Study Abroad Handbook
The most important thing to remember is to plan your budget carefully and use any expense estimates provided by your host university.
Because you are not used to the value of the currency in your host country, it can be easy to spend more money overseas than you would at home. Pay attention to currency value changes.
MANAGING YOUR MONEY
Managing your money is one of the most important and challenging aspects of a successful and enjoyable academic experience abroad. Dealing with a new currency and cost of living are only the beginning of the challenge. Before you leave home, pay attention to the exchange rate between the U.S. dollar and your host country’s currency. Learn to think in that currency, and
don't forget a good pocket calculator. Visit the following web site to find out the current rate of exchange between the U.S. dollar and the currency of your host country: www.otn.net/onthenet/travel/uconvert.html.
Money Amounts
Ways to Carry Cash
Traveler's Checks
Credit Cards
Debit Cards
Advances/Check Cashing
Wire Transfers/Drafts
Opening a Bank Account
Power of Attorney
Taxes
MONEY AMOUNTS
How much money do you need for your time abroad? It is very difficult to make guidelines; you will probably spend however much you take. Your program fees usually include tuition, housing, and basic food needs. However, you will need to bring 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. Take a close look at your expenses and prepare a budget for yourself based on estimated expenses. Use this list to help you think about all possible expenses you may have:
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WAYS TO CARRY CASH
If you are bringing cash with you, avoid carrying actual bills. You should carry your money in traveler's checks or in the form of an international bank draft or bank check, drawn in the currency of the host country. Another possibility instead of a bank draft would be to send a wire transfer (see section on Wire Transfers). It is wise to have some cash currency before you enter your host country, but you can often change money right at the airport. Remember that carrying cash is always risky!
TRAVELER'S CHECKS
Traveler's checks are a convenient and safe way to carry money. In addition to being easy to cash, they are widely accepted for payment of goods and services at almost any establishment and usually treated as cash. Furthermore, if the checks are lost or stolen, the company that issued them will replace them at their full value, as long as you have a record of the serial numbers. It
is very important to keep the receipts of the check numbers separate from your checks; you should leave a copy with someone at home.
Traveler's checks can be purchased at just about any bank in the United States, usually with a charge of one percent of the amount you are buying. The American Express system is quite complete, and they also have offices in major cities around the world. If you are a member of AAA, you can get American Express traveler's checks without a service fee. Traveler's checks
in dollars can be exchanged at banks and money changing houses overseas, but you will always need to bring your passport with you as identification. Sometimes there is a charge per transaction (rather than per amount); it would be better to exchange larger amounts infrequently, rather than exchanging small amounts frequently, so you don't lose all your money in fees. Save the receipts from the exchange transactions in case you want to reconvert the money when you leave the country.
CREDIT CARDS
Credit cards are valuable for big purchases, emergencies, and cash advances, although there are usually higher interest charges for cash advances. Most major credit cards are honored abroad (e.g. American Express, Master Card, or Visa), but there are exceptions! Credit cards are particularly useful for hotels, restaurants, shops, 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 dollars on your statement. A word of caution: It is easy to buy something with a credit card even if you do not have the actual money to pay for it. However, the interest charged on an outstanding balance adds up quickly and it is very easy to get into debt. You will 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.
DEBIT CARD
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 U.S. in the currency of the host country. If you decide to get one, be sure to ask your bank for a card that uses the Visa or MasterCard system (the logo will appear on the card). You can use it in any cash machine abroad that has
a Visa or MasterCard symbol on it, and it will not be like receiving a cash advance. Instead, when you use this card, the transaction will debit the money directly from your bank account (usually checking account) in the U.S. at that day's exchange rate, and no commission will be charged (in most cases). Check with your bank for any potential transaction fees. Most debit
cards can also be used to make purchases abroad like a credit card. Again, make sure it is a debit card and not just an ATM card for your home bank.
ADVANCES/CHECK CASHING
With the use of credit cards and computers, it is now 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 credit limit. When requesting an advance, remember that banks always require proper identification. A high interest 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 using 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. bank account for its clients at no charge.
WIRE TRANSFERS/DRAFTS
If you think you might need to use bank drafts or have your initial funds sent to you in the form of a bank draft, visit your home bank before you leave and ask them for a list of correspondent banks in your host city. Be sure to let them know who is authorized to initiate cable transfers for you. Once abroad, you can contact your home bank by telegram or phone and receive the money, usually within 48 hours. They may want you to have opened up an account at the host bank before the money can be transferred. Be advised that you will probably have to pay the cabling charges both ways, in addition to a commission charged by the host bank. Money can also be cabled from home by American Express; this type of transfer will take two to five days and the charges vary according to how much money is sent. Alternatively, you can notify your home bank and request that a bank draft in your name be mailed to you via registered mail.
OPENING A BANK ACCOUNT
Once you arrive at your new institution, you may want to open a bank account at a local bank. There are many types of banks abroad, and your site coordinator may give you advice about banking during your orientation. Most banks will provide checking and savings accounts for customers, in addition to offering other financial services.
POWER OF ATTORNEY
It is highly advisable to designate an individual, usually a parent, to take care of legal or financial matters of your behalf while you are abroad. Find out what the proper procedure is and make those arrangements before you depart.
TAXES
You may need to arrange to have tax forms sent to you (they are usually available at the U.S. consulate or embassy), or have taxes paid for you while you are out of the country. Be sure you know what your tax responsibilities are and how to comply while you are away.