Category Archives: Assignment Contract

Relocation & Expat Resources – Employment and Career Issues, Assignment Contract. Information, Inspiration, How-To Guides and Tools for Trailing Spouses, Accompanying Partners, and Families in Transition.

The Fragile Finances of the Expat Trailing Spouse. Defining Moves, The Art of Successful Relocation

Women, Money and What ‘Dependent Partner’ really means. The Fragile Finances of the Expat Trailing Spouse.

The Fragile Finances of the Expat Trailing Spouse. Defining Moves, The Art of Successful RelocationUpdate: After considerable lobbying from consumer groups, the US Bureau of Consumer Financial Protection has amended the rule requiring evidence of independent income when applying for consumer credit, replacing it with a declaration of household income. This is excellent news for accompanying partners in the United States who had been denied access to credit and left unable to build an independent financial identity, in a country where a credit card or credit history is required for everything from hiring a car to setting up a cell phone contract. Sanity is restored…

I came to a horrible realization the other day that I was beholden to my husband. It sounds incredibly old-fashioned; even using the word ‘partner’ in that sentence would be wrong, because it implies an equality that I had let slip away.

The dictionary describes the term beholden as owing something to somebody because of something that they have done for you’, so if you view being shuffled from pillar to international post as a favour, the word pretty much covers it. I realized that although I live in California, where community property and a 50/50 division applies, I did not have the independent means to pay for legal advice. And when he leaves all his dirty breakfast dishes on the counter above the dishwasher for the 5 millionth time, there is a big emotional difference between don’t want to divorce my Other Half, and CAN’T…

As with the vast majority of dual career couples, when I agreed to the OH’s first relocation, I was aware that from now on my own career would take a back seat. Global mobility research discusses the change (usually reduction) in income when a couple relocate, but discussion centres around household income, rather than individual earning power.

Which is exactly what I have lost. I have never worked in professions known for lavish salaries (nursing or teaching, anyone??), but I was able to earn significant personal income with opportunities for promotion. Now, however, my sole income in drawn from the ‘household’, and as such, is vulnerable. And I’m not alone.

It’s not just those of us who relocate that are in this position. It’s anyone who has chosen to reduce or give up work to manage family commitments, whether you are in constant global motion, or have never set foot outside your home town. If you have no independent source of income, whoever earns the salary holds the keys to your supposed household income.  And while you are legally entitled to a portion of those, it requires court approval to gain access to them, whatever the circumstances. Which also requires legal counsel, who (funnily enough) will want to be paid.

Take credit cards. Over the last 20 years, we have become used to being approved for credit, regardless of our personal income; the household income has always been taken into account. Sure, the credit limit may be small, but it’s quickly increased once our payment history shows our ability to make payments and manage the account well. However change is afoot, certainly in the US, where credit card issuers are changing their rules, and making it far more difficult for the accompanying partner to gain credit (and a good credit history), unless they are employed outside of home.

Last year, the Fed ruled that credit card applications should ask about a consumer’s individual income or salary rather than his or her “household income”. This isn’t just for students under 21, but for everyone. That means that a stay-at-home parent is considered as unworthy of credit as an unemployed college kid–and seven out of eight stay-at-home parents are mothers. No one without a pay stub, no matter the value of her contribution to her household, can get a line of credit unless her spouse cosigns the account. (Anisha Sekar,  July 7, 2011)

Now, in light of the recent economic meltdown, placing more focus on individual income and ability to repay debts is no bad thing, but it does have ramifications for those of us who suddenly lose the ability to get even the most basic forms of credit like a cell phone contract or credit card. It also means that unless you are named on the account, you lose the ability to make financial decisions, access accounts and resolve disputes, which if, like mine, your partner spends a great deal of time out of the country and on air flights, can make financial management impossible.

