One of the most frequently asked questions among the students who want to study abroad or who are already studying abroad is how to manage their finances more efficiently. To answer this question, you need to just read through the proven tips mentioned in this article, which would surely help reduce the financial strain you might face as an international student living abroad.
1. Understand Fees:
According to Leo Nyler, author of the study at Righteousness and Research Papers, “When you use a debit card in a foreign country, there are two types of fees.” “First of all, the foreign transaction fee is 1% of the total transaction amount for purchase or refund, which is usually 1 to 3%. Whereas the source for the third-party ATM transaction, your bank charges is a flat international ATM fee, which can range from $2 to $5. In addition to this, try to find a credit card without paying international fees to avoid extra costs.”
2. Open a Bank Account:
If you have been living in a foreign country for a long time, you can open a bank account there. Moreover, educate yourself, and see that opening a foreign account is the right thing to do, mainly when there is an emergency where you might want to send money to your family. However, since services vary from bank to bank, make sure you choose a local bank that offers students significant benefits. Also, make sure that the bank does not charge exorbitant fees for international bank exchanges.
3. Set a budget:
It is essential to know your current financial status and accordingly plan your budget. Most importantly, you need to ensure that you have a budget for each day, every week, and so forth. You will need to include factors such as monthly rent, utility bills, groceries, transportation, data charges, entertainment, study materials and travel. It will help you to avoid unnecessary expenses, especially with different currencies. As a bonus, you will be getting rid of unwanted things that might otherwise increase your expenditure.
4. Spend like the locals:
Observe local shopping practices. Also, make friends with some locals, and introduce yourself to the cheapest stores (i.e. groceries, stationery, etc.). Thus, the best way possible to minimize your expenditure cost is to spend as little as possible in the first few months so that you understand how much these goods cost.
5. Be aware of the exchange rates:
When you spend money abroad, you will see that the local currency’s exchange rate tells you how much your purchase will be in US dollars (excluding any fees) and fluctuates in rates. Moreover, it is impossible to know how much your future foreign purchases will cost. Sites such as XRate offer currency converters that can instantly compare US dollars and other currencies.
6. Find a part-time job:
You can work up to 10-20 hours a week in most countries and work full time during course session breaks. Just check if your student visa allows you to work and find a job accordingly. This extra income can help you better manage your expenses as well as increase your workforce skills. Just remember that you may have to pay some taxes on your earnings, so check out your new country rules for international students before taking the lead.
7. Keep track of your Credit Score:
If you study and live abroad with a poor history and significant debt, you will inevitably face the repercussions of a bad credit score. There are many avenues that a bad credit score can affect you abroad. For example, if you have a poor history, it can be challenging to get a loan. Also, your public record will be compromised. In the United States, bankruptcy filing lasts for at least ten years on your credit report. In such cases, you need to keep your credit score healthy, and research options open to maintain US-based ratings, credit, and credit card accounts. Be sure to talk to your lenders to find out the possible options.
8. Avoid getting scammed:
Identity theft is everywhere, especially when you travel. To avoid such misfortunes, you need to inform your bank that you are traveling abroad. If your primary card is put on hold or replaced, bring a backup bank card. Keep your passport separate from your bank cards. Also, you should keep a photocopy of your passport at home with a trusted person and keep another (if your original passport is lost or stolen). Don’t carry too much money with you every day. When you withdraw large sums of money from an ATM, keep most of it in a safe place where you live, and carry the amount you might need. Only go to ATMs in bright places. If you find anything suspicious, leave it at that. Stay with reliable banking institutions.
9. Cook your meals:
Another idea to save money as a student abroad is to start cooking on your own. Use your food budget and buy fresh ingredients for home cooking. Trust us; this will save you 30% – 50% of your food budget! If you have little time, cook in large portions and store them in the refrigerator. Reheat and keep it later, so you don’t have to cook every day.
10. Use affordable phone services:
If you are an international student in a foreign country, you must have local and international call plans. If you don’t pay attention, your bill can skyrocket soon. Although applications like Skype, Zoom, WhatsApp, and Google Pair are already available online, these applications require Wi-Fi or mobile data, which may not be available. However, it would be best if you use affordable phone services to save money.
As is evident from this comprehensive list, you can rest assured that you would definitely have no trouble during your education term in another country if you follow these basic money management tips.
Author Bio: Abhyank Srinet is a passionate digital entrepreneur who holds a Masters in Management degree from ESCP Europe. He started his first company while he was still studying at ESCP, and managed to scale it up by 400% in just 2 years.
Being a B-School Alumni, he recognized the need for a one-stop solution for B-School to get in touch with schools and get their application queries resolved. This prompted him to create MiM-Essay, a one-of-a-kind portal with cutting edge profile evaluation and school selection algorithms, along with several avenues to stay informed about the latest B-School Updates