7 Money Moves for Living Abroad

Thinking of living abroad? Join the club. Faced with a sluggish job market at home, a growing number of Americans are looking outside the country for career and growth opportunities.

"People are rethinking what they're doing with their lives," says Troy Peden, co-founder of GoAbroad.com, a clearinghouse for overseas internships, volunteer opportunities and work programs whose Web traffic has notably increased since the start of the recession. "Many people fantasize about living abroad and now they're taking advantage of the situation (to do so)."

But before you start pricing plane tickets, take stock of the financial implications of leaving the country. Going abroad without a financial plan could have disastrous consequences, from failing to find affordable housing to being unable to return home quickly in an emergency.

What's more, by failing to take the long view at the outset, you could experience surprising financial complications upon returning to the U.S.

Consider these seven financial tips to make the most of your overseas experience.

Never underestimate the need for adequate savings. Megan Fitzgerald, founder of CareerbyChoice.com, a website offering career advice for expatriates, generally advises her clients to have seven to nine months' worth of living expenses in the bank or in an easily accessible, low-risk savings vehicle prior to their departure.This amount varies, however, depending upon your job, family status, lifestyle, the current exchange rate and your local network abroad.

"One of the top reasons why people fail to build a life for themselves abroad is finances," says Fitzgerald. She adds that future expats shouldn't just plan for the costs of moving abroad, but the costs of moving back, too.

What if you have an opportunity to move abroad before reaching your savings goal? According to Fitzgerald, at a minimum you should have funds to cover housing costs, including security deposits and other settling-in costs, plus emergency health care and repatriation expenses.

Having a healthy savings account is great, but if you don't have an accurate sense of the cost of living in your host country, you might blow through it faster than anticipated.

Before you go, identify the costs of housing, food, education, entertainment, transportation, utilities and insurance in your target country. From these figures, create a monthly budget based upon your income and projected expenditures.

"Don't forget to figure the costs of going back to the 'old country' for special occasions or emergencies," says Dan Prescher, special projects editor of InternationalLiving.com.

Prescher, himself an expat residing in Ecuador, says you can find sample budgets for many countries on the International Living website. Expat blogs and online cost-of-living calculators are also key sources of information. "Run your budget for a few months and adjust as needed," Prescher says. "Things always change once you're on the ground."

Future expats heading to countries with less developed banking systems should prepare to put any prospective bank under a microscope.

Focus on the target bank's international clearing networks, says banking lawyer Michael Cavendish of Gunster law firm in Jacksonville, Fla. Determine whether the bank issues U.S.-style credit cards with the Visa or MasterCard brands, or whether it participates in a shared ATM or payment clearance network, such as Cirrus.

"Participation in consumer-oriented networks and partnerships is a sign of reliability since it indicates the bank has been vetted by the network or another major business," says Cavendish.

Also verify whether deposits are guaranteed and by whom. If the host country's government guarantees the accounts, consider the stability of the government. If the guarantor is a private organization, research the strength and reputation of the organization.

Once these questions are satisfactorily answered, examine interest rates, fees, ATM availability and other conveniences.

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