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6 Smart Financial Plans Before You Study Abroad

Studying abroad in college can add up financially. Before you go on your international adventure, consider these six financial strategies to save some cash.

Study abroad programs offer a unique opportunity for students to continue learning while immersing themselves in a different culture and atmosphere. During the 2018–2019 academic year, over 347,000 US students studied abroad, with more than 50% choosing to study in various parts of Europe. I studied abroad in London during my junior year of college, and some things have changed since then, but much remains the same when it comes to financial preparation. Here are some important things to consider before you jet off on your exciting foreign adventure.

1. Travel credit cards

A credit card can be an essential financial tool if you’re studying abroad. Many US-based credit cards still function in other countries, which gives you the opportunity to make purchases without having to carry loads of cash. But some credit cards are more beneficial for going abroad than others. The best travel credit cards are specifically designed for just that—traveling outside the US. They typically offer helpful travel benefits, which could include no foreign transaction fees. These fees are an additional expense, typically about 3% extra, tacked on by credit card issuers for purchases made abroad. Avoiding these fees can help you save on the purchases you make during your international studies. 

It’s also important to consider how credit cards work in other countries. Many European countries use chip and PIN technology, which means a payment terminal could ask you to enter a PIN number after inserting the card. This is different from the chip and signature method we commonly use in the US. As you compare credit cards with your parents, look for cards with no foreign transaction fees that might also have chip and PIN capabilities.

Related: Understanding the Dangers and Benefits of Credit Cards

2. ATM access

Every bank has its pros and cons, which is why you should do research with your parents before choosing a bank in college, especially if you’re planning to study abroad. One factor to consider is having easy mobile access to your accounts since the bank may not have physical locations in another country. In addition, choosing a bank with no international ATM fees is essential. You could use your credit card for most purchases, but it’s always a good idea to have access to cash as well, including money in the local currency. A bank with no international ATM fees means saving money if you have to make an ATM withdrawal.

3. Budgeting

Budgeting is important for most people, but especially for college students, and especially when you’re planning to study abroad. You likely won’t be able to work while in another country, which means you may need to take the opportunity to work now and save for travel costs, including everyday expenses. If you want to learn how to make a budget in college, it’s not hard to get started. After reviewing your total expenses and income, focus on different areas where you can save money, whether it’s eating out less or reducing your entertainment costs. Student discounts and study abroad scholarships can also come in handy for hitting your savings goals. 

Related: 7 Helpful Money–Saving Habits for College Students

4. Exchange rates

Understanding the exchange rate between the US dollar and local currency can be beneficial for you. We’re used to the prices of items where we live, but the prices will be vastly different in other countries. For example, our dollar is typically worth less than a euro or English pound. Knowing this ahead of time, you can mentally prepare for the difference in prices and values and understand how you could potentially get less for your money in a new country. This will help you spend less overall if you’re aware of what you’re spending there compared to your typical spending in the US.

5. Cellular plan

Not every cell phone plan is created equal, and some are better than others for international travel. If you’re considering bringing a cell phone abroad, having a cell phone plan that won’t result in big international charges—whether for calling, texting, or using data—could be vital for your budget (or your parents’ cellphone bill). If you don’t want a full international plan, you can take advantage of Wi-Fi calling and messaging as much as possible or buy a prepaid SIM card that can be reloaded when needed.

6. Emergency plans

Planning for an emergency can help you feel more prepared (and calm your nerves) as you travel abroad. It’s best to have at least one backup credit card stored in a safe place other than a wallet or purse. This will help ensure you don’t lose all payment options if your belongings are stolen. Your passport and other important documents should also be safely stored away. Make photocopies in case the original documents are lost or stolen. These photocopies could help confirm your identity and expedite the process of getting replacement documents at a US embassy or consulate. In addition, it wouldn’t hurt for you to have certain contact information on hand in case you need help. This could include phone numbers for your bank, local law enforcement, study abroad points of contact, housing contacts, a US embassy or consulate, and your credit card company. 

Related: How to Be Safe While Studying Abroad

While it’s exciting to think about the places you’ll see and the things you’ll learn while you study abroad, it’s also important to plan ahead for your travels. This will help both you and your parents feel more comfortable with and prepared for the upcoming journey, offering peace of mind that your study abroad experience will be safe and successful as well as less expensive than imagined.

Help finance your international adventure by looking for study abroad scholarships with our Scholarship Search tool.

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Tags:
finances financial planning international travel paying for college study abroad study abroad programs traveling

About Tracy Odell

Tracy Odell is the VP of Content at FinanceBuzz.com.

 

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