The Other Half is also the primary name on the host country bank account, and I don’t have automatic access to his account. Typically, he goes ahead to take up his new post, while I remain behind with the children to finish up the school year and pack the house for the move. It works well for us, but does mean that he has sole responsibility for setting up basic financial services in the new location, so it is his name on the salary transfer and tax details, and therefore his name on the account, at least until we get around to updating it.

We choose to manage this by having me sign all the checks (if he signed one himself, it would probably be dismissed as a forgery), I have the ATM card and PIN number, and I’ve set up the internet banking with my passwords. And while this unusual state of affairs makes for amusing dinner party conversation, it gives me absolutely no legal right to the household funds in that account, nor access to them should he suddenly develop amnesia / get run down by a London bus / decide to trade me in for a younger, blonder model…

The mention of Tax ID and salary above should alert you to the fact that opening your own bank account is not necessarily as easy as it first appears. Requirements vary from country to country, but most require evidence of who you are, your legal right to be in the country, how you will pay tax on any interest, and how you intend to fund the account. So when you turn up with your passport and cash, you may be disappointed… However, it is something that is worth doing if you value your sanity, because things can and do go wrong, and I am willing to bet that it is you who will be left holding the can when it does. If the money is in your sole name, you have control over it; if it’s not, you don’t. Simple as that.

And finally, let me mention the dying thing. I have known a few situations where a spouse has died at a young age, and not once did I ever hear the words “well now, let’s get on and sort out the money”. What I saw were people who had their lives knocked out from under them, who were trying to cope with immense loss, overwhelming grief, and devastated children. Imagine how much worse it gets when you are overseas, your right to be in the country expired with the demise of your spouse, and all your assets (and therefore your ability to get home, to make funeral arrangements, to pay medical bills and to pay for normal household expenses) are now severely compromised. I have seen it happen, and it was horrific.

So, if you do nothing else today, do these things for me, wherever you are. Get started on your own personal credit history, even if you have to take out a secured credit card to do it. Promise to keep track of your credit score, every month. Get an independent bank account in your host country, and commit to funding it, every month. And finally, make a joint will, keep it simple and safe, and make sure it is legal in the country that you live in.

Oprah would be proud. I feel more secure already…

The golden rules of expat housing - buying a home. Defining Moves - the art of successful relocation

The Golden Rules of Expat Housing – Buying a Home


I’m not a real estate professional, so the good news is that I’m not going to try and sell you a home. Predictably though, I have made plenty of mistakes when it comes to expat housing, and have spent long hours with more seasoned expats discussing what they have learned and what advice they would offer. So here, following on from our Golden Rules of Renting, are our points to ponder when considering buying property as an expat.

The golden rules of expat housing - buying a home. Defining Moves - the art of successful relocation

Understand your assignment contract.

Many assignment contracts include a buy out clause to facilitate a quicker move for the new expat family (or one transferring to local payroll), but don’t assume that you will automatically qualify. There are often limitations on the type of property that are included, such as homes that are atypical for the local area, ones that have planning or permit issues, any covenants or contractual limitations to the property or ones that you bought without conforming to company assignment policy.

In addition, buyout clauses tend to offer a ‘competitive market value’ for your home, which in plain terms means a price at which the property will sell within three months. For expats whose home location has a slower housing market, this can mean a substantial reduction in home value.

Understand your finances.

Since the 2008 financial meltdown, rules and restrictions governing mortgage eligibility have tightened  significantly. To the expat, this means  you may have difficulty qualifying for a home loan or that your limited local credit score only qualifies for the higher interest rates.

Talking of credit scores, you are going to need one if you plan on applying for a home loan. While some lenders will allow your international credit history to be taken into account, many won’t. Establishing and building a good local credit score means taking out some form of credit agreement as soon as you arrive (the length of credit history is one of the crucial factors in your score), and then managing it carefully, especially in the year preceding any mortgage application. For more information on credit history, scores and how they are calculated, check out the links at the bottom of the page.

