Financial tips for South Africans working abroad

South Africans may snatch at the opportunity to work remotely in foreign countries, but there are several financial matters that must be considered.

The Covid-19 pandemic and advancements in technology made working out of the traditional office far more common, with the amount digital nomads – those who live remotely and are free to live in different counties – growing,

However, there are several financial considerations when becoming a digital nomad, according to JustMoney.

“It’s tempting to throw up your current arrangements when you see clips of friends working beside a sunny beach or pool, and you’re shivering during load-shedding,” said Shafeeka Anthony, marketing manager of JustMoney.

“This lifestyle is not without its challenges – and you don’t want to lose out on benefits you’ve worked hard to achieve. Diligent planning is essential.”

Here are ten considerations for would-be digital nomads:

• Destinations: Although the number of countries offering digital nomad visas is growing, fees, paperwork, and duration differ considerably between countries. Research is essential.

• Budget: Would-be digital nomads must plan for fixed and variable expenses, and the budget will need to include accommodation, transport, food, insurance, etc.

• Emergency fund: An emergency fund is critical for managing unexpected situations. Three to six months’ worth of overseas living costs should be saved as it will create a financial safety net.

• International banking: Look for a bank with good international banking options with low foreign transaction fees. Multi-currency accounts should also be considered to reduce currency conversion fees.

• Tax planning: As a South African taxpayer or tax resident, you will be taxed on your worldwide assets and income, making it essential to understand your tax obligations.

• Insurance: “Comprehensive insurance is non-negotiable. Invest in plans that cover medical emergencies, evacuation, and lost belongings. Check if your current insurance covers international travel or explore specialised options,” the experts said.

• Exchange rates: Exchange rates should be monitored, as fractionations can seriously impact a digital nomad’s purchasing power. The experts said that currency exchange platforms that offer competitive rates should be used.

• Community support: Connecting with other digital nomads can also help, as online communities and forums can give valuable tips for stretching a budget.

• Retirement planning: Planning for retirement is still important, and digital nomads should create a retirement account or investment portfolio to secure their financial future. Investments should also be diversified to minimise risk.

• Continuous learning: “Stay informed about financial trends, investment opportunities, and changes in tax rules. Educate yourself to make informed decisions that align with your long-term financial goals,” the experts said.

“Incorporating these personal finance tips into your digital nomad planning increases the possibility of enjoying the freedom of remote work while maintaining financial stability and security,” said Anthony.

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