Students often say their time abroad was extremely empowering and taught them valuable life skills beyond what was learned in the classroom. One of the first opportunities to develop these important skills is to build a budget for your upcoming international experience. Doing so can alleviate a lot of stress and make a world of difference as you embark on one of the most exciting adventures of your life!
We have compiled a list of financial tips to help you prepare for your time abroad, which could be applied to your life at home, too!
Make a list of all that you hope to accomplish while abroad. Maybe you want to visit famous monuments, like the Eiffel Tower or the Colosseum. Maybe you want to go on your own foodie tour of Ireland (there’s more to it than just potatoes!). Maybe you’d like to take a few guitar lessons with a real flamenco guitarist. Or maybe you want to visit the Great Wall of China or go spelunking in Latin America. Whatever it is that you want to do, it’s easier to keep track of it all when you physically write it down.
Put an estimated cost next to each item. The amount of money you’re going to need to achieve your goals might be scary. This is why planning is important. Also, keep in mind that API has already scheduled a number of excursions into your program — and since they’re already included in the cost, you don’t need to factor any extra money into getting to these exciting destinations.
Prioritize these activities/goals. Always consider your “opportunity cost” of any purchases. Spending oodles of money in one place — shopping at fancy boutiques, for example — prevents you from spending money somewhere else, like seeing a flamenco show. Is buying clothes in Spain really worth missing out on a chance to see a traditional Spanish cultural event? Is there the next best alternative use of your money? You decide!
Use this info to write down a budget. Designate a certain amount of money to each item on your list and stick to it. This helps cut down on “impulse spending” and “buyer’s remorse.” Don’t forget to budget in some money for miscellaneous purchases as well, like souvenirs and other trinkets. As long as you stick to your budget, you’re in control of your spending.
Remember to save for emergencies. You never know what could happen while abroad. You may wind up getting lost while exploring a new city and be forced to take a cab back to your hotel. Expect the unexpected, and have some money set aside to pay for it.
If you plan on using credit cards, use their online apps to keep track of how much you’re spending. Online banking and credit card apps are an easy and efficient way to manage how much you’ve spent and how much of you have left to help keep you on budget. Take advantage of your time overseas but use the tools available to you so you avoid major financial difficulties when you come home.
Know how much your bank and credit card companies charge for conversion fees and withdrawals. Do some research before committing to using certain cards, as there can be substantial differences in these fees. A percentage point might not sound like a lot — but consider that you may be using these cards regularly over the course of your stay abroad, and those “little fees” can add up to hundreds of dollars (if not more!). Some banks also offer no withdrawal fees if you use banks within their network, so investigate this before you end up depleting your account faster than you’d expected!
Know the exchange rate. Remember that Euros, Pounds, and Australian Dollars (or any other currency!) aren’t worth the same amount as U.S. Dollars. Get in the habit of making a rough calculation of how much you are actually paying for items at the supermarket or at the various shops you frequent. It may be more than you’d think (it also may be less—it works both ways)! The difference can really add up quickly when making big purchases, like plane tickets. Here’s a helpful website to get you started.
Look for student discounts. Don’t be afraid to ask for student discounts, especially in Europe. Student traveling is really popular, and businesses are sympathetic to your (lack of even a) small income. In many cases, you’ll have a student ID card from your host university, which you can use to get some great deals on train tickets, hotels, or sightseeing tours.
Ask your API Resident Directors for insider tips on where to find good deals. As local experts, RDs have years of experience working with students and helping them to find safe, reliable, and affordable deals for all sorts of things — like tasty but affordable empanadas in Buenos Aires, inexpensive flamenco lessons in Sevilla, or student discounts on museum entrance fees, or stores with quality products at a good price simply because they are located outside of the major tourist areas.
We know that you will have an incredible and enriching time abroad. Taking just 10 minutes a week to manage your finances and your budget will give you a lot more peace of mind and will help you to make your time abroad far even more amazing