How Much Money Do You Need For Your Time Abroad?
This is a good question & one that is very difficult to answer but it is very important to plan a budget before you leave the U.S.
- Your program fee probably includes your tuition and housing, and may also include basic food needs.
- You will need to bring enough funds to cover all other expenses including: books, local transportation, personal items, snacks, travel and any other incidental expenses.
- The amount you will need for incidental expenses will depend on your lifestyle as well as local costs. You will also have to take into account exchange rates, foreign transaction fees, and differences in “spending power” from U.S. dollars to the currency of your host country.
- How much money you spend in a typical week in U.S. dollars may be different in the currency of your host country. It is a good idea to monitor your spending and pay attention to how much things cost.
- In general, “living as the locals do” is usually the cheapest way to go. It also is advisable to prepare a budget; the Study Abroad Cost Worksheet below can help you get started.
Study Abroad Budget Worksheet
An important part of preparing for your study abroad experience is creating a budget. The following link is a Study Abroad Budget Worksheet that covers example expenses that you might spend before you go abroad and while you are abroad.
Cash
If you are bringing cash with you, avoid bringing a large amount. It may be wise to have some cash currency before you enter your host country, but you can change a small amount of money right at the airport or withdraw money at an ATM. Remember that carrying cash is always risky! You will be better served with an ATM or credit card.
Credit Cards
Credit cards are valuable for big purchases, emergencies and also cash advances, although your credit card company will often charge a higher interest rate for cash advances. Most major credit cards are honored abroad (e.g. Master Card or Visa), but there are exceptions. Credit cards are particularly useful for hotels, restaurants, airline tickets and car rental agencies. When you use a credit card, the company makes the exchange rate purchase for you, reflecting the exchange rate on the day your credit card transaction is processed. This amount may be more or less than what you thought you were paying at the time of your purchase. You will be billed in U.S. dollars on your statement and sometimes you will see the foreign exchange conversion listed as well. However, the interest charged on an outstanding balance adds up quickly and it is very easy to get into debt. You also need to leave someone you trust in charge of paying your monthly credit card purchases since most credit card companies will not send bills to non-U.S. addresses. IMPORTANT: Notify your credit card company in advance that you will be traveling overseas, and know what your credit limit is.
A prepaid Visa Travel Money Card is an alternate option to carrying traveler’s checks. Information on obtaining one of these can be found at:
https://usa.visa.com/pay-with-visa/cards/prepaid-cards.html
Debit Cards
A debit card, also known as a checking card, is excellent for international travel because it allows you to withdraw money from your bank account in the United States in the currency of your host country. If you decide to get one, be certain to ask your bank for a card that has the Visa or MasterCard symbol on it. You can use it in any cash machine abroad that has a Visa or MasterCard logo on it, and it will not be like cash advancing. Instead, when you use this debit card, it will give you a menu choice of different languages and will ask you how much money you want in the currency of the country in which you are traveling. You only need to take out what you want. The transaction will debit the money from your checking account in the United States at that day’s exchange rate, and, in most cases, no commission will be charged. Check with your bank for transaction fees. Most debit cards can also be used to make purchases abroad like a credit card. Again, make sure that the debit card is not just an ATM card. IMPORTANT: Notify your credit card company in advance that you will be traveling overseas, and know what your credit limit is.
Opening a Bank Account
In some countries, upon arrival at your new institution, you may want to open a bank account at a local bank. Most banks provide checking and savings accounts for customers and some banks will allow you to keep your money in U.S. dollars. Bank hours are generally similar to those in the United States. Many banks offer other financial services, and you may wish to compare the services and costs of several banks before choosing one at which to open an account. One bank may be more conveniently located than others; another may have more automated teller machines around town; a third may charge less to maintain a checking account. Also, in other countries, you do not necessarily have to have an account at a bank. Other options exist and you should ask other students for information.
Advances/Check Cashing
With the use of credit cards and computers, it is much easier to transfer money from a home account. Any bank that honors your type of credit card will help you draw funds in foreign currency as a cash advance. These advances are often considered a loan and you can get an advance only up to your line of credit. When requesting an advance, remember that banks always require proper identification. A high interest rate is charged if the advance is not paid back within the month. If you are cash advancing a large sum of money, you should consider a wire transfer instead. American Express offers check-cashing privileges to its clients. Any American Express office will cash personal checks from a U.S. account at no charge.
Wire Transfers/Drafts Western Union
Western Union is a good source to use if you need to transfer money internationally. A rule of thumb that you need to remember when using them is to make sure everything written on the recipient’s Passport is the exact same as it is on the sender’s information. For example, if the recipient’s first, middle and last name is written on his/her passport, then the sender must write the recipient’s first, middle and last name on the Western Union document. Any discrepancy within the document and the Passport will result in a denial of funds. For more information, please log on to:
Taxes
You may need to arrange to have tax forms sent to you or to have taxes paid for you while you are out of the country. It is possible to ask for a filing extension. Be sure to know what your tax responsibilities are and how to comply while you are away.
Export Controls (Legal)
Export controls are US government laws and regulations that require federal agency approval before the export of controlled items, commodities, technology, software, or information to restricted foreign countries, persons and entities (including universities). For more information visit: