As a recent college graduate, I am familiar with the dreams of studying abroad. Living in another country is a unique and life-changing experience. The opportunity that is available to an increasing number of students today is one I fully support. It gives young people the opportunity to grow culturally, socially, academically and personally. It is also something that you may not be able to do later in life; once you are working,you can’t just take a three month vacation to move to Europe and learn to speak French.
Even though I support the choice to study abroad, I realize it’s a huge financial undertaking. It’s a decision that requires meticulous planning on various levels. Saving money and budgeting your spending both need to start several months before your trip, and continue while you are abroad. Make sure you are ready for this experience well in advance of your departure date.
Here are some tips to get you ready for your trip:
Budget and save
Decide on a set amount of spending money you want to have while you’re abroad. Divide your budget into specific categories. For example: Separate food, traveling, lodging, souvenirs and extra cash. Break down how much you think you will need for each category in your budget and set goals to save money so you actually have your goal amount.
Depending on when your trip is, break down the amount you’ll need to save by how many months you have before you leave. For example, let’s say you are leaving on July 1st. It’s January. That means you have six full months to plan and save for your target goal. Take the total of all of the different categories and divide by six. This way you will know how much money you’ll need to save each month in order to fulfill your entire budget.
Know the exchange rate
Educate yourself on the currency you will be using while abroad. The U.S. dollar doesn’t have the strength and power that it used to, and it can be surprising what a tube of toothpaste is really costing you after you factor in the exchange rate. Use a few different sources to learn about the current rates. Start by trying this currency converter from Yahoo! Finance.
Also, exchange rates are dynamic; they may not rise and fall drastically while you are abroad, but if you don’t educate yourself on this subject, you could lose a lot of money on your trip as a whole when you total up each transaction.
Order foreign currency before your trip
This tip is one that I heard about too late before my trip abroad and was unable to use, but can save you a lot when it comes to dealing with the exchange rate. Call your bank and see if you can pre-order the currency you will need for your trip. If your bank doesn’t have an option like that, ask if they can refer you to one that does. By exchanging money beforehand, you can plan when you do the exchange so you get a better rate and minimize the amount of money you lose to transaction fees.
If you don’t want to go through your bank, several sources even allow you to order foriegn currency online. American Express and AAA are just a couple that provide this service, which is not exclusive to members.
Credit cards and Debit cards
Talk to your bank and your credit card company. First and foremost, you’ll want to alert them that you will be traveling abroad (this will prevent your card from being frozen because of fraudulent activity). But also, when you’re abroad and aren’t using cash, there will be a specific exchange rate that is used for your purchases.
Is it better to use your card for purchases, or should you always use an ATM and pay with cash? I found that I saved money by using an ATM rather than going to a money exchange.
If you find that you would rather use a card instead of cash, another thing to consider is using a pre-paid card. You should use the exchange rate to calculate how much you should put on the card, and in the case of loss or theft, you should never put too much money on it. However, losing a pre-paid card can be a lot less damaging than losing your personal credit or bank card. MasterCard offers several pre-paid credit cards, but has one specifically designed for world travelers.
Pre-pay for some of your purchases
This was something that I did and was really pleased with the overall experience. I contacted a student travel agency to see what kinds of offers and discounts were available for students. There are several different levels of involvement you can have with a travel agency depending on the involvement of your university’s study abroad program. STA Travel is a great place to start if you are looking for online offers; they also have 18 local stores across the U.S.
One of the easiest things to pre-plan is participation in a guided tour. Make sure you compare prices or talk to other people who have traveled to the city or country you are going to so you truly are saving money on the tour you chose to take. The nicest part about these pre-planned adventures is once you are already abroad, all you need is the date, time and meeting location. Even though you paid for it a few months ago, it feels like your saving money solely because you aren’t paying anything directly to the tour guide.
When students make the decision to study abroad, the focus is usually on the fact that they will be embarking on an once-in-a-lifetime opportunity that will become an unforgettable experience. Although this is one of the most important takeaways from your international endeavor, be prepared for all aspects of your trip, including smart saving and faithful money management.
For more money-saving tips and tools to help you while you on all your life adventures, check out Quizzle.com, where you’ll find out your potential for credit improvement and get the most affordable credit monitoring on the web.
Also, check out these other great money-saving articles from the QuizzleWire:
- 8 Ways to Stretch Money as a College Student
- How to Mix Money When Moving in Together
- 10 Common Myths About Your Credit Report and Score
- Financial Resolutions for the New Year
Quizzle.com is the easiest way to get a complete understanding of your credit. Visit Quizzle.com to get your free credit report and score. No credit card or social security number necessary!
