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Managing Your Money
How much money do I bring?
Ways to Carry Cash
Opening a Bank Account
Power of Attorney
Taxes
Managing your finances is one of the most important and challenging aspects of a successful and enjoyable academic experience abroad. Dealing with a new currency and changes in your cost of living are 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.
Currency Converter
If you want to check the current value of your host country's currency against the U.S. dollar you can find exchange rates in any major paper or you can go to the Oanda Currency Converter for daily rates.
How do I pay for Study Abroad?
You will be responsible for paying for your study abroad, either to MSU or to another sponsoring organization, such as another university or educational association. If you are on some type of payment schedule, you will need to adhere to it explicitly. Failure to do so could result in the assessment of late fees or worse: your automatic withdrawal from the program. If you are participating in an exchange program you must meet with the Study Abroad/Exchange Advisor at least once regarding payments for the program. If you are participating in a Montana State University-sponsored program, you must make sure the Business Office knows your permanent address (or your parent’s address), so bills can be sent there while you're gone.
Money Amounts
How much money do you need for your time abroad? It is a good question and one that is very difficult to answer. Invariably, you will spend as much money as you take with you. Your program fee probably includes your tuition, housing and basic food needs. Still, you will need to bring enough 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. How you spend your money is up to you but it is recommended that you take a close look at your expenses and prepare a budget for yourself based on the estimated expenses on the Study Abroad Budget Form. In general, "living as the locals do" is usually the cheapest way to go. Use the following list to help you think about all the possible expenses you may have.
- Tuition
- Fees
- Rent
- Meals ("board")
- Transportation
- Books
- Communications
- Clothes
- Personal expenses
- Recreation and Travel
Ways to Carry Cash
If you are bringing cash with you avoid bringing 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 may be wise to have some cash currency before you enter your host country, but you can change a small amount of money right at the airport or withdraw money at an ATM. Remember that carrying cash is always risky! You will be better served with an ATM or credit card.
Traveler's checks
Traveler's checks are a convenient and safe way to carry money. In addition to being easy to cash (make sure you have ID!) 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 their full value, as long as you have a record of the serial numbers. Keep the receipt of the check numbers separate from your checks. Traveler's checks can be purchased at just about any bank in the United States, usually at the rate of one percent over the value of the checks that you are buying. The American Express service is quite complete, and they also have offices in major cities around the world. If you are a member of AAA, you can get traveler's checks for free. Traveler's checks in dollars can be exchanged at banks and money-changing houses overseas but remember to bring your passport as identification. Sometimes there is a charge per transaction (rather than per amount).
Credit Cards
Credit cards are valuable for big purchases, emergencies and also cash advances, although your credit card company will often charge a higher interest rate 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, 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 U.S. dollars on your statement and sometimes you will see the foreign exchange conversion listed as well. However, the interest charged on an outstanding balance adds up quickly and it is very easy to get into debt. You also 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. Be aware that in some countries credit cards are not as readily accepted as they are in the U.S.
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 United States in the currency of your host country. If you decide to get one, be certain to ask your bank for a card that has the Visa or MasterCard symbol on it. You can use it in any cash machine abroad that has a Visa or MasterCard logo on it, and it will not be like cash advancing. Instead, when you use this debit card, it will give you a menu choice of different languages and will ask you how much money you want in the currency of the country in which you are traveling. You only need to take out what you want. The transaction will debit the money from your checking account in the United States at that day's exchange rate, and, in most cases, no commission will be charged. Check with your bank for transaction fees. Most debit cards can also be used to make purchases abroad like a credit card. Again, make sure that the debit card is not just an ATM card.
Advances/Check Cashing
With the use of credit cards and computers, it is 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 online payday loans and you can get an advance only up to your line of credit. 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 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. account at no charge.
Wire Transfers/Drafts
If you think you might need to use bank transfers or have your initial funds sent to you in the form of a bank draft, visit your bank before you leave and ask them for a list of the correspondent banks in your host city. 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. 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 through American Express; this type of transfer will take two to five days and the charge varies according to how much money is sent. Alternatively, you can notify your home bank and request that a bank draft in your name is mailed to you, via registered mail.
Opening a Bank Account
In some countries, upon arrival at your new institution, you may want to open a bank account at a local bank. Most banks provide checking and savings accounts for customers and some banks will allow you to keep your money in U.S. dollars. Bank hours are generally similar to those in the United States. Many banks offer other financial services and you may wish to compare the services and costs of several banks before choosing one at which to open an account. One bank may be more conveniently located than others; another may have more automated teller machines around town; a third may charge less to maintain a checking account. Also, in other countries you do not necessarily have to have an account at a bank. Other options exist and you should ask other students for information.
Power of Attorney
It is highly advisable to designate an individual, usually a parent, to take care of legal or financial matters on your behalf while you are abroad. Find out what the proper procedure is and make those arrangements before your depart.
Taxes
You may need to arrange to have tax forms sent to you or to have taxes paid for you while you are out of the country. It is possible to ask for a filing extension. Be sure to know what your tax responsibilities are and how to comply while you are away.
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