Studying in the US or anywhere abroad for that matter is often a childhood long dream for many.
Exploring new cities, countries while getting an awesome education seems like a highly desirable proposition.
Whilst planning your studies can be straightforward, managing your finances, on the other hand, is a whole different ball game.
For starters, studying in the US can be expensive and managing your finances can prove to be a bit tricky.
Add juggling multiple jobs, maintaining your grades for a scholarship, multiple subscription services like Spotify and Netflix into the mix and your situation maybe a right good mess.
In this article, we are going to touch on some money management strategies you can adopt to ensure you have a smooth ride.
A plethora of sites talk about how you need to allocate money for social events, eating out, the cinema, books, transport, etc. All these are extremely important but there are other things you need to consider when you estimate how much you might spend.
What is the average rent in the city or suburb you are planning to stay?
How much does plan B (in case utilities are costlier than anticipated, for example) set you back by?
What if your paid internship is far away?
How much does eating healthy cost? As opposed to just surviving?
How often do health insurance premiums rise?
When answering these questions, it’s always best to plan for the worst. Without compromising on your top priorities, try to see if you have enough capital in case life throws a spanner in the works. Because if it doesn’t, you can always use that capital constructively.
Thinking “I’ll learn how to cook when I get there” and not following through can be quite alright but adopting the same mindset to budgeting can prove to be costly to both you and your family.
Laying the Foundation
When traveling to the US, there are a few ways you can convert your currency. You can exchange your own currency for USD at the airport in your home country or even after arriving in the US. Another way you can bring some cash in, is in the form of travelers cheques. This is usually a very safe way to bring some cash. The other of course is through bank transfer. Wire transfers can cost you about $35 so this is another thing you need to budget for.
You can open a bank account near your university or college, or banks tend to setup stalls during orientation to assist you.
The supporting documents that might be required of you can include:
● Address Proof
● Letter of enrollment
● A student ID or other ID
You will get a debit card which is straightforward to use. However, it’s important to remember it’s extremely difficult for international students to obtain credit cards. It is good practice to not rely on credit cards to get you through a semester. Students sometimes get concessions on fees which is why going through the banks on the premises can help.
ATM Fees, Overdraft fees and transfer fees are something you can learn about and compare before making a decision. It can be useful if your bank allows you a small overdraft buffer too.
If you are thinking, “Yeah I know all this, is there something else I can do?”
Absolutely. This is also where you can get really clever especially if you don’t trust yourself to stay accountable throughout the duration of your course.
Try to set up multiple savings accounts or sub accounts so you can divide your funds accordingly. You don’t need multiple debit cards but this can be a useful way to stay disciplined. Your tuition can be placed along with essentials in one account while you can allocate another for entertainment, automated payments and the likes.
This helps you gain a clearer understanding of where your expense variation lies and you never have to compromise on your essentials.
Track your expenditure
Now that you’ve planned, setup your account or accounts it’s pretty important to track exactly where you are spending your money. This is where technology can really prove its worth. There are quite a few money tracking apps around.
You need a budget – This is one of the cool DIY budgeting apps that are easy to use. It costs $6.99. monthly.
Setapp – Setapp has a number of useful research, productivity and money management tools and more tools get added fairly regularly too. There is a special discounted education plan for students to take advantage of as well.
HelloWallet – This app allows you to not only budget but come up with a roadmap to increase your net worth as well. This tool can cost you $9 a month but the iPhone app is free.
Digit – Digit creates and manages a savings account for you which can help you save your precious earnings for future tuition or other needs. It also understands when your bills are due and then withdraws money for savings when all of that is sorted.
One common scenario is when you are out with friends and different people end up paying for different things and it can be confusing to figure out who owes what. Apps like Splitwise are pretty useful in these situations.
Little Drops Make the Mighty Ocean
This is something every student heading to the US or any other country for that matter needs to stay aware of. Money doesn’t generally get spent in large spurts but tends to trickle away.
Something that seems like its “just $7.99” can add up to become a burden. $4 a day spent on things like chips, sodas and others equates to $120 a month. In order to better understand the big picture you need to get a grasp of the little things.
Which is why you need to be tactically frugal.
Try to take full advantage of discounts and coupons when you shop for groceries. Cooking at home is always a huge money saver and the healthier option.
This can apply to when you have to buy stationary or even text books. Make full use of the library or buy used books from places like amazon or even through college Facebook groups.
Adopting many of the techniques we suggested here a month or two before you go can better prepare you for obstacles that may arise. The value of money management apps shouldn’t be underestimated as they can really make the difference between having a healthy lifestyle and living off ice cream. Most of the points mentioned here are simple habits one can adopt to shape their lifestyle even after graduating.
Eugene Kalnyk is a former exchange student and ESL teacher. Now, he’s on the team behind Setapp, the first Mac app subscription service which gives students access to hand-picked apps for every job on their Macs. He’s passionate about Productivity, Education, and petting his cat first thing in the morning. He'll be happy to meet you on Twitter.