Living in the Canary Islands is a dream for many Americans. The climate is mild, the pace is relaxed, and the cost of living is affordable. However, if you're an American with financial ties back home, such as student loans, mortgages, or credit cards, things can become complicated.
Managing U.S. based loans while living abroad takes planning. You need to understand how to manage your finances, pay bills, and maintain a good credit score. We will break it down simply, with real tips for American expats living in Spain’s Canary Islands.
Before you board that plane, take a moment to set up your finances; it will save you stress later. Here’s a quick checklist:
1. Notify your banks and lenders that you’re moving abroad. Give them your new contact info.
2. Set up autopay for U.S. bills, especially loans, credit cards, and insurance.
3. Open a Spanish bank account once you arrive, but research your options beforehand.
4. Bring backup cards in case one stops working abroad.
5. Scan all important documents (such as loans, IDs, and insurance) and store them securely online.
6. Budget for the first few months. Deposits, fees, and setup costs can quickly add up.
Budgeting works differently in Spain. Loans aren’t used as heavily as in the U.S., and cash or debit cards are common. You’ll also need to understand the euro and how exchange rates affect your finances.
Start by tracking your income and expenses in both currencies. Spanish banking is safe, but it works differently from U.S. banking. You’ll need a Spanish IBAN to receive payments or pay local bills. Most local landlords, gyms, and utilities expect this. If you earn in U.S. dollars and spend in euros, changes in the exchange rate can impact your budget. Use tools like Wise or Revolut to make low-cost transfers and get better rates.
If you aren’t eligible for local debit cards, you can rely on the US-based services. Companies like OppLoans, ASAP Finance, and LendUp support American expats and offer a wide range of money services you can easily request while being abroad. As they work entirely online, you can apply for a loan using your U.S. credentials and bank account, even if you're in Tenerife or Gran Canaria.
Borrowing loans in the U.S. and living in Spain doesn’t make you forget to repay them on time; you are still obliged to make regular payments, and failure to do so can harm your credit. Don’t hesitate to speak to your loan provider if you experience payment difficulties; it might have hardship programs, deferments, or flexible payment plans to offer.
Some loans can be auto-paid via U.S. bank accounts. Others might require you to log in on a monthly basis. In any case, be prepared with a good internet connection and calendar alerts. Also, make sure how your lender deals with international logins. Some loan providers block foreign access. Just in case, use a VPN or call your bank to prevent being locked out.
Expatriation implies living in two financial worlds. Without a system, it is easy to lose track, but you can implement tools that make it a lot easier.
Budgeting applications, such as YNAB (You Need a Budget) or Mint, allow you to track your expenses in both dollars and euros. They are awesome for keeping track of bills, subscriptions, and saving targets.
Banking apps ensure that your U.S. and Spanish banks have good banking apps. You will want to transfer, check balances, and make payments using your phone.
Cloud drives, such as Google Drive or Dropbox, are also useful. It is also a good idea to keep soft copies of your loan agreements, tax returns, and identification documents so that you can access them quickly when the need arises.
Even though you’re living thousands of miles away, your U.S. credit score still matters, especially if you ever plan to move back, buy a house, or get a loan in your home country. Here’s what you need to maintain good credit:
● Keep at least one U.S. credit card open and use it for small purchases. Pay it off monthly.
● Make all your U.S. loan payments on time.
● Avoid closing old credit cards, even if you don’t use them often. They contribute to the length of your credit history.
If you need to check your score, use free sites like AnnualCreditReport.org or your bank’s app. You don’t need to pay to stay informed.
Note: Spanish credit systems are separate from those in the United States. Your U.S. credit history won’t follow you here, so don’t expect to use it for getting local loans or financing services.
If you live in the Canaries, it doesn’t mean that you can ignore the IRS. U.S. citizens are required to file their taxes annually, regardless of their current location. You may not have sufficient funds due to exclusions, such as the Foreign Earned Income Exclusion (FEIE) or Foreign Tax Credit (FTC), but you still need to file.
Another thing to remember: when you exceed $10,000 at any point in the year in foreign bank accounts, you must also file an FBAR (Foreign Bank Account Report). If you miss this, the penalties can be steep.
Not knowing what to file? Turn to a tax professional who specialises in expat taxes. Many of them offer flat-fee packages.
Know that Spain has its own tax system. You are likely a Spanish tax resident if you spend more than 183 days in the Canary Islands. This implies that you will also have to file a Spanish tax return.
You don’t need a financial advisor for everything, but there are times when professional help is worth it:
● You’re unsure how to handle U.S. and Spanish taxes simultaneously.
● You want to refinance or adjust your loan repayment plan.
● You’re moving long-term and need expat financial planning.
● You’re earning money in both countries and need a tax strategy.
Look for someone who specialises in financial advice for expats or works with American expatriates. Many offer online meetings and understand the unique challenges you face.
Living in the Canary Islands gives you sunshine, ocean air, and a slower pace of life, but your U.S. financial life doesn’t hit pause. Whether you have student loans, a mortgage, or just want to keep your credit score in good shape, it takes a bit of planning.
The key is to keep your systems simple and stay on top of your accounts. Use the right tools, automate what you can, and ask for help when you need it. With a little setup, you can enjoy life in the Canaries while keeping your U.S. finances running smoothly.
