It’s February again and Love is in the air. In 2016, American Express estimated that at least 6 million people would get engaged on Valentine’s Day, so it’s a safe assumption that a portion of the nearly 8 million and counting U.S. citizens that live abroad, moved for romance.
As an international banker and former U.S. Expat, I have seen many a romance strained and even ruined due to finances. Most couples are so entrenched in the details of planning a life in a foreign country and the endless tasks required for relocating overseas, that they forget to discuss the potential challenges of managing their finances globally.
- Create your own separate financial plan – Engagements can be broken, and living with someone in a foreign country can easily test any relationship. Pre-Departure, develop a financial plan that outlines sources of income, expenses, and a Plan B Fund (as in Bye-Bye — it didn’t work out).
- Take baby financial steps before fully committing to a new life overseas. In the short term, perhaps a long distance romance is best, and if your partner is on an Expatriate assignment, perhaps the sponsoring company will pay for visas and airline tickets for frequent visits.
- Don’t give up your home immediately, but instead sublet or rent it out and put your household goods in storage.
- Most countries recognize marriage as a sacred institution, offering the maximum benefits and protection for each party. This is why most of my friends tell me they would not accompany their partner to a foreign country without the benefit of marriage.If you are not married, think about registering as a civil or domestic partnership before leaving home. This might offer you the best alternative for financial protection should problems arise overseas. Consider creating a formal cohabitation agreement that will clearly state the living and financial arrangements you’ve agreed to. For example, if you are not authorized to work or can’t find employment, is your partner willing to support you financially, and to what extent? Will you have an allowance, or will your partner pay for all expenses in the home and host country, and for how long? If you split up, who will pay for your repatriation?
- What about your career? If you are permitted to work, is it a country where you will be able to easily find employment? Ask your company about taking a leave of absence from your job (don’t forget to ask if the leave is paid or unpaid and offers job protection). If you work for a global company, maybe your company has an office in your new host country, or you can work remotely. If employment is not an option, maybe this is the time to launch a new online business venture or gain an advanced degree at a local University.
- If you plan to generate income in the host country, invest in a consultation with a licensed, qualified tax professional. Also, don’t forget about State tax filing requirements, and your host country tax filing requirements and potential tax liability. Seek advice from an immigration attorney to fully help you understand the basics of local immigration laws, including visas, work permits and your rights as a foreigner. This information may become valuable if you fall out of love with your partner, but fall madly in love with your host country and want to start a new life as a Solo Expat.