Plan B

SavingWhen moving overseas you always need to have a Plan B.  What will you do if it all comes to a screeching halt?  What if you just don’t like the job or the location?  Your new boss is intolerable?  The schooling for your kids isn’t working out?  Heaven forbid one of you gets seriously ill and needs to return for medical treatment.  There are many reasons why you may return home before your planned date (assuming you had a planned date to start with), so better be prepared with an exit strategy.  It doesn’t matter if you’re a permanent employee or a contract hire, read the small print and you’ll probably find you can be asked to leave on a month’s notice (or two if you’re lucky).  Check the terms for termination closely.  For example, will you have to repay relocation expenses or housing/school fee loans if you leave in the first year? 

A place to live.  If your original home is sold or rented out, what will it cost to rent a place? Is staying with relatives or friends an option you want to consider?  Furnished short-term rentals can be pricey.  And yes, it will have to be furnished as it could take your shipment of household goods 6-8 weeks to arrive.   As an aside, if you do own a home, think long and hard before selling up before leaving.  For some (Canadians in particular) it may make senses for tax purposes, but being out of the housing market for a few years can put you in a situation where you can’t replace the home you used to have when you return.

Your shipment.  Check the customs regulations for your home country if you plan to bring household goods back with you.  Canada, for example, requires everything to be at least 6 months old in order to be exempt from duty, and you can only bring a car back if the exact same model was sold as a new vehicle in the Canadian market.

Health insurance.  If you have a government plan, will you be immediately eligible?  If not, add insurance to your budget.

Schooling.  If you return mid-year, can the children go straight back into your local school? 

Tax implications.  Many countries require you to be away for a fixed number of days in order to avoid paying tax.  I’ve known expats wander the globe, staying with friends or even backpacking in Asia because they can’t afford to go home before the end of the tax year.  If you did end up in this situation, how would you handle it?

An income.  There might be a period of unemployment, particularly if you were hired specifically for an overseas assignment.  A long time ago a recruiter told my husband that for every $10,000 of annual salary it can take a month to find a similar job. 

A rainy day fund.  If it’s all starting to sound a bit expensive, then you’re right.  These days many employers won’t pay much more than a cheap airfare to repatriate employees.  Shipping treasured possessions, or even just a few extra suitcases, can be expensive.  So the first thing you should do when you get your first big fat expat paycheck is open a savings account!

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