When you are deciding what you can afford, it’s not just about the mortgage payment. Investigate any fees, charges and taxes that may not be standard in your home location. Most fees and taxes are calculated according to home value, and where international assignments are concerned, there will be wide variation in housing values.

Council taxes, local authority charges or property taxes are all calculated on home values, but need to be researched thoroughly  before you commit to buy – they vary hugely between states, regions and countries, and can add up to 25% to your mortgage payment.

There are also huge variations globally in terms of real estate agent fees and as an expat, you are likely to incur these more frequently than a permanently local employee, so include them in your financial calculations from the outset.

Be realistic about your timeframe.

When you take on a long term assignment or switch to a local payroll, it’s tempting to believe that you will live in your new home for the long term. However, unless you are emigrating or retiring, you are far more likely to be in your new home for between 3 and 5 years –  currently considered a ‘long term assignment ‘s international relocation terms. Your company may well help you with the moving costs, but I can guarantee you will have invested plenty of your own money in furnishings, maintenance, remodeling, landscaping and services. For assignments of under 5 years, renting will almost certainly be cheaper, so consider your motivation for buying very, very carefully, and be honest about the real costs over your assignment duration.

Understand the work involved.

A home is the largest single purchase you are ever likely to make, and involves a great deal of money, complex legal requirements and a team of people. If you haven’t already bought or sold a home, be prepared to expend a considerable amount of time, effort and emotional energy. If you are selling a home it’s even worse; open houses, viewings, contract negotiations and surveys are all demanding your attention just at the point you need to concentrate on planning your own relocation. There are ways you can minimize the effort involved (see list of tips, below) but still, know that if your relocation involves a property sale, you are less mobile, less focused and at the mercy of the buyers market..

 

STILL WANT TO BUY?

If all of our advice hasn’t made you run screaming for the hills, you must be serious about your plans to buy a house. From experience, the rules for buying a house as an expat are a little different, and for many of us, we have learned them the hard way. Luckily for you, we’re here to let you into our ten secrets for making your life in global transition a while lot easier..

1. Get a good real estate agent with a proven track record in the local area and who you trust to work in your best interests. Sometimes, this also means telling you what you don’t want to hear.

2. Listen to your real estate agent. Even if you don’t like what they are saying. You don’t have to agree with everything they tell you, but you do need to consider their advice.

3. Buy small. I love cathedral ceilings and huge family rooms, but experience has taught me that furnishing, heating, decorating and lighting them is more expensive than it seems. And nothing will fit in the next house – I guarantee it. A small home means that you have less debt, lower ongoing expenses and your house is far more rentable should you need to move. Oh, and it’s cheaper to heat, light and decorate..

4. Buy popular. Spend time watching the local real estate market nd understand what sells quickly, because if you get the offer of a lifetime on the other side of the globe, you are going to need to sell your house as fast as possible. Add in that most relocations have a very short turnaround time, it avoids the unpleasant situation of the working partner being transferred while the rest of the family wait behind for the home to sell.

5. Avoid quirky. By quirky, I mean anything that may raise red flags on inspections, or reduce your pool of potential buyers. You may love the murals in the front entrance, the 1920’s themed bar area or the garden gnome habitat, but everyone else is just adding up the cost and effort of removal.

6. Avoid fixer-uppers. Oh, I know, you love a project – but try to limit yourself to work that can be done in under six months and on a moderate budget. You are in the unenviable position of not knowing anyone well enough to call in favors, you don’t have a list of tried and trusted tradespeople, and no matter what the company says about your assignment being 3-5 years, if it ends early, you are stuck with a half-finished property..

7. Limit your spending. I have lost count of the property listings that I have seen which detail the huge amount of money spent on granite countertops and maple cabinetry. Neither of which I would want in a kitchen – give me white cabinets and butchers block every time. If something is very important to you, by all means go for it, but don’t for a minute assume that you will get your money back when you sell. Keep your spending proportional to the value of the home and the budget of the local buyers, and if in doubt, get a real estate agent to give you advice, rather than the contractor who would be doing the work. Realtors get very, very tired of sellers who are unrealistic about the true market value of their marble whirlpool spa.

