How to Manage Finances While Studying Abroad
Just like life at home, life while studying abroad, requires you to be organized and on top of your finances. Once you’ve been accepted to a study abroad program, money is saved and the funding is locked in, there is still a lot of planning and organizing to be done before you leave so you can manage your finances while overseas. Here are some tips on how to avoid unexpected surprises once you’ve left home.
Know your bank at home
Before leaving to study abroad, make sure you know if your bank charges fees for foreign ATM withdrawals and transactions. If your bank does charge fees, consider opening a checking account with a bank that doesn’t. This can save you a lot of money throughout your time abroad.
Be sure to inform your bank that you will be traveling overseas. It only takes a few minutes, and not doing so result can in your account being temporarily frozen to prevent suspicious activity – an inconvenience, especially if you don’t have immediate access to a phone.
Know the exchange rate
Although exchange rates fluctuate and conversion can seem confusing, you should be familiar with (enough to have a rough estimate in your head) the exchange rate between your country and the country where you’ll be studying or traveling. This will help you calculate how much money you are really withdrawing from your bank account at an ATM overseas, and will help you create a realistic budget.
Credit or debit card vs. cash
For practical purposes, it’s good to carry a debit card with you at all times in case you run out of cash and need to make a withdrawal at an ATM. Having a credit card with you can also be a good back up, and there are many credit cards that do not charge foreign transaction fees.
In the U.S., you can use a debit or credit card wherever you go, even for small purchases. However, while abroad you should plan to complete most of your purchases using cash, which is the norm in many other countries. You don’t want to find yourself in a situation where you’ve run out of cash. If there’s not an ATM nearby, it might be very difficult to purchase anything – many bars, restaurants, or merchants may not accept debit or credit cards.
How to handle and keep track of your cash
Relying on cash while you’re means that you will have to make an effort to keep track of what you have, and make smart decisions when it comes to safety. Here are a few tips for managing your cash:
- Conceal your cash – In many countries (especially in big cities), pick pocketing is a big problem. You should avoid carrying cash in your back pocket, and instead have a method of concealing your money.
- Don’t keep your cash all in one place – Similar to concealing your cash, it’s important to have your cash divided up and not hidden together in the same place. If you happen to lose a bag or get robbed, having extra money stashed somewhere else will ensure you aren’t completely out of luck.
- Keep small or exact change – Carrying around bills in large denomination isn’t a good idea. It can attract unwanted attention and make you the target for pick pocketing. Moreover, in many countries it can be considered rude to make a small purchase with a large bill. Whenever possible, you should make purchases with exact change, but the smaller the bills, the better.
Opening a foreign bank account
Opening a foreign bank account is an option best suited for students who are studying abroad for an entire academic year. Provided that you have your proper documents (in many cases just your passport), opening a foreign bank account as a student can be relatively easy and can make organizing your finances easier and more convenient.
For example, if you plan to work (e.g. teaching English), having a bank account available for making deposits or bank transfers is safer than keeping your money laying around at home. Additionally, having a local bank account will eliminate foreign transaction and ATM fees if your bank at home charges them.
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