Getting rid of excessive expat luggage

Personal financial reviews can uncover all types of oddities, especially for expatriates. Moving between countries and employers is virtually guaranteed to confuse your financial situation.

As expatriates move from place to place, they collect a range of products, many of which are financial, to ease their time in the new location. But experience suggests that when it comes time to move on again, the products get left behind ‘just in case’.

Often these products are still incurring small fees which the investor has completely forgotten. Individually, they are a minor nuisance, but added together they can become quite a drag on income.

Around two years ago I was called in to assist a couple based in Brussels. They had lived in both Paris and London previously. They were hoping to go into an early semi-retirement in the French countryside but could not understand why their very adequate income was unable to cope with Brussels living.

While trawling through their bank statements and financial documents we found that they had two almost identical long-term sickness policies, both of which had been established during a period of self-employment but were now almost completely negated by benefits provided by a current employer. They were also still paying for sickness and unemployment cover which protected a mortgage on a property they had now sold.

As if this was not enough, they had a savings plan whose sole aim was that it provided specific tax benefits which as expatriates they could not benefit from. They were saving into two pension plans to which non-residents are not allowed because of tax implications. They were also still paying for two mobile phones in different countries which they no longer used.

It might be tempting to laugh at this and think that it could not happen to us, but they were very intelligent and well-educated people who had simply become confused by the complexity of their financial arrangements. In short, they had given up and needed help.

In total, we cut around £350 (€523) from their monthly spending and rearranged £300 (€448) more to make it legal again. Happily, they are now semi-retired in a small village in rural France.

Your situation may not be like this, but by moving countries, you also move tax regime, property and banking arrangements.

Many of us also have a second property in another country. This adds to the complexity as we are now burdened by a second set of bills, taxes and responsibilities.

So what is an expatriate to do? A great place to start the process is with the simplification of your finances. To help you to begin to understand them again, it might be wise to start by closing the products you hold on the periphery. We all have them. It might be a bank account that you rarely use or an investment that you stopped saving into years ago and now you cannot even remember the name of the firm involved.

This is one of my golden rules of personal finance. If you cannot remember what the payment is for, or the name of the company involved because you have lost interest, it is probably worth reviewing whether or not you still need it.

By removing the non-essentials and concentrating on the parts that you actually need and use, your finances will instantly become easier to manage. There will be less paperwork and less to think about and store. In turn there will be less that might need to be reported to a tax authority somewhere. Although it might sound small and inconsequential, lightening the load almost always helps you.

• Stuart Langridge is an independent financial adviser.

Personal financial reviews can uncover all types of oddities, especially for expatriates. Moving between countries and employers is virtually guaranteed to confuse your financial situation.

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