8. Get permits. Make sure that any work you do is fully documented and inspected if necessary, and use licensed contractors. It’s not just about safety and quality, it’s also about having all the necessary paperwork when it comes to selling. The collapse of the financial markets has meant that lenders are being far more cautious about the properties that they lend money on, and any irregularities that the survey turns up may void the sale. In addition, it may invalidate any buyout clauses in your relocation assignment contract. You have been warned.

9. Ask your real estate agents for recommendations for tradespeople. They usually have a fantastic contact book of people who do work well, quickly and inexpensively, and most importantly, don’t leave a job unfinished.

10. View your home as a consumable, not an asset. In financial terms, expecting to make money on a property in the short term is highly risky, especially when it is your family home that you are speculating on. Even experienced property owners have been burned in by the recent fluctuations in the housing market, and they have the advantage of catering solely to the market, rather than having to make compromises to meet your individual family needs. Consider any  spending in the same way as rental payments, and you shouldn’t go too far wrong.

Now it’s your turn.  There’s an unlimited comments section stretching out below, just waiting to hear about your triumphs and disasters – I’ve got a great Dulux Paintmate story to trade….

 

Online Resources & Further Reading 

 

FreeScore – provides information on credit scores worldwide 

MyFico Credit Basics (US)

US Federal Trade Commission Access to Free Credit Report information (US)

Credit Karma (US) Website providing ongoing free credit score & management information

Money at HowStuffWorks.com’s overview of the credit system.

BBC Guide to Credit Score (UK)

BBC Guide – How to Check Your Credit Rating (UK)

Money Saving Expert – Consumer Guide to How Credit Rating Works

 

 

Expat Housing - Renting a Home. Defining Moves - The Art of Successful Relocation

The Golden Rules of Expat Housing – Renting a Home

Expat Housing - Renting a Home. Defining Moves - The Art of Successful Relocation
Make sure that everyone involved understands your housing needs.

It’s a time of turmoil in the Defining Moves household. After 14 years, we are finally selling our family home in Wales and transferring our home status to the US. It’s a funny feeling – despite living in six different homes since leaving, the process of finding and buying a new home away from “home’ is daunting.

The summer vacation is the peak time for family relocation; it’s the end of the school year, so educational transitions are easier, and you have more time to accomplish the endless tasks that moving yourself, your life and your family requires. With this in mind, I’ve put together a collection of golden rules garnered from international expats (I hesitate to use the term experts when there are quite this many blunders involved.) across the globe. Every one represents one of us learning the hard (and usually expensive and/or stressful) way, so take note. Today we feature renting properties – on Saturday, it’s the turn of the homebuyers..

N.B. If you are relocating with children over the summer, read this first.

Do your research.

Even if you have a Destination Service provider or relocation counselor assisting you with your search, don’t hand over all responsibility to them. Check out online rental listings, contact local realtors and ask amongst the expat community, international school networks and amongst work colleagues – often property owners use word of mouth or private advertising to find tenants independently, and you will get a much better idea of what is available and what you can expect to pay if you do a thorough search.

Understand what is both usual and available in your host location. In the US, for example, for a room to qualify as a bedroom it must contain a closet. In Europe, there is no such rule, and storage tends to be more limited, en suite bathrooms far less common and kitchens more basic. You are also more likely to be doing the yard work yourself, so be warned.

Check the standard of construction, even in newer housing, especially in less developed countries. While the houses may seem new and shiny with every modern amenity, leaky roofs, substandard electrics and insufficient water supply are very, very common. Where the local infrastructure is poor, ask to see the water supply and storage system (and whether it is mains, brought in by tanker, from a bore hole etc.) and how it is pumped into the main house. For electrics, ask to see previous bills, note whether there is a generator and look at the quality of installation. Is the property on mains sewerage or a septic tank, and when was it last emptied? And finally, from bitter experience, check for stains on the ceiling and around the floors to see what happens when the rains come..

