Managing your finances in the USA

Top tips for taking care of your money

Managing your finances in the USA

Expats have a lot on their plates when moving: housing, schooling for children, visas and permits… the list goes on. It’s no wonder many expats fail to make proper financial arrangements before relocating—a costly (and thoroughly avoidable) mistake. Below we’ve identified the four essential steps for effectively managing your finances when you move to the USA.

1. Open two bank accounts

You’ll want one bank account in the USA and one at home. Even as an expat, you may continue to have financial obligations in both countries. Fund each account with enough to cover 3-6 months worth of expenses in that location. The last thing you want is to exchange currencies in a rush or at an inopportune time . Use big, reputable banks for both accounts. Larger banks usually offer better exchange rates, higher quality services (such as faster wire transfers) and more robust websites.

2. Establish two credit cards/ bank cards

This goes hand-in-hand with Step 1 above. Having payment cards denominated in both dollars and your home currency will b convenient, while also protecting you from fluctuating exchange rates, and foreign transaction fees.

3. Find a qualified international financial advisor

Managing an internationally diversfied investment portfolio with international tax consequences is a complicated and tome-consuming process. You'll want a financial advisor specializing in clients leading international lifestyles. A good expat financial advisor can help with issues such as:

  • Optimal location of investment accounts
  • Retirement planning
  • Currency diversification
  • Estate planning
  • Real estate ownership and investment

Watch out for anyone working on commission - commissioned salespeople are often more concerned with their pay than with your best interests. We recommend limiting yourself to "fee-only" advisors.

4. Consult a tax advisor

Tax concerns can be a headache for any expat, and the USA tax system is one of the most complex. You’ll want a tax advisor that specializes in cross-border taxation in the USA, preferably one that can integrate their advice with your home country. Also, don’t assume that the tax advisor your company pays for is working for you – it often pays to have an independent advisor review the tax return that your company has prepared for you.

Final thoughts…

Your advisors will be able to help you with the decision about where to invest, and should also be able to recommend a solid, secure investment firm (see why it’s so important to find people you can trust?) If you decide to leave your investments in your home country, you should establish the relationship before you leave. It can be hard to open new accounts with a foreign address – especially one in the US. Also, beware of any government-imposed restrictions on the movement of funds between countries. Follow these steps and you’ll be well on your way to sound finances and a healthy portfolio of investments.

This article was written by Jeannie Pedersen, Senior Portfolio Manager at Maxim Global Wealth Advisors, a premier wealth advisor for American expatriates and expatriates in the US. 

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