So it’s official… you’ve just been accepted to study abroad! It’s an exciting feeling but it can also be overwhelming. Today we’re giving you some tips on budgeting abroad. Depending on how you feel about math & money, “budgeting” might sound like a bad word. Although penny pinching can seem overwhelming, it’s one of the best ways to make the most of your time abroad. Today we have some tips to make it easier for you!
1. Keep track of exchange rates
Websites like Yahoo post daily exchange rates for all currencies, making it easy for you to check how much your US dollars are worth on any given day. You can monitor these rates for several days, especially if you plan on withdrawing a large chunk of cash. A few percentage points may not seem like a lot, but depending on how much you’re withdrawing, it can add up to hundreds of dollars.
2. Consider ATM fees & avoid cash exchange counters
Even the best student at budgeting abroad can run into problems with ATM fees! If you’re studying abroad for just one semester, and take money out of an ATM twice per week, you likely will end up spending more than $200 on ATM fees. You can limit how often you use ATM’s by withdrawing as much cash as you feel comfortable carrying (We obviously recommend that you purchase a safe or other storage facility to keep in your room for this cash).
Additionally, keep in mind that currency exchange companies often have the worst exchange rates. These companies are often in very convenient places like airports, but with a little planning ahead, you can avoid using them completely and save yourself a lot of money!
3. Come up with a budgeting abroad plan
Taking steps to save money once you arrive is one thing, but it’s important to know how much you’re spending while you’re abroad, too. In fact, not having a budget is one thing our study abroad alumni often say they wish they had done. Sometimes, students who aren’t budgeting abroad end up running out of money for things like souvenirs and fun experiences.
One of the easiest ways to budget is to keep an “envelope system”. Dave Ramsey explains it best: Write down all the various expenses you will have abroad on different envelopes; categories like “groceries,” “eating out,” and “souvenirs”. At the start of every month, place the amount you’ve budgeted for the month inside its prospective envelope. Once the money in the envelope runs out, you know you’re out of money for that category! This is a great way to keep track of your cash while abroad and also learn budgeting skills that you can use no matter where you are in life.
No matter what kind of budgeting system you come up with, make sure your parents or guardians are aware of it too!
4. Consider living with a host family – or trying recipes from your host country at home!
Living with a host family is one of the most budget-friendly options for study abroad students. These families provide at least one meal per day. In addition, students have the chance to try authentic cooking from their host country – it’s a win-win! Be sure to check if host families are available in your study abroad location.
Here’s another tip that, with practice, you can take home with you! Studying abroad provides the priceless opportunity to try foods from around the world, but that doesn’t mean you can afford to do that for every meal. Instead, try asking locals or your resident director for classic recipes to try, and making them yourself! Again, this depends on your living situation and if you’ll have a kitchenette. It’s a good question to ask as you figure out your housing.
5. Check your credit card company’s currency conversion fees
If you’re going the credit card route while abroad, be sure to call your credit card company to confirm how much they charge for a currency conversion fee. Usually, this around 1-2%, which is sometimes a far better fee than an ATM withdrawal fee or currency exchange rate. There are also some credit card options that offer zero fees. Do some calling around to see if you qualify.
The important thing to remember is that budgeting abroad makes it possible to make the most of your experience.
When you’re mindful of your finances, you create more money to travel to other countries, more time to volunteer or give back, and you create more priceless memories.