How to manage money on your year abroad

How to manage money on your year abroad How to manage money abroad by cliph

This article was written by Jason Riley, published on 11th January 2011 and has been read 29614 times.

Managing your funds, over your year abroad, can seem quite tricky. Some of you will have taken out a loan, others will have been given a grant, and others still will have chosen to go the whole hog independently... What to do with your funding? How should you go about saving/storing your money for easy access?

Option 1: Currency Cards

This is possibly the best option for managing your money abroad. You can top up money onto your card (and your parents can too) and then pay for things abroad - and withdraw money from ATMs - without charges, as if it were a local credit card. Depending on which one you choose, your salary can be paid into it, you can have a second emergency card and you can manage your funds through a smartphone app. Here's more information about currency cards.

Option 2: ATMs
Using your UK bank account can be a good option; after all, money will be deposited to it if you’re on a UK-run scheme or have taken out a loan, plus if you need the odd top-up and your parents can oblige, it’s easy to sort out. You can have a look round all banks to see which one offers the best deal for you - remember, it doesn’t necessarily have to be a student account - you can always speak to your branch manager and arrange an interest free overdraft. It might not be as generous as that of a student account, but you could still make the most of it, should needs be. It’s also a wise decision to leave one bank card at home, so it might be more beneficial for you to have two accounts. Some banks charge more than others if you use them abroad - do your research! You’ll also need to find out how much you’ll get charged, should you use your card in a restaurant or at a bar.

Option 3: Opening a foreign bank account
This might prove to be a little tricky and quite a bit of faff, if you’re just planning on going abroad for a semester. However, if you are planning on getting paid in foreign currency, or are settling in for at least 6 months, it could be a good option to open a bank account abroad. You’ll avoid transfer charges, which can be quite steep, if you are getting money from a source in euros, dollars or any other foreign currency. Another advantage to getting a foreign bank account, generally speaking, is that you won’t be charged for taking money out, or for paying with your card (though do check with your bank first). The European Commission offers a pretty good guide, as to opening a bank account within the EU. International banks, such as HSBC and Santander can give you advice about spreading your money, and your bank account, overseas. 

Option 4: Transferring money
Companies like Transferwise use peer-to-peer technology to ensure that your money never leaves the country which means that you can avoid getting stung by a hefty conversion rate. They charge a low fee of 0.5% per transfer instead. It’s quite unwise to have large cash sums stashed away, as the opportunity for theft is quite common, so managing your money in the ether makes sense.

Option 5: Travellers’ cheques
This could prove to be quite a good option for students, especially those who aren’t very good with money. You’ll be forced to budget accordingly, by dividing up equal or different sums and setting yourself a limit each week. You won’t have the hassle of having to set up a bank account, nor incur charges from your account back home, but you could end up paying certain charges, so check with each country before you buy.

You will also need some money in cash once you arrive, so make sure you’ve ordered this plenty of time ahead - there’s no point in getting to the Post Office and hearing that they don’t have any more dollars left. They also don’t charge any commission when changing money, as opposed to other bureaux de change.

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