Look at lots of properties and meet either the landlord or the property manager in person. If you don’t feel comfortable with them now, imagine calling them when the toilet backs up at 10pm.. Reputable landlords will be happy to supply references from former tenants (it’s even better if the former tenant is showing you the property), so don’t be shy about asking for them.

 

Get your finances in order

Most landlords will run a credit check, and it’s easy when transitioning between countries to lose track of payment due dates, utility fees – even medical bills. Once a bill falls 30 days past due (and sometimes even earlier) it shows up on your credit report and can negatively affect your credit rating, score, interest rate qualification criteria, home insurance rates and how you are viewed as a potential tenant.

Safeguard your international credit score before you leave your home location, by clearing any outstanding debts and payments, and set up direct debits or standing orders for ongoing recurring payments. When you arrive in your new location, get a secure PO box for mail forwarding rather than using the interim housing one – one glance in ‘your’ mailbox will tell you how many former tenants have been through and are still getting mail to that address. Then consider taking out a secured credit card, cell phone contract or other available credit to get your score started as early as possible. Take professional advice before taking out any credit – even a store or fuel card – if you plan on applying for a home loan. Every credit check, successful or not, has a negative impact on your short term score, which pushes up your available interest rates ..

 

Lifestyle Priorities

One of my wise friends gave me the advice to ‘shop for neighborhoods, not homes’, so spend some time working out what your priorities are before you sign on a six month tenancy agreement. For those of you with children, schools will almost certainly be at the top of the list, but also consider what will be beneficial or frustrating in day-to-day life. Parking, low traffic, good local amenities, parks, access to of leash dog trails, a diverse community with local events, libraries and good food are all on my list, but you may be looking for sports facilities, a supportive expat community and nearby shopping. The choice is yours, but make it before you drive the realtor mad, hey?

If you are staying in the same location for an extended period of time, consider the longer term costs. Many expats transfer to local payroll while still overseas, and allowances for private schooling, airfares and housing change. Will your income support private schooling long term – and if not, what are the local schools like? What college fees will you pay? Recent studies have shown that many expats’ current lifestyles are affecting their long term financial health, so don’t fall into the trap of living beyond your actual income and relying on expat allowances for the rest of your working life.

 

Consider the costs.

I love cathedral ceilings and picture windows. After two years in the East Bay area, with it’s 90 degree summers and breezy winters, I’m very, very glad that utilities are included as part of the tenancy agreement – especially when you have 79 internal light fixtures, not including lamps. Seriously.

There are the obvious costs, like transport into town or school, availability of public transport, memberships and maintenance fees, but there are also the ‘keeping up with the Jones’ costs that sneak in. The more affluent the community, the greater pressure there is to maintain the same standard of living, entertainment tends to cost more, and the local services, stores and amenities will cater to a higher disposable income. You have been warned..

 

Paperwork

Read the contract, and get professional advice about the local rules for both tenants and landlords. In many cases, the contract is difficult to enforce without a lengthy and costly legal battle, but it does serve as an early warning system of how experienced, knowledgeable and trustworthy your landlord is. A basic contract should include at the very least a name and address for both parties and the home for rent, the rental sum (and what it includes in the way of utilities, furnishings and any other applicable fees), the duration of the tenancy, the responsibilities of the landlord and tenant (garden maintenance, gutters, etc), any rules the landlord may have regarding treatment of the property (picture hanging, use of candles, parties etc) and an inventory of condition and contents of the property.

Before you sign, check whether the property is in financial good standing (your realtor or destination service provider should be able to help you with this) – tenant evictions because the house is being repossessed by the lender are increasing, and you have both the inconvenience of an unscheduled move and a lost deposit.

