Studying abroad is an adventure of a lifetime. You get access to a world-class education, exposure to new cultures, and experiences that change your life. But with great adventures comes great responsibility. And part of that responsibility is managing your finances.
Tuition fees, rent, or unexpected costs can be pricey if you’re not careful with your money while studying abroad. Being smart with your money doesn’t mean you can’t have fun or live comfortably. It means learning good financial habits that allow you to focus on your studies and avoid being overwhelmed with financial concerns.
So how do you stay savvy with your finances and live comfortably? Read on to discover practical money management tips that will help you make the most of your study experience without breaking the bank.
1. Setting Up a Realistic Budget
Creating a realistic budget and sticking to it is one of the best financial decisions you can make as an international student. Studying internationally often means facing costs you might not have considered back home, such as rent, groceries, transportation, subscriptions, medical expenses, dining out, and more. If you don’t plan your budget ahead of time and designate how much you’ll spend on which things, you’ll likely find yourself broke midway through the semester.
First things first, create a list of income and how much money you have. Whether it’s family support, scholarships, savings, part-time jobs, or student loans, try to calculate how much money you’ll have each month. Then separate your costs into wants vs. needs. Make sure you budget for things you need first, such as housing, food, transportation, and school supplies, before you spend money on things you want, such as eating out or shopping.
Tracking your expenses with the help of budgeting apps or a spreadsheet is also a great way to assess your spending habits and learn where you can cut back on unnecessary expenses. All students should have an emergency fund saved up in case of an emergency. Try your best to save up a little bit each month. Remember that exchange rates and inflation can also affect how far your money stretches while abroad, so be sure to check them often.
2. Protecting Your Investment
Studying abroad is an investment. So, it makes sense that you’ll want to protect that investment. Many students travel abroad thinking only of tuition payments and living costs. They don’t think about how they can protect themselves with insurance.
But if you fall ill, have an accident, get your possessions stolen, or need to withdraw from school suddenly, you could experience significant financial losses. Getting dependable protections, such as tuition and renters insurance, is a great way to reduce your risks and truly enjoy your studies, free from worry.
Tuition Insurance
Tuition insurance can help students and parents to protect themselves from significant financial loss if an unexpected event causes you to withdraw from your studies abroad. Whether a medical emergency, mental health challenges, or family emergency, unexpected events can interrupt your studies and cause financial hardship while studying abroad.
Tuition insurance from GradGuard can help protect your tuition investment when the unpredictable happens. GradGuard’s tuition insurance plans can reimburse you for non-refundable tuition fees, room and board, and more depending on your chosen plan.
It's important to make sure your study abroad program qualifies for GradGuard tuition insurance. Some things to note:
GradGuard tuition insurance can be available to students who are residents of the U.S.
GradGuard tuition insurance can be available for study abroad programs if through an accredited post-secondary U.S. institution.
Students studying abroad who pay their tuition and fees to their home school, not the study abroad program, are eligible to purchase protection.
*Terms and conditions apply
Renters Insurance
Renters insurance is ideal for students renting apartments, dorm rooms, or living with roommates. Grad Guard’s renters insurance can protect your belongings -- such as laptops, phones, clothing, and school supplies -- if they are stolen or lost due to fire, some water damage, or vandalism. Some plans also include liability coverage if you accidentally damage your living space.
*Terms and conditions apply
3. Navigating Banking and Hidden Fees
A crucial part of studying abroad is managing your finances, which includes opening a bank account and familiarizing yourself with hidden bank fees. You might find yourself paying extra banking fees if you don't get a handle on your host country's financial operations. Use these tips to stay ahead of banking fees and budgets like a pro while abroad.
Research Student-Friendly Banks
Look into banks that offer student accounts with minimal fees and international services. Many banks have accounts tailored to students. These accounts usually offer zero-cost money transfers, online banking, and lower fees when paying for goods and services. Finding a good bank before you leave will set you up for an easy and affordable banking experience while studying abroad.
Understand Common Hidden Fees
Be mindful of fees associated with ATMs, overdrafts, currency exchanges, and international transactions. If you are using a card from your home country, you may be continuously charged with high international transaction fees. Opening a domestic bank account will help you avoid fees and make it easier to manage money.
Monitor Transactions Regularly
Always keep track of your account transactions and statements. Keeping track of your spending helps you spot any odd transactions and address them quickly. Understand your bank’s policies so you don’t run into any surprises when studying abroad on your own.
4. Smart Daily Spending Habits
Developing healthy daily spending habits will allow you to remain financially stable while managing school and daily living expenses abroad. Every little purchase you make throughout your day can affect your financial health and future. If you’re not careful, you will quickly spend your money on unnecessary shopping, eating out, and subscriptions.
Prioritize Needs Before Wants
Always consider if something is a need or a want before you open your wallet. Buy things you need before things you want. Needs include groceries, transit passes, textbooks, rent, and utilities. When you organize what you need vs. want, you’ll feel confident in your spending decisions, and you won’t feel like you are missing out.
Reduce Everyday Expenses
Cooking at home is a great way to save money on food. Taking public transportation over rideshare services is another way you can cut costs. Thrift stores and pawn shops are great options to buy clothes, furniture, electronics, and even school supplies at a lower price.
Take Advantage of Student Discounts
Always take advantage of student discounts, whether they're provided by your school or your host country. Student discounts are one of many ways to make your money go further and prevent frivolous spending. Always Have your student ID on you, because some stores will want to see it before they give you the student price.
Keep Track of Your Spending
Keep track of your spending, whether it is daily or weekly. This will help you figure out where your money is going and prevent frivolous purchases. Simple things like coffee, snacks, and Amazon Prime can add up to a lot of money at the end of the month. Don't let peer pressure push you into spending money you don't have. Comparing yourself to others will only hurt you when you are trying to be smart with your spending.
Return Home with Memories and No Debt
Studying abroad should give you lifelong memories, worthwhile experiences, and knowledge rather than tons of financial stress when you return home. Many students accumulate unnecessary debt by studying abroad without budgeting properly. If you make wise financial decisions while in college, you can enjoy your experience and avoid debt in the future. Practicing wise spending habits, like sticking to reasonable budgets and minimizing frivolous expenses, can help you study abroad and not worry about debt when you come back. It also teaches you how to be financially responsible after you graduate and enter the workforce.
Above all, seek solid protection for your educational investment. One of the best tips for studying abroad without financial setbacks is to protect yourself with insurance. Reliable insurers like GradGuard offer student-oriented protection to cover you in case of unforeseen academic or housing expenses. Learn more about our coverage options.
