The United States can be a potential goldmine for expats, especially given the wealth of opportunities available in terms of employment.
From nursing to tech and beyond, there are tons of fields hungry for talent abroad for roles that can’t be filled at home.
But although becoming an expat in the United States can indeed be a sort of cash cow, money most definitely needs to be on your mind before you make the move.
Between hidden costs of migrating to the nation’s relatively complicated tax code, anyone looking to achieve the American Dream makes sure that they need to know what they’re getting into. Granted you have your visa situation squared away, here are five additional financial aspects of living about that you need to consider.
Learning the in’s and out’s of a new currency can be complicated, but one of the most important aspects of currency to consider is exchange rate. Comparing the American dollar to the Indian rupee or Japanese yen is apples and oranges: context is so important when it comes to currency.
The good news is that there are apps and calculators out there to help you wrap your head around the exchange rate in any given country. For example, Remitly helps expats sending remittance to their families by providing clear exchange rates for any amount you might be sending home.
State Income and Sales Taxes
It’s no secret that taxes in the United States are notoriously complicated, but this rings true for natives and expats alike. Beyond breaking down your tax bracket based on income, also consider that there are state-specific taxes (or lack thereof) to consider.
For example, there are five states with no sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Likewise, there are seven states with no income tax. These state-by-state quirks can be significant in terms of what’s taken out of your paycheck and may very well influence where you decide to settle down.
Whether or not you’re going to receive health insurance from your employer is a massive factor in terms of your earning potential in the United States.
For example, it might be worthwhile to take a smaller salary with a comprehensive benefits package versus a fatter paycheck that leaves you paying out-of-pocket for care. Especially if you require specialty medications, marketplace insurance via the ACA may not be realistic and therefore something you really need to do homework on before making the move.
Cost of Living
Beyond the aforementioned tax considerations, bear in mind that not all cities are created equal in terms of cost of living. While some major metro areas may be booming in terms of job opportunities and benefits like public transit, they oftentimes don’t come without a hefty price tag.
For example, making $50,000 in Colorado Springs would be comparable to making $90,000+ in San Francisco, meaning that there’s more to any given salary that meets the eye. It’s all about finding a balance between opportunities and what’s going to make you comfortable while living abroad.
Net vs. Gross Income
Lastly, an often overlooked aspect of choosing a potential employer is the difference between net and gross income. Net income is what you receive from an employer after taxes and deductions while gross income represents that amount prior.
In other words, an advertised $75,000 salary doesn’t actually mean you’ll see all of that money. In addition to cost of living, these taxes and deductions should be considered to avoid potential budgeting snafus prior to moving.
Money is obviously on the mind of anyone moving abroad, but sometimes it’s easy to overlook the fine details of finance when you’re laser-focused on starting new. With these financial factors in mind, you can better plan your life as an expat and have realistic expectations regarding what you’ll need to make your journey abroad work for you.