Do a move-in walk through with the property manager or landlord before your household goods arrive, and take lots of pictures, especially of any wear and tear or damage. And finally, get a receipt for each and every payment (especially the deposit) or at the very least, have a clear official record of the transaction.

 

Security

It’s our final piece of advice, informed by the experience of a friend of a previous tenant walking in unannounced at 7 am. Ask the landlord to change the locks. Establish who else has a key or access to the property – cleaners, gardeners, property managers, landlords – and what are the rules for permission of entry. Our front doors are the most basic form of security, and yet it’s the one thing that we all forget or take for granted. If you have an alarm, get instructions on how to change the code, and do it the day you move in. And then don’t do as a friend of ours once did and write the code on a Post It note next to the keypad. Hmmm.

 

 

Essential Expat Information - The Hidden Costs of Relocation - Defining Moves, the Art of Successful Relocation

The Hidden Costs of Relocation (and how to reduce them)

Essential Expat Information - The Hidden Costs of Relocation - Defining Moves, the Art of Successful RelocationWe never manage to move cheaply. We’re on our seventh home in 11 years and currently looking for our eighth, so you would think we would be experts by now. But relocation is an expensive business – the packing, shipping, storage, tax filing, document preparation and transportation are just the tip of the iceberg.

We get wooed by the mouthwatering figures presented in the relocation package, and at that point, grown adults start confusing their employer with Santa Claus. They’re not – those figures have been created by a calculator loving accountant somewhere, and have not been put together with the sole purpose of making you happy. Quite the opposite, in fact – they reflect the minimum sum that the company feels is appropriate to get you established wherever it is you are going. And by established, they are not referring to the new Laura Ashley room set that you have been drooling over.

So, after reviewing three years of detailed accounts from the Defining Moves household, here are our top ‘hidden’ costs of relocation, and what you can do to reduce them.

 

Paying off past credit.

It’s money that you have already spent, but it’s still a cost to consider as part of your relocation package, because I’m pretty sure that if you read the small print, you will discover that credit companies take a dim view of you leaving the country.. When you took out that kitchen / bathroom / Laura Ashley credit agreement, the three years interest free credit seemed like a good idea. Now you are stuck with a hefty bill and maple cabinetry 3000 miles away..

What you can do. If you are even thinking of relocating, don’t take out loans without having the money to pay them off immediately. Your loan contract will almost certainly include a residence clause, you will need money to relocate to your own new home, and if you are planning on renting out your house, you are going to need an emergency fund if your home is empty, damaged by tenants or requires emergency repairs.

If you think you need to spend money on your home before selling or renting it, consult a property professional before you actually get out your wallet, and consider carefully the return on any financial investment.

Interim cost of living.

Most assignments allow for 4-6 weeks of interim living allowances, but it’s easy to go over budget once you are there. Typically, you are spending time looking for more permanent accommodation, finding your way around and getting established and you don’t have the time, the facilities and the storage space to cook for yourself. Your entertainment tends to be outside the home (i.e. cinemas, restaurants, shopping malls) and costly, and you are potentially paying for storage of your household possessions.

What you can do. Try and find interim accommodation with a kitchen and enough food storage to avoid daily trips to the grocery stores. Consider taking packed meals with you on days out (yes, I know I sound like my mother, but has anyone else ever noticed that when hunger strikes, the nearest cheap and healthy eatery is 25 miles away / back at the previous freeway exit?). If you are going to be eating out for at least one meal, make it lunch – typically you pay between 25 – 35% less for a similar meal at lunchtime, and portions are often smaller. Your wallet and your waistline will thank you.

Find your local library and parks, so when you are desperate to escape the confines of the generic wall color and furniture, you don’t need to pay for it. Consider joining a class, club or volunteer group so that you are meeting people – anything that gets you out without a price tag attached.

The Cost of No Credit.

