How to manage your money while studying abroad
This article was contributed by CurrencyFair.
Choosing to go to college or university overseas can bring a host of benefits. It is an opportunity to gain independence, meet new people, and learn more about a different culture – all while pursuing a passion you love.
Even then, studying abroad can be expensive and needs a great deal of thought and preparation. This guide takes you through some of the finer details on overseas tuition and provides some financial tips for Singaporean students planning to study abroad.
Research and plan ahead
In order to spend more time making memories while studying abroad, it's important that you do your upfront research and come up with a budget. This cut downs the uncertainties that can stress you out, and reduce any potential financial pitfalls.
For one, you can start by familiarising yourself with the transport system in your new city. Knowing your route, your commuting costs, and travel time needed spares you the unnecessary stress and wasted time.
It also helps if you join expat groups and student forums before moving over because you'll get real-time, practical advice from people who are already there. Knowing everyday costs such as the price of a cup of coffee or the cost of your weekly groceries will also help you feel more confident about adjusting to the new lifestyle and environment.
You should also look out for concession cards for students, which can give you access to online and in-store discounts. Bars, night clubs, and cinemas often offer discounted prices for students who produce a valid student card. Researching on these offers can go a long way to help you budget your expenses and still have a social life while abroad.
Budget for expenses at home and abroad
By accounting for all possible expenses while studying abroad and estimating how much you'll need, you'll be able to have a rough estimate and budget for the years ahead. The Institute for Studying Abroad (IFSA) advises students to consider any unexpected costs like fixing a broken mobile phone or buying a new laptop.
Besides the overseas living costs, you'll also need to prioritise and pay for bills back at home. These includes expenses like car tax, credit card payments, or storage units rental that have to be paid on time or you might incur the penalties on late payments.
One handy way to manage home expenses is to set up recurring payments for bills. For example, you can set up a regular standing order between a CurrencyFair account and a bank account in Singapore.
With this feature, CurrencyFair customers can automate a money transfer from their multi-currency account into their Singapore bank account on the stipulated date, and be notified via email when the transfer is completed. Thereafter, the bill payment can be automatically deducted from the Singapore bank account.
Things to look out for when opening a bank account abroad
Having a local bank account while living abroad may be necessary in order to pay for rent or to set up direct debits for bills. When opening a student bank account overseas, here are some helpful tips to bear in mind.
- ATM charges – When choosing a student bank account, note the charges for ATM withdrawals if any. Some banks will charge students for this service.
- Commission-free foreign exchange – As the saying goes, if something is too good to be true, it probably is. While commission-free foreign exchange may sound tempting, banks often have hidden fees and poor exchange rates. Ask the banks for their margin on their exchange rates to understand how much these charges can be.
- Documentation – Before moving abroad, scan and store copies of all identity documents so that you can access them without having to carry them around in person. Banks may request for a proof of address such as a utility bill, photo identifications such as your passport, birth certificate or driver's license, and also offer letter or acceptance letter from the university.
Save when paying for your tuition fees
Overseas tuition fees vary depending on the country of study and the respective university. Even the country that you're from can be impact the final cost of your tuition fees. When you send money from Singapore through typical banks to a foreign university, you might be paying hidden charges and excessive fees and these charges can vary depending on where you're sending the money to.
Banks can hide a chunky margin in the foreign exchange rates that they offer customers. This margin is the difference between the bank's exchange rate and the rate on Google (the serious-sounding interbank rate) and it can differ by as much as 3% to 6%!
To avoid paying this fee, you can consider an alternative money transfer service like CurrencyFair so as to save on money transfers when paying for university fees. The margin that CurrencyFair charges to customers are as close as 0.45% from the interbank rate.
What's more, CurrencyFair is not a bank but a marketplace that brings buyers and sellers of currencies together. Customers can request a rate that they would like to exchange their currency at, and wait to get "matched" with other CurrencyFair users who might have the other currency to trade. With this service, you can save even more on money transfers and have more money while studying abroad.
If you're already planning to study abroad, it's important that you do thorough research and plan your finances because this will affect your lifestyle while overseas. More importantly, these will save you from the unnecessary stress and reduce the chances of you exceeding your budget.
This article was produced in collaboration with CurrencyFair.
From now till 17 September 2019, new customers get 3 months of Unlimited Free Transfers on CurrencyFair.
Visit CurrencyFair's website for more information on the currencies supported or to find out exactly how this marketplace works.
Note: Resident in Singapore must be aged 21 and above to open an account with CurrencyFair.