Digital nomadism is all the rage these days and not without a good reason. The prospect of traveling the world while living on your own terms and making enough money to enjoy life is a dream come true for pretty much everyone.
However, the keyword is “money,” as the lifestyle doesn’t come cheap no matter where you are. For one thing, there are U.S. expat taxes to consider, and for another — local and state taxes for expats.
Before all that, however, there is a long list of things to keep in mind, so let’s take a look at the definitive checklist of things expats-to-become need to go through to make everything run smoothly.
1. Assemble Important Papers and Make Copies
No matter how you look at it, paperwork is a big fuss. On top of the paperwork needed to present in order to obtain your visa, you may also need some of the documents once you’re abroad.
That’s why you should obtain all documents you may need, including:
· International health insurance card
· Medical documents
· Work permit
· Birth certificate
· Marriage certificate (if applicable)
· International driving license (if applicable)
· Social security documents
· Academic records
Furthermore, make sure to make copies and leave them with a trusted family member or friend back home. Just think about losing an important document and the pains of getting a new copy while abroad. Not good, as it’s better safe than sorry.
2. Calculate the Taxes in Advance
Taxes are possibly the most complicated part of being a digital nomad, especially if you keep traveling regularly or don’t have a base in one country. Different countries have different tax rules and there are also U.S. taxes to keep in mind.
Basically, you’ll need to consider:
1. Taxes of the country they’re residing in
2. U.S. state taxes
3. U.S. federal taxes
Use professional services if this is too much for you in the beginning. Expat taxes can often be too complicated in the beginning, especially when figuring out your foreign earned income exclusion. It is always a good idea to get to know the local expat community as these people will have the best advice possible.
3. Cancel Unnecessary Subscriptions
This is one thing many ex-pats tend to forget. Make a list of all subscriptions and decide which ones you won’t need once abroad. Obviously, phone plans and rents are a no-brainer, but what about gym memberships and magazine subscriptions?
A side note: instead of relying on expensive roaming services, choose a local SIM card and a local provider. It is way cheaper!
4. Inform Your Bank You’re Relocating
Your bank should be informed that you’ll be relocating. Keep repeating that for as long as necessary until it finally hits home. If needed, cancel the services as you should definitely rely on cheaper options than a U.S. credit/debit card.
On that note, foreign transaction fees can be outrageously stellar (2% to 5% per transaction), so look for better opportunities. Fortunately, there are many. With the rise of the gig economy and remote work, more and more people are looking for alternative payment options. Look up some of the best-rated services like Revolut Payoneer and e-wallets. Compare the fees, as much depends on the country you’re planning to relocate to, too.
5. Decide Whether You Need a U.S. Insurance Policy
This is one of the most complicated questions for expats especially since many countries require a certain amount of money to be deposited for health insurance purposes. For many countries, you won’t even be able to qualify for a Visa if you don’t have international health insurance, with the minimum sums rarely being below $25k.
This is rather expensive, so make sure to compare options before deciding on the best one. In addition, consider this: are your premiums are worth paying while you’re away? If you’re already paying for a health insurance plan elsewhere, the answer seems rather obvious.
There is no simple answer to these questions, so you should think deeply and hard about your plans and do your research well in advance.
6. Don’t Lose Contact with Important People Back Home
In addition to choosing a reliable person for keeping copies of your important documents and email forwarding, it is also important to keep communicating with all important people back home.
With the rise of new technologies, this shouldn’t be too difficult, but various matters (such as different time zones, traveling and poor Wi-Fi) may make the matter complicated.
Why not set up regular online meetups? Host an online party on a weekend or Friday evening.
7. Don’t Forget the Food!
If you’re planning to relocate to a country with totally different cuisine, you may find it difficult to adjust just immediately. While this may seem like an insignificant matter, we beg to differ: buy plenty of your favorite snacks and bring them with you.
The same applies to other goods, especially if you have certain preferences. Electronics and clothing are only some of examples.
Of course, you should compare prices. Sometimes, it is cheaper to buy clothes of similar quality abroad and sometimes it’s the other way around.
In any case, make a list of things you cannot live without and bring them with you once you set out!
8. Traveling with Pets? Double Check Everything!
If you’re traveling with your faithful four-legged companion, you should think about literally a myriad of things before you even set out. Pet import rules may be complicated, but they are just the beginning. Vet costs and pet sitting costs should also be factored in your calculations and you should have a backup plan for any occasion.
Being an expat is loads of fun, but not everyone chooses this lifestyle for that reason. Some people simply find it cheaper to live abroad while others decide to move out of the states when they retire.
No matter what your reasons are, you should research the options before moving on with your plans and keep in touch with important people back home. Living abroad is not a permanent state of affairs! You’ll be flying back home occasionally and traveling to different countries, too, so plan well ahead!