You would think that in the world of the internet, email and instant access, business and financial services would be able to establish your creditworthiness over a wider geographical range. But no, while hackers in China can access your accounts and make merry with your credit cards, the financial establishment can only judge you on your local credit history. Which, bearing in mind you have just walked off the plane, is precisely zero.

This has a huge impact on your local expenditure. In the short term, you will be putting down hefty deposits for everything from cell phones to utility services, will struggle to get any sort of credit card, and will be paying international fees for any transactions using your home country bank account or credit card.

In the longer term, any loans that you try to take out will be at a higher interest rate, and will usually require a large deposit to qualify.

What you can do. Many banks now offer global accounts, so if you are going to be paid in your home country currency, consider applying  – especially if you will be transferring money regularly. If not, there are many reputable online Foreign Exchange providers who offer far better rates and easy to use systems. Test them out with small amounts first so that if something goes wrong, you haven’t lost an entire month’s salary.

If you are planning on using your existing account for international transfers, negotiate rates and ask about rate thresholds – often there are better rates for larger amounts.

 

Home Furnishings.

Anyone who has relocated before will tell you that for the first 3-6 months, their living expenses skyrocket. Setting up a home is expensive – which is why we have bridal showers, baby showers and wedding gift registries for newly weds. If you are lucky, you have the slightly less exciting interim allowance, which covers the basic cost of reestablishing residence, but doesn’t allow for the cost of making it into a home. It also does’t allow for the considerable time pressure, which is why when we move we tend to head for the nearest department store and get furnishings that ‘will do for now’, with the intention of replacing them later. Not only do we end up paying full price, we end up paying out twice.

What you can do. Research home stores before you go, and if you can see that items are expensive or difficult to find, consider adding them to your household goods shipment. Avoid shipping things that require specialized parts / care / refills unless you have regular visitors from home who are willing to act as couriers.  Find out where locals buy home furnishings and when the sales are on. Consider outlet malls, consignment stores and borrowing items for the short term. Look on local noticeboards for “Moving Sales”.

Brand Awareness.

When you live somewhere, you develop a store / cost hierarchy, which assigns quality and cost to items sold in a store. If we want something cheap that may not last, we head to Walmart. If we are willing to pay more for something more permanent, it might be Pottery Barn, Marks & Spencer’s or a local department store. If alcohol is involved, we may find ourselves in Restoration Hardware.. Whatever your home location, you have preferred stores that carry the brands and products you want at a price that you are willing to pay, and you can set your budget accordingly. When you move, all this goes out of the window and you find yourself spending a fortune in fuel driving around trying to locate bed linen, laundry detergent and a pair of pink tights for the school play – all of which you end up paying full price for, because you have yet to discover where the deals are.

Waste.

Not only do you not know where to buy things, you don’t know what to buy. You would think a move between countries speaking the same language would make this easier, but the marketing departments have ruined it by changing the names on even the most familiar products. For the first year in the US, every contact I had with a British expat included discussion about laundry detergent, and the choice thereof.

The same applies to foods, clothing, furnishings, electronic appliances and even services – you don’t know where to go and what an acceptable price range is, and you end up paying for brand names that you know – the ones, inevitably are more highly priced. You buy a car from a large dealership rather than from a small used car lot, you get it serviced there because you don’t know any reliable local mechanics. You buy your furnishings at full price because you didn’t know about half price Wednesdays, and you have no idea what you should be paying for   bread.. So you waste money on a higher quality than you might need, and you waste foods

What you can do. Ask for recommendations, samples and referrals. When you meet people with children of similar ages, ask about anything relocated to children. Receptionists everywhere from schools to doctors offices are a mine of useful information, and once you have found one good provider, ask them for the names and numbers of their favorites. If you have managed to find yourself a mentor, download our mentor checklist and ask them for their help. I am notorious for stopping people in stores and asking them everything form where they get their hair done, to how they get their child’s karate kit to stay so white. Most people are delighted with the compliment, and are very happy to share the information.

