It is not uncommon for people to misunderstand the cost of living of a place to which they are relocating, returning or visiting. Common perceptions — and so are the distance and unverified data of a particular city — can make it difficult to come up with realistic expectations.

For example, if you’ve relocated to the UAE many years ago, you may still hold some ideas about the economy and living standards at your home country as unchanged. That is hardly true in most cases. In addition to inflation, there could be a number of factors that have changed the scheme of prices and cost of living. When you decide to return, your unrealistic expectations can complicate the transition.

For those who keep tabs on such changes and visit often, the shock — if any — may not be extreme. The problem, however, is when your information is limited or your situation — like family and financial expectations — has changed drastically over the years.

To make the right decision financially, take into consideration the following points.

Which inflation

Inflation doesn’t hit all sectors equally. You may have relatively inexpensive food at your destination but overpriced tuition for your children. So when you look at what makes a sufficient income at your new place, you must consider your own list of expenses and get specific costs for each. In addition, don’t overlook any additional needs that you might require as a result of the size of your family or expectations in terms of living standards. For example, do you need additional cars or transportation? Do you need to set aside a budget for vacations or luxuries?

Survey the available options at your destinations and make sure that your budget corresponds realistically to your plans. Overlooking these details and taking an overall view of the cost of living may create unnecessary surprises down the road.

Check regulations

Whether you’re moving to a new place or returning to your home country, it is important to get a realistic view of regulations that cost you money. For example, what type of taxes you will need to pay and how much, what fees and charges that run regularly for people who live in the same area (think of everything from parking charges to utilities costs, mandatory insurance, etc)

The more research you do about your destination, the more likely you will be able to develop a budget that work. And if you’re looking for a new job, you should be able to come up with a realistic compensation range.

Understand banking

Banks don’t work just the same in every country. You will need to understand costs of credit, wire transfers and other options available to help in case of a financial crisis. In many places, it could be hard for you to get credit immediately if you don’t have a credit history. That is something to consider especially if you’re expecting a lot of upfront expenditure associated with your move.

In addition, don’t take interest rates and the availability of different financial offerings for granted. Interest rates vary drastically based on the country’s monetary policy. This doesn’t only mean that you will have to pay if you finance a car or take out a mortgage, it also means that you may not get attractive returns on savings accounts. You can develop your understanding of these basic money issues by simply reading through the destination’s local newspapers, contacting banks or just joining forums where people exchange views on these matters. In all cases, make sure that you always verify what you hear.

Rania Oteify, a former Gulf News Business Features Editor, is a Seattle-based editor.