What Digital Nomads Moving to USA Need To Know
Whilst the USA remains the world’s most sought after destination for immigrants, it is a far less popular destination for Digital Nomads. The reasons why are pretty obvious; the US is one of the world’s most expensive countries, finding a place to live can be difficult and to be honest the country isn’t always the most welcoming. Oh, and the less said about the healthcare system the better (it’s such a rip-off that I’m probably being billed for even thinking about it!).
Still, some of the hardest and craziest of the Digital Nomads amongst us still decide to spend some time working online and living in the US. In particular, there are still some Digital Nomads moving from UK to USA and others simply transferring money to USA.
In this post, we will look at what Digital Nomads moving to USA need to know about transferring money from UK to USA. All you Digital Nomads in USA, read on!
Digital Nomads in USA! Why?!
So yes, the primary purpose of the whole Digital Nomad thing is to earn in dollars, euros or pounds while living somewhere cheap in order to make them go further. As such, Digital Nomads often come FROM the US but head to South America or Southeast Asia for better weather and cheaper coffee. Indeed earning in dollars and living in the US, means that those dollars don’t go very far at all unless you are lucky enough to make a whole load of them.
But, the fact is that the US is an amazing country. It is big, diverse, it has great cities, music, food and culture. It has national parks and natural wonders in abundance, and an endless potential for epic road trips.
The US can also be a great place for a Digital Nomad to enhance their career prospects. California, New York and Austin are all hubs of business, tech and innovation and spending time here can offer great networking and employment opportunities for an ambitious digital nomad.
Furthermore, once you get to know your way around, the US doesn’t always have to be quite as expensive as it might first seem (you just have to cut back on luxuries like healthcare).
So when you look at it that way, it’s actually surprising there are not more Digital Nomads in the US. Check out these US Digital Nomad Hotspots.
Moving From UK to USA – The Pound and the Dollar
However, at this particular time there is something of a real fly in the ointment. The first 6 six months of 2022 have seen global inflation, a war in Europe and utter chaos in the foreign exchange markets. Whilst the dollar is persevering, other major western currencies appear to be in freefall.
In particular, the British Pound has fallen spectacularly. Whereas as recently as 2018, £1 GBP would buy $1.45, that is now down to $1.18. This means that any British Digital Nomads earning in sterling but spending in dollars are finding the cost of day to day life to be a lot more expensive.
The Euro has also fallen by 12% against the dollar, and the Aussie dollar too is lower than usual. That said, neither currency has seen a plummet quite as dramatic as that of the post-Brexit pound.
With a very weak sterling to dollar rate, it is more important than ever for Digital Nomads to seek out the best exchange rates and the lowest international banking costs. Let’s take a closer look at this.
Transferring Money To USA
Any Digital Nomad living in the USA would be wise to get themselves a USD account as soon as possible. Using a non-American bank account in the US is foolhardy as it means incurring international transaction fees everytime the account is used – that means being charged every time you withdraw $10, or everytime you pay for a coffee with a bank card.
Whilst a Digital Nomad may struggle to get a bona fide US bank account, they should at the very least be able to get a multi currency account that allows them to keep a balance in USD. Once the account is funded, they can use it to withdraw cash or buy things on card without incurring translation fees. Yipee!
Transferring Money From UK to USA
However, actually funding the USD account in the first place can prove to be quite costly in itself. In order to fund the USD account, the account holder firstly has to transfer money from their existing bank who will convert it into USD before sending it on to the US bank.
Now, whenever a bank handles an international payment, they charge a transaction fee. In the UK these fees range from £2.75 with HSBC to £15 with Lloyds and the fee is the same whether £10 is being sent or whether £10,000 is being sent.
Furthermore, the bank also gets to set the currency exchange rate, and rather than using the standard market rate (£1 – $1.18), they will use their own rate which allows them to make some profit at the account holder’s expense (for example £1 – $1.15).
Considering that the Pound to Dollar rate is already at a low, being given an even worse exchange rate by one’s bank may simply be too much for some Digital Nomads to take.
Thankfully, there are alternatives to using banks. Money transfer services are financial service companies who specialise in helping clients move money internationally. They offer lower fees and better exchange rates than the banks as well as faster processing times (minutes rather than days).
Interestingly enough, the UK USA route is quite popular right now (second only go GBPEUR) as savvy Brits are moving their money out of the UK and into the US to try and hedge against a further drop in the pound. Therefore a lot of money transfer providers are competing to offer the best Pound to Dollar rate.
Final Thoughts on Transferring Money To USA
Digital Nomads moving to USA will without a doubt find it harder than a lot of other destinations. Still, Digital Nomads in USA can make it work and find their way if they are determined and if they are careful with their money.
In particular, moving from UK to USA right now will prove expensive on account of the weak point so it is essential to find the right money transfer provider when transferring money from UK to USA.