Check out the manufacturers. The names and packaging are all designed to appeal to a local audience, but many big manufacturers have a global presence. To help you narrow your choices, start with products by the same company and work from there.

If you have a realtor, consider asking them for a list of their preferred providers – they will not only have a list of reliable and reasonable tradespeople, but if they are involved in staging homes for sale, will also know where to buy attractive, inexpensive home furnishings (they will also now the more expensive places too!), and can give you an overview of the different price ranges of the various stores and businesses in the local area.

 

If there is one thing I have learned over the past 11 years, it’s that it is impossible to predict your true costs up front – but they will happen, no matter how frugal you are. Our solution is to start a moving fund before we go, keep a close eye on our spending and to travel as lightly as possible. Now it’s your turn – what are yours?

Vintage photo of five girls on a horse

Essential Expat – Negotiating your International Assignment Contract

Vintage photo of five girls on a horse
Photo courtesy of the State Library of Queensland

 

 

 

 

 

 

 

 

 

 

 

When it comes to international assignments, relocation policy is not just a ‘one-size-fits-all’ affair. Not only is there flexibility to cater for specific individual needs within the various policies in use, there are also plenty of potential pitfalls to consider too. So what are the main areas that you need to understand when negotiating your expat assignment contract?

Home or Away. There are now a number of different types of contracts being used by the HR and relocation companies to manage your assignment. The two most common are local (including local plus)  and international. Local means that you will be temporarily governed by the employment pay and conditions of the host country, and aims to ensure parity among employees within a specific location for the duration of your contract. It can mean a increase in salary for more expensive regions, but a decrease for less expensive, and can significantly affect annual vacation entitlement. Local plus provides for additional needs or expenses incurred because of your temporary expat status, such as international school fees and trips home.

An international contract means you continue to work under the terms and conditions of your home location, regardless of the salary and benefit entitlements in your host location. As a comparison, European employees on an international assignment in the US would probably be entitled  to more annual leave days than their American counterparts, whereas US employees heading to Europe would find the opposite was true.

Matching Up. Once you have established what type of contract you will be working under, you need to look carefully at the terms and conditions of that contract, most specifically with regard to equalization. You need to be sure that the package provided gives you the same (or better) standard of living as you would have in your home location. It is more than just the immediate basic requirements – housing, healthcare, schooling, transportation, financial and legal status – you also need to consider the longer term: school planning, college eligibility and fees, provision for dependents becoming legally adult, access to legal services should you need them, long term medical and social care, financial planning, tax implications and superannuation (company pension plan). You will need to do detailed research in advance with reference to your specific individual and family needs, and if you have a preliminary visit, try and talk to resident expats to get a realistic picture of what the cost of living in your host location might be, and what challenges to expect. Don’t assume that the information given by the relocation management company is accurate – they use a generic formula that may have little relevance to your situation and needs. There are plenty of resources available to help you – Living Abroad, the ExpatInfoDesk , Journeywoman and Expatwomen all have country specific information and contacts that can help you understand what you are getting into.

Homeward Bound

“There is nothing like returning to a place that remains unchanged to find the ways in which you yourself have altered.” – Nelson Mandela

What happens when your contracted assignment is over? In an ideal world, there is a clear progression that goes beyond your repatriation, and provides for a smooth transition back to your home location.  Even with successful international assignments, many people have discovered that repatriation is as hard as expatriation, and there is an increasing awareness that companies need to provide similar support services to move employees back to their former home successfully. And finally, ensure that you are supported should the assignment not go to plan, and either the whole family or the dependents need to repatriate early. If the situation is serious enough to make you leave, the last thing you need is to have to manage and fund your own return journey..

Additional resources:

Expat Info Desk – Negotiating your contract

ExpatArrivals – Expat contract negotiation

BritishExpat – Negotiating the expat contract