Moving abroad: managing your money between two countries

Before you go: list what stays behind

Moving abroad doesn’t cut every tie. There are nearly always costs left in your home currency: a loan, insurance, a phone plan, support for a parent, sometimes a home to maintain or rent out. Step one is to list them, one by one, with the amount and the date.

For each, you have three choices: keep it, cancel it, or move it (new address, new payment method, new beneficiary). A gym membership in Manchester makes no sense in Lisbon; life insurance might.

For the paperwork side, our guide to money at every stage of life has a section on moving abroad. This guide is about the day-to-day money.

A budget in two currencies

The classic mistake: adding pounds and euros in the same column, or converting every expense at that day’s rate and never getting totals that make sense. The simplest method has three rules.

1. Every expense stays in its currency. Rent in Lisbon is in euros; the credit card back home is in pounds. You don’t convert anything when you log it.
2. You pick a budget rate. One number, fixed for three months, used only for the overview. It doesn’t need to be exact; it needs to be cautious.
3. You review it on a set date. Every three months, compare it with the real rate and adjust.

Take Sam, moving from Manchester to Lisbon for a job paying €2,600 a month after tax. For this example, Sam uses a budget rate of £1 = €1.15.

That leaves 2,600 − 2,288.50 = €311.50 of slack. The pound commitments total £290, or €333.50 at the budget rate. If the pound strengthens to €1.20, they cost €348, or €14.50 more each month. Not a disaster, but it’s why the budget rate should be cautious and why you keep some slack. A rule of thumb: if a big share of your costs sits in the other currency, keep a buffer of around 5 to 10% on those lines. That’s a working habit, not an official rule.

For building the budget itself, our monthly budget method works as is, one currency at a time.

Accounts and cards: what to keep

Most people who move abroad end up with two accounts, and that’s a good thing.

• A local account to receive your salary and pay everyday costs without conversion fees. You’ll often need one to rent a flat or sign a phone contract.
• An account back home for the direct debits that remain, tax payments, refunds and family support. Ask your bank whether it keeps accounts open for non-residents, and on what terms: some do, some don’t.

You’ll move money between the two regularly, and every transfer has a cost: the fee plus the exchange-rate margin, exactly like sending money to family. Our guide to sending money home shows how to work out that true cost and compare two offers. Moving £290 a month is £3,480 a year; a 1% difference in the exchange rate is already about £35 a year.

One more habit: write down somewhere safe which bank, which contact number, which branch or support address for each account. Never your passwords or PINs.

Tax residence: the basics, no shortcuts

This is the question everyone asks and the one where you should be most careful. Here are the principles; then check the official guidance or get professional advice.

United Kingdom. If you’re leaving to live abroad permanently, or to work full-time abroad for at least one full tax year (6 April to 5 April), you must tell HMRC. If you don’t normally file Self Assessment, you use form P85; if you do, you complete the residence pages (SA109) with your return. Whether you’re UK resident is decided by the Statutory Residence Test. You’re resident under the automatic UK tests if, for example, you spent 183 or more days in the UK in the tax year. You’re usually non-resident if you spent fewer than 16 days here (46 if you weren’t resident in the previous three tax years), or if you worked full-time abroad and spent fewer than 91 days in the UK, no more than 30 of them working. Non-residents only pay UK tax on UK income. In the year you move, split-year treatment may divide the tax year into a resident and a non-resident part.

United States. US citizens and resident aliens are taxed on their worldwide income wherever they live, and have to file a US return to claim the benefits available to people abroad, such as the foreign earned income exclusion (up to $132,900 for tax year 2026) and the foreign tax credit. Separately, if the combined value of your foreign accounts is more than $10,000 at any time during the year, you must file an FBAR (FinCEN Form 114) by 15 April, with an automatic extension to 15 October. It’s filed with FinCEN, not with your tax return, and it’s required even if the accounts earn nothing.

Everywhere. Your new country has its own residence rules, and many pairs of countries have a tax treaty that decides which one gets to tax what. Read the treaty that applies to you, or ask someone who has.

An emergency fund for life abroad

Far from home, surprises cost more: a last-minute flight, a new deposit, a gap between jobs without the usual safety net. The usual guide of three to six months of essential costs still applies; add the price of a one-way flight home.

For Sam, essential costs (rent, groceries, transport, phone and the pound commitments) come to 1,100 + 350 + 40 + 15 + 333.50 = €1,838.50 a month. Three months is €5,515.50. Add, say, €300 for a flight home, and the target is €5,815.50. At €250 a month, that takes about 24 months (5,815.50 ÷ 250 ≈ 23.3), which is why it helps to arrive with part of it already saved. Our emergency fund guide covers where to keep it.

Keep the fund in the currency you’d need first. If the most likely emergency is a trip home, holding some of it in your home currency makes sense.

Keeping track with Binome360

In Binome360, you log each expense in its own currency, in a sentence or by voice, and totals stay separate by currency. Your accounts (local, home, cash) are kept by hand, with no bank connection. Nothing is saved until you confirm.

Binome360 doesn’t give tax advice: for your residence status, use GOV.UK, IRS.gov or a professional if your situation is complex. If you’re moving with a partner, our couples budget guide helps you choose how to split costs.

Frequently asked questions

Should I keep my bank account when I move abroad?

Usually it helps, for the payments that continue, refunds and family support. Check that your bank keeps accounts for non-residents and what it charges. US citizens should remember that a foreign local account counts toward the $10,000 FBAR threshold.

Do I still pay tax at home when I live abroad?

UK: it depends on the Statutory Residence Test; non-residents pay UK tax only on UK income, such as rent from a UK property. US: citizens are taxed on worldwide income wherever they live, although the foreign earned income exclusion and foreign tax credit often reduce or remove the bill. Check your country’s rules and any tax treaty.

How do I budget in two currencies?

Log every expense in its own currency, set a cautious budget rate for three months, and build the overview in your main currency. Review the rate on a set date rather than every time it moves.

How much should I save before moving abroad?

A common benchmark is three to six months of essential costs, plus the price of a flight home. If you’re moving without a job lined up, aim for the top of that range.

In short

Handling money across two countries comes down to one budget per currency with a cautious budget rate, an account in each country, a clear view of your tax residence (and the FBAR if you’re American), and an emergency fund that also covers a flight home.

First step: list today every payment in your home currency that will keep running after you move, with its amount and date.

Sources

• GOV.UK, “Tax if you leave the UK to live abroad”: gov.uk.
• GOV.UK, “Tax on foreign income: UK residence and tax”: gov.uk.
• Internal Revenue Service, “U.S. citizens and resident aliens abroad”: irs.gov.
• Internal Revenue Service, “Figuring the foreign earned income exclusion”: irs.gov.
• Internal Revenue Service, “Report of Foreign Bank and Financial Accounts (FBAR)”: irs.gov.

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