When you first arrive in a foreign nation for work, money management can be quite difficult. Even if you are getting paid a lot more than before, you may find yourself at a financial disadvantage for multiple reasons in your current nation of employment. Most of the problems are just initial adjustment issues that come with working in a new nation under a completely different kind of economy.
Fortunately, the common mistakes foreign workers make under their new circumstances can be avoided or mitigated with some preparatory guidance. Go through the following money management tips and suggestions to gain a decent understanding of what to expect and how to counter those problems.
Estimate the Relative Value of Your Pay
If you find yourself earning significantly more, as compared to what you were paid back in at home, it’s only natural to be excited about it. Unfortunately, that comparison does not hold real life financial value when you are working and living in a different nation. An economy that pays you significantly more will also charge you considerably more. Your income’s actual value can only be estimated after subtracting all the essential expenses from it.
Everything from the cost of food and rent to the numerous government taxes will take a much bigger chunk out of your new income than you might be initially prepared for. Before making any major financial decisions, you must re-estimate the value of your income in relation to the economy in which you are living right now.
Prepare a Practical Budget
Now that you have properly estimated the value of your income, it’s time to prepare a practical budget. To prepare a practical budget as a new worker in a foreign nation, you need to consider two main factors.
- Your minimum living expenses every month.
- The minimum amount you wish to save/send back home every month.
Try to keep your minimum living expenses as low as possible during the initial few months at least. Even if you are earning well, take some time to come to terms with the new economy. Save what you can, but don’t send all your savings back home right away.
Use Ria Money Transfer to send money back home and avoid paying exorbitant fees, extra charges, or hidden fees. Remember that the money you send back home will probably be worth a lot more than what it’s worth in your current nation of employment. So, be careful not to send more than you can afford.
Calculate Your Income After Taxes
If you are working in a company where your taxes are calculated, subtracted, and paid by the company’s accountancy/payroll, then you don’t have to worry too much about tax calculations. When that’s not an option, you will need to take care of it yourself. Get to know the income tax system, as would be applicable in in your case.
Make it a habit to always calculate your actual income, only after taxes every month. Estimate your dues according to the applicable income tax slab, keep all relevant records, and set the due amount aside every month. If you don’t do this, it might prove to be very difficult for you to present all the documents necessary and pay the dues at the end of a financial year.