and lower fees than traditional banks. MyExpatTaxes are Wise affiliates.

If you need to access funds in multiple currencies, consider setting up a local bank account in your destination country to avoid high currency conversion and withdrawal fees. Be aware that any foreign financial institution you decide to set up an account with will require you as a US citizen to sign additional paperwork for FATCA; not all banks are willing to work with Americans due to this, so you may need to shop around.

Understanding how your bank and other financial services charge for these transactions will save you much money in the long run.

Potential Changes in Tax Obligations Based on Your Destination

Moving abroad can bring about significant changes to your tax obligations. While some countries only tax income earned within their borders, many others require expats to pay taxes on their worldwide income. Understanding how your move will impact your tax status in both the US and your new country is essential.

As a US citizen, you must still file taxes with the IRS, even while living abroad. However, specific exclusions and credits, such as the Foreign Earned Income Exclusion (FEIE), can help reduce double taxation. While this can help minimize your US tax liability, you also need to be aware that the tax system in your destination country may have different rates, deductions, and reporting requirements, so it’s essential to familiarize yourself with both systems.

Some countries have tax treaties with the US that can help prevent double taxation, but not every country has this agreement. Additionally, depending on where you move, you may be subject to local tax obligations, such as Social Security or health insurance contributions, which can affect your income and expenses.

To ensure you’re compliant with your US taxes, consult an expat tax specialist, like MyExpatTaxes, the leading tax software for US taxpayers with international assets. We can help you navigate the complexities of your specific situation and avoid costly mistakes or penalties.

By adequately managing currency exchanges and understanding the tax implications of living abroad, you can minimize financial risks and maximize your international experience.

Conclusion

To sum it up, moving abroad is an exciting adventure that comes with a range of costs, from scouting trips and housing deposits to shipping your belongings and setting up utilities. You’ll also need to factor in daily expenses, currency exchange fees, and any changes in your lifestyle that might affect your budget. Planning for these expenses can make the entire process easier.

The key to a smooth move is to start planning early to avoid unexpected costs down the road. When it comes to handling taxes as an expat, MyExpatTaxes is here to help you navigate the ins and outs of your new tax situation, giving you peace of mind as you settle into life abroad.