This article is in partnership with Day Translations.

Digital nomads and remote workers rely on things like more advantageous exchange rates and cheaper cost of living elsewhere from their main country of residence.

Freelancers that decide to move to a different country and work remotely often need to deal with additional costs that they may not have budgeted for initially.

Costs of Accepting Payments and Running Bank Accounts Abroad

Fast Company reported that many digital nomads get unexpected bills for various charges related to their bank accounts, particularly for international transactions.

For example, even bank accounts that promise low international transaction fees will have terms and conditions that will make you pay extra for some services such as sending or receiving money in a different currency at weekends. You may also need to pay an added fee for express payments and transfers if a creditor, such as the owner of an apartment you want to rent, asks to be paid a deposit upfront giving you a very short notice.

Some bank accounts prefer to have different premium options that include a certain amount of fee-free transactions and other perks, but there may still be other charges that are out of contract.

Another cost to consider is related to any delays in international transfers, as some payments may only clear after 3-5 business days from the date of issue. This can result in fees and charges such as unauthorised overdrafts if deposits don’t arrive on time to cover direct debits or other outgoings.

Fees are usually also linked to cash withdrawals and even in western countries like Germany cash payments are often preferred over card or electronic payments. Cash withdrawals can be extremely expensive when working abroad and carrying cash also carries an added risk, while credit cards at least offer consumer protection including refunds in case of fraud.

Finally, opening local bank accounts come with its own challenges. Apart from requesting identification and other proofs such as proof of income, some banks may require to deposit a minimum amount of money each month to be able to run and keep an account, which may be terminated otherwise.

Managing Your Finances Abroad

Overall, keeping track of money incoming and outgoing while abroad has been made easier over the years thanks to banking and investing apps. However, it may still be difficult to have a clear picture of your overall assets and liabilities when you are out of your own country, unless you collate all the information onto a spreadsheet and analyse how your money is performing.

Investments in themselves can also attract various fees, from simple transaction fees each time you trade shares, to additional taxation both at origin of transactions and at year end. For example, shares in some stock exchanges may be liable to have VAT added to them or other types of taxation at the time of purchase.

On top of it all, different countries charge different taxation rates for capital gains tax from investments. Selling shares and earning dividends get charged according to local tax rules.

Filing tax returns correctly as a freelancer working remotely may require the help of an accountant and that in itself is an additional cost to consider and budget for.

It is important to get professional advice when it comes to managing your finances, especially when you work remotely and you are receiving international payments.