Going abroad to study is expensive. If you want to minimise damage cause on both yours and your parents’ bank accounts, information is the name of the game.
Knowing the details and intricacies of the financial transactions you’ll make as an international student in the US-of-A can be the deciding factor as to whether you fall into the despairing black hole of financial mishaps.
Here are five major money mistakes you should avoid:
1. International transfers
As this is likely to be your main means of paying tuition fees and receiving money from your parents or sponsor, it pays to know how they work. Make sure the tuition fees are able to reach your US university in time and come with your name and details attached.
This avoids having your bursar’s office claim that your fees are in arrears and force them to track where your money has gone, which can cause you having to spend long hours getting stressed between the walls of your local bank.
Most banks will charge for international transfers, which can be substantial and grow bigger when the money passes through several banks. Avoid this by opting for person-to-person services where you’re likely to pay lower costs and get your money fast. NerdWallet has a handy list of such services ranked according to the cheapest, fastest and best online experience.
2. Credit card
While using credit cards can make it easier to manage basic expenses and finances online, many international students apply for credit cards in their home country without checking whether it charges for international transactions when the card is used outside their home country. Avoid this by choosing cards with minimal transaction fees between your home and host regions.
Some students also put off applying for an account in their home country, thinking they can apply at an American bank. This is a mistake as it’s difficult for international students to qualify for a credit card – you’ll need to prove that you’re older than 21, show proof of income and have a Social Security number. There are, however, some limited options of unsecured and secured credit cards open to people without a Social Security number.
3. Foreign exchange rates
When the Naira fell in 2016, Nigerian students at US universities found themselves struggling to pay tuition fees and visa costs. Many Nigerian students made the mistake of thinking their finances were fixed – a potentially dangerous mistake as when it comes to international students, fees aren’t usually fixed due to fluctuations in currency exchanges.
As such, students coming from countries with weaker currencies should always budget extra for such events. Not overspending and keeping track of foreign exchange rates helps, too.
4. Local prices
For Malaysians, eating out is an everyday thing as there are loads of available options at affordable rates. Dining in the US, however, is an entirely different game. Tips at a minimum of 15 percent are required at restaurants, as well as additional taxes. Even if your home currency is on par with the US, dining out often can drive up your expenses.
Instead, do as the locals do. Scout local produce and cook regularly. Bonus points if you share your home country’s famous cuisines with your new friends!
While it may be the norm to buy all your textbooks from school bookshops in Singapore, doing the same in the US may burn a hole in your pocket if you don’t know where to look. As an international student, buying all the books stated in your modules could leave you with lots of luggage to lug home when you graduate, which means more fees to fly them back.
The best thing to do is scout second-hand books from seniors and check with your lecturers if certain books are absolutely necessary for class. The internet is your ally here – there are cheaper and even free PDF versions online, while Amazon Textbooks can be your go-to for renting textbooks at a reasonable price.