If you’re considering financial planning for expats or looking for tips for moving overseas, you’re in the right place. In this guide, we’ll share how we manage money as American expats living in Mexico, and provide actionable strategies to help you save, invest, and make the most of your income while living abroad. Managing your finances in a foreign country can be challenging, but with the right approach, you can avoid hefty ATM fees, protect your money, and set yourself up for long-term financial success.
Financial Planning for Expats: Avoiding ATM and Currency Conversion Fees
When you’re living abroad, one of the first challenges you’ll face is accessing your money without paying excessive fees. Unlike back home, you can’t just walk into your local bank and withdraw cash. As an expat, you need to be smart about your financial planning to avoid unnecessary fees. For example, many banks charge foreign transaction fees, ATM withdrawal fees, and currency conversion fees—costs that can add up quickly.
We recommend using banks like Mercury for business accounts and Capital One for personal checking accounts. These banks don’t charge foreign transaction fees, and in many cases, they reimburse ATM fees, which can save you hundreds of dollars each year. Additionally, using services like WISE (formerly TransferWise) to transfer money between different currencies ensures you get the best exchange rates without hidden fees.
Tips for Moving Overseas: How to Make Money as an Expat
One of the most important aspects of financial planning for expats is ensuring a steady income while living abroad. Many people assume they’ll need to find a job in their new country, but this can be difficult due to visa restrictions and local competition. Instead, we encourage expats to embrace geo-arbitrage, where you earn money in a strong currency like the U.S. dollar but live in a country with a lower cost of living.
Starting an online business is one of the most effective ways to achieve this. Whether it’s freelancing, consulting, or selling courses, the internet has opened up a world of opportunities for expats. You can work remotely from anywhere in the world, allowing you to increase your income while enjoying the financial benefits of living in a country with lower expenses.
Save and Invest: Key Financial Planning Tips for Expats
When it comes to financial planning for expats, saving and investing should be a top priority. We recommend setting aside at least 40% of your income for savings and investments. While this may seem like a high number, it’s crucial for long-term financial success, especially when living overseas.
Instead of keeping all your money in a low-interest bank account, focus on investing in assets like real estate, stocks, or even businesses. This ensures your money is working for you, helping you grow your wealth over time. Living in a country like Mexico, where the cost of living is significantly lower than in the U.S., allows you to save more money while still maintaining a high quality of life.
Managing Multiple Bank Accounts as an Expat
When moving overseas, it’s essential to maintain both local and international bank accounts. A local bank account helps you manage everyday expenses like rent, utilities, and groceries. Meanwhile, keeping an international bank account in your home country ensures you can still receive payments, pay bills, and transfer funds as needed.
For personal accounts, we use Capital One and Fidelity, both of which offer low-fee or no-fee banking services for expats. For business banking, Mercury is an excellent choice as it offers fee-free international transactions and easy access to your funds wherever you are.
Moving Money Between Currencies: The Best Tools for Expats
One of the biggest challenges expats face is moving money between currencies. Whether you’re paying rent in pesos, utilities in euros, or simply transferring money from your U.S. account to your local bank, currency exchange can be costly if you don’t use the right tools.
We recommend using WISE for international money transfers. WISE provides some of the best exchange rates and charges minimal fees compared to traditional banks. Whether you need to convert U.S. dollars to Mexican pesos or send money to a family member back home, WISE makes the process simple and affordable.
Final Thoughts on Financial Planning for Expats
Financial planning for expats requires careful thought and preparation, but with the right strategies in place, it can be a smooth and rewarding process. From avoiding ATM fees to growing your income through geo-arbitrage, the tips we’ve outlined will help you navigate the complexities of managing money overseas. By saving, investing, and using the best banking and money transfer tools, you can set yourself up for financial success as an expat.
If you’re ready to take control of your finances as an expat, download our free guide on how to make money from anywhere in the world. This guide will help you get started with online business ideas that work no matter where you’re living. Plus, if you need personalized financial advice, schedule a consultation call with us—we’d be happy to help you create a financial plan that supports your expat lifestyle.
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Resources Mentioned In This Blog Post:
- Interested in running a location independent business? Download our Make Money From Anywhere Guide here: https://www.entrepreneurexpat.com/money-guide
- Mercury for Business Banking: https://www.entrepreneurexpat.com/mercury
- Wise for currency exchange: https://www.entrepreneurexpat.com/wise