Most expats first come overseas due to pay rises, especially for short-term assignments with multinationals. So what are the biggest reasons why expats often fail to save? I list the most common reasons I have seen below.
Let’s get this hot potato out of the way. When people move overseas, it puts a strain on relationships. Moreover, for some people, they have more options overseas. Regardless of whether divorce is positive or negative, it is certainly negative financially.
2. Meeting new people
When you move overseas, you leave behind your friends. Most people, moreover, want to meet new friends when they move countries. However, this costs money, especially if you live in a city like Dubai or Singapore, where a drink at an expat event could easily cost you $10-$20!
Many people are attracted to Switzerland, UAE and Singapore due to low taxes, but they often don’t factor in higher living costs.
Brits overseas often don’t factor in the tax opportunities that exist overseas, and Americans can be double taxed.
4.School fees and healthcare
Healthcare and schools are free at the point of use in most developed countries, and at an acceptable standard. Overseas, the situation is different. Expats are often left with a decision between weak local schools, or paying for expensive international schools, if their employer doesn’t pay the school fees. Likewise, quality health insurance can become expensive for people above 60.
5. Unsuitable existing financial plans
Too many expats decide to either be too conservative and leave money in the bank (and therefore indirectly lose to inflation), or elect for expensive outdated plans when cheaper alternatives exist.