5-minute Personal Finance Survival Guide when Moving to Australia
With its booming economy, now's the best time to move to and settle in Australia. This article helps you take care of your personal finance matters when moving to Australia.
Moving to a new country is as exciting as it is daunting because there are so many things to look forward to, and so many things to do in equal measure. With most things in life we get better at them the more we do them, however, when it comes to moving to a new country, that is unlikely to be something you’re going to do very often, and so you want to make sure you get it right if you are moving to Australia, to make sure the move is more fun than it is stressful.
That is why you need to know these five personal finance tips which will help you prepare for the move, and help you familiarise yourself with the Australian financial system.
1 – Banking
Most Australians use banks, building societies or credit unions to look after their money and investments, and access it when they need it. If you open a bank account within six weeks of arriving in Australia you will usually only need to provide your passport as identification. Make sure when you open a bank account you provide your tax file number so that you are not charged the highest rate of tax on any interest you earn.
When it comes to choosing the right bank for your needs, start with one of the bigger Australian institutions as they will have specialised migrant banking teams to help you organise your personal finance before you leave for Australia. Take a look at the bank account comparison on our site for an overview. If you can’t get in contact with a banking representative in your country of origin, most financial institutions will help you contact a banking representative online, often through live chat.
You can now choose the types of accounts you need according to how you will be earning and using your money in Australia. Think about the accounts you have before you leave and talk to your local bank about whether you can maintain those accounts while you are living in Australia. Make sure that your original account has internet banking facilities as this will allow you to transfer money between this account and your new Australian accounts.
At the same time you will still need a transaction account in Australia as this is where your salary will be deposited, it is where you will pay bills from, and with an EFTPOS and ATM card you can make purchases and withdraw cash. You might also want to consider opening an online savings account to take advantage of Australia’s high interest savings, which is at the moment at around 5.24% on average.
2 – Credit cards
If you have a Visa or a MasterCard credit card from your country of origin, you will be able to use those cards when you move to Australia, but you will be paying high foreign currency exchange fees to do so. Instead, consider choosing an Australian credit card which will allow you to make purchases online, access rewards programs and benefits, as well as build up your credit rating to help you apply for other forms of credit such as personal loans or a mortgage.
3 – Accessing cash
If you are bringing large amounts of cash with you when you move to Australia, you will have to declare amounts of $10,000 AUD or more at customs when you arrive. It is also very risky to carry large amounts of cash with you when you move to a new country, especially when you have so many other things to be thinking about, so to access your cash in Australia consider:
- Bank to bank transfers. Open your Australian bank account before you move and you will be able to electronically transfer funds from your old account to your new account through your banks.
- International money transfer. You can choose to transfer your money to Australia using one of the international transfer companies who wire money all over the world. These companies will charge you a fee, and transfer fees vary significantly between companies so make your comparisons carefully.
- Foreign currency accounts. Most large Australian financial institutions offer foreign currency accounts, dual currency accounts or multi currency accounts. You can use these accounts if you are still receiving a pension from another country for example, or you just want to keep some funds in another currency to take advantage of changing exchange rates.
4 – Superannuation
In Australia, it is compulsory for employers to contribute 9% of your income to a retirement fund. Your employer makes regular contributions to your superannuation fund, and may contribute more than the minimum 9% depending on your employment contract. You are able to choose your own super fund, and direct how your retirement funds are invested within superannuation. You are also able to make your own contributions to your super fund account and have those contributions matched by the government up to a capped amount. Or you have the choice to open a self-managed super fund which can invest in cash, property or other investments.
5 – The Australian Tax Office
Any money you earn from a job, business or investment is taxed in Australia, according to a tiered system based on the amount you have earned. The Australian Tax Office then collects those taxes. When you move to Australia you will usually become a tax resident, which means you are responsible for reporting and paying tax. To do so you will need to apply for a tax file number as soon as you can after arriving in Australia.
You must also report any foreign income you earn on your Australian tax return. The tax system can be very complicated, and if you make the wrong contributions to the ATO, you could end up having to pay a large tax bill at the end of the year. Therefore, if you are moving to Australia it is best that you work with a professional tax advisor or accountant to manage your obligations.
So there you have it. Hope this helps you consider about moving to Australia and plan it carefully.