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Moving abroad? How hard will it hit your wallet?

Moving overseas is not just about the job and the opportunities. It is also about how it will affect your wallet!

Make sure that you check out information like the Mercer survey, which calculates the most expensive cities in the world to live in. The Mercer Human Resource Consulting Survey uses New York as a base city and then calculates the cost of living in major cities based on the comparative costs of over 200 items in each location - housing, transport, clothing, household good and so on.

These surveys can give you an accurate source of information as well as a good basis for comparison.

Moving overseas is about more than just the job. You need to take into account what your quality of life is like in your home country and how you expect it will alter if you move. Just because you are earning more money in a new position does not necessarily mean that you will be better off. You may need to be able to pay for things such as rent and deposits up front when you arrive in your new country and, because you will be away from home, you
should consider increasing your emergency reserves of cash

For me, moving from Sydney to Hong Kong meant that I had to give up a house and yard. Apartment living was the norm. I also was unable to study in Hong Kong without becoming a fee-paying student and education was much more expensive in Hong Kong than it was in Australia. On the other hand domestic staff was much cheaper in Hong Kong than it was in Sydney and, as a mother of young children, this was a change I was prepared to embrace!

The difficulty that most of us face is getting access to information quickly while it is still possible to negotiate any increases in the package. As an example, we have friends who didn't think about the need to negotiate for education to be included in their employment package - in their own country it wasn't a huge expense and it didn't occur to them that it would be expensive in another country - they were wrong and with four children in their family, the move proved to be much less lucrative than first envisaged.

We also had friends who moved into totally inappropriate accommodation in Hong Kong after being told by a married family that they needed to spend at least $40,000HK per month. They didn't. As a young professional couple, these friends could easily have chosen cheaper accommodation which may have suited them better than the 2,000 foot place in the suburbs that they moved into. Don't choose the norm for married couple with children, if you are single or childless! Don't be swayed by advice telling you that you can only live in a certain area, or that you have to spend a certain amount on housing and so on, unless you know that the advice giver is in a similar position to yourself.

The best way to get this information is to do your homework. Check out the information on sites such as this and also try to work out whether the person giving the advice is in a similar situation to yourself. Advice to live in Repulse Bay or Stanley may be well and good if you are married but if you are a young single person, Happy Valley or Wan Chai may suit you better! If you have children, then think about the location of schooling first and find your home afterwards. Many countries have catchment zones that restrict which school your children can attend depending on where you live.

The next thing that you should do is to do your sums. Work out how much it will cost you to live in your new location. Factor in housing costs, food costs, education and transport. Think about whether you are planning on having a family and check out whether you are covered by maternity benefits (which can be horribly expensive if you aren't), and what the situation is regarding education and childcare.

My mistakes? I made them all. I didn't factor in education costs, had a baby with no medical coverage and shipped in IKEA furniture as it never occurred to me that, for the same amount of money, I could have bought something of better quality through the expat sales or travelled over to China and bought something truly stunning!

What else? Talk to an expatriate type bank and see what they can do. As a right brained person, I need left brained people to help me put things into perspective and do the number crunching for me.

The fact is that moving abroad could have a major impact on your finances. And you need to incorporate this knowledge before you make the move, not afterwards!

See: Top 50 rankings for cost of living from Mercer Human Resource Consulting

Dr Amanda O has been an expatriate for most of her life and can't imagine living any other way!

Moving overseas? We'll help you make most of your new life living and working abroad. Contact HSBC Bank International at www.offshore.hsbc.com or http://www.offshore.hsbc.com/1/2/international/how-can-we-help-you for more information.

Posted 07Sep05