You’ve finally arrived in the study abroad destination you’ve been planning for months. The last thing on your mind is finance and budgeting. You’ll make it up as you go along, how hard is it to use a currency exchange calculator anyway…right? I promise, it’s tougher than you think.
Luckily, preparing yourself for financial challenges you may encounter along the way will prevent huge, catastrophic problems from occurring at the most inconvenient time. As in, the first day of your Fall break when you realize you solely have Euros and you’re staying in London for three days. Fail. Here are a few tips that will best prepare you for the financial aspect of studying abroad.
1. Know the value of the local currency and budget accordingly!
Let’s say you want to budget $500 for your trip to Italy. With the current exchange rate providing .73 Euros for 1 US Dollar, the $500 only gives you €367. That could be the difference in your accommodation for multiple nights! On the other hand, you might find a roundtrip flight from Florence to Barcelona for only €180 and think it’s a great deal. When really, that is almost $250! It’s a good idea to do an exchange rate calculation before you enter a flight, hostel, tour, etc. into your budget.
2. Keep track of spending in a way that best suits your habits!
So, keeping track of everything you buy might become a little depressing. But let’s be honest – you wouldn’t want to bet your last dollar or euro on your mental math abilities. If you’re an old-fashioned pen and paper guy/girl, write down what you purchase and how much it costs! If you’re mobile all the way, use the notes app on your phone or a money tracking app (Travel Pocket, Trail Wallet, Mint, DailyCost). You can use this as a budgeting technique as well. Seeing how much you spend on your paper or screen makes it seem a lot more real. Having a record of your spending can also be useful if you spot friends money during your travels. You can point directly to the item or activity and how much it cost to avoid any discrepancies.
3. Be prepared for the possibility of fraud and theft!
Part of taking care of your finances is making sure you have the tools to prevent fraud and theft. Although major credit cards provide 0% fraud liability for credit card transactions, this offer only applies to true credit transactions. You should check your debit card balance routinely and communicate with your credit card issuer every time you visit a new country. Another preventative measure is getting a travel credit card with a chip for security. Chip technology makes theft more difficult because it eliminates some of the ways data is stolen and the way magnetic strips are replicated. Credit card issuers may freeze or cancel your card if they suspect fraudulent activity. You don’t want to receive a new credit card back in the U.S. in the middle of your trip to Italy. You will then be the one borrowing money from your friends – talk about embarrassing.
You can’t prevent getting your credit card stolen or the exchange rate spiking, but why not be financially prepared for the things you can prevent? You don’t want to forget that euros aren’t dollars and end up calling home for extra cash. So take a few tips to make sure that you get the best abroad experience with the least financial hassle!