foreign currency en-US Budgeting for Study Abroad: What You'll Need, and How to Access Your Money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/budgeting-for-study-abroad-what-youll-need-and-how-to-access-your-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="woman with globe" title="woman with globe" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>In today's globalized society, study abroad is becoming an increasingly popular option for high school and college students who want to broaden their horizons during their academic careers. If you or your child is considering a study abroad experience, cost will likely be one of the biggest factors in your decision. (See also: <a href="">United World College: Study Abroad for Way Less Than You Think</a>)</p> <p>To help you decide whether study abroad is right for your financial situation, the following is an overview of the costs of studying abroad, as well as some helpful tips for managing your money overseas.</p> <h2>Costs of Studying Abroad</h2> <p>Before getting started, it's important to note that expenses vary from place to place, depending on the cost of living, currency exchange rate with the dollar, and other factors. The sections below will help you map out an initial budget, but more in-depth research will be needed to determine the actual costs of study abroad (again, it depends where you want to study).</p> <p><strong>Transportation</strong></p> <p>First and foremost: how will you get there? Transportation includes international flights ($500&ndash;$2,400, depending on where/when you fly), cab or bus fare between the airport and your place of study, and everyday public transportation costs. Websites such as <a href="">Student Universe</a> offer student discounts on airfare, and many popular study abroad destinations offer student discounts on public transit. However, be sure not to underestimate your transportation expenses, because you might need more money to make side trips during time off from your studies.</p> <p><strong>Housing</strong></p> <p>Study abroad programs tend to have several housing options for students, such as dormitories, long-term hostel stays, a host family, off-campus apartments, and others. This can either be included in your study abroad tuition or an added expense, depending on your university's policies. Housing is generally more expensive in large cities and western European countries (where the dollar is weaker than the Euro), but otherwise expect to pay the same amount (or even less) than you currently pay for housing at your home university.</p> <p><strong>Classes, Books, and Fees</strong></p> <p>To find the tuition your university charges for overseas studying, check the study abroad resource center on your university's website. Some universities charge approximately the same tuition in the U.S. as they do for their abroad programs, while others may have more fees tacked on. Tuition and fees likely will not include the cost of books, so be sure to take those into account as well. (See also: <a href="">Saving Money on College Textbooks</a>)</p> <p><strong>Food and Drink</strong></p> <p>Check foreign currency exchange rates during your researching phase. Currencies that are worth more than the American dollar (such as the British Pound or Euro) will lessen your purchasing power and make things such as food and drinks seem more expensive. If you go the university housing route, you will probably have a meal plan, but create a separate food and drink budget section anyway (for snacks and eating off campus).</p> <p><strong>Insurance</strong></p> <p>Health insurance is also a biggie for students traveling overseas. Some companies may not extend your health insurance coverage beyond the United States, so this leaves you with a couple options: either pay the student health insurance fee or (if the fee isn't mandatory), find your own global health insurance plan from companies that cater to students going overseas, such as <a href="">HTH Worldwide</a>.</p> <p><strong>Sightseeing and Miscellaneous Travel</strong></p> <p>It's often said that studying abroad is a once in a lifetime experience that you will remember for the rest of your life. Although you probably want to be frugal while having fun, the best way to make your study abroad as memorable as possible is to get off campus and do some sightseeing when you're not too busy studying. Although buying souvenirs is a waste of money, it's OK to splurge on some touristy outings and travel to different cities and countries while you're in the area. Just be sure to take these expenses into account so you're not scrambling for funds toward the end of your overseas stay. (See also: <a href="">Why You Should Never Buy Souvenirs</a>)</p> <p>Now that we've examined the basic costs of studying abroad, let's examine some money management tips that will save you time and headache while you're in another country.</p> <h2>Currency Exchanges</h2> <p>Once you've outlined a budget, your next big step is acquiring the local currency in order to pay for your upcoming expenditures. There are three main avenues to exchange currency.</p> <p><strong>Exchanging at Your Local Bank</strong></p> <p>Although currency calculators give you a set ratio of X foreign currency to X American dollars, you'll receive a slightly smaller amount from a bank after the conversion fees are tacked onto your currency order. Most banks also require 1-2 weeks minimum for the currency to be sent to your home or to the bank for pick-up.</p> <p><strong>AAA Currency Exchange</strong></p> <p>If you're a AAA member, you can visit or contact your local AAA branch for foreign currency exchange. All branches have a supply of Euros and British Pound Sterling on hand and you can order other currencies over the phone. While this is certainly convenient, note that AAA isn't known for offering the best rates, and they charge a service fee for each exchange.</p> <p><strong>Travelex, Airports</strong></p> <p>Currency exchange businesses such as Travelex and airport currency exchanges tend to have the highest fees or least favorable rates in comparison to the alternatives. Unless you're pressed for foreign cash and have nowhere else to exchange, go to your local bank or get your funds from a foreign ATM instead.</p> <h2>ATMs</h2> <p>If you want to bring a limited amount of cash from home and take out more currency while you're overseas, you'll need to bring your ATM card, and take the following tips into consideration.</p> <p><strong>Prepare for Your Trip in Advance</strong></p> <p>Let your bank know your travel plans before you leave the country. If you don't, a rejected card may not be the fault of the merchant's, but rather your bank blocking the purchase on the suspicion of fraud.</p> <p><strong>Is Your ATM Card Accepted Overseas?</strong></p> <p>Yes, you can use your ATM card in Europe, Asia, South America, and most other ATMs around the world. There may be some fees involved, however, such as a currency conversion fee and/or ATM withdrawal fee. Since ATMs in big cities or popular shopping areas tend to have higher fees, go to a local ATM to withdraw cash instead.</p> <p><strong>Global ATM Alliance</strong></p> <p>If you have an ATM card with Bank of America, you can avoid hefty international ATM fees by withdrawing funds from a bank that is part of the <a href="">Global ATM Alliance</a>. This will save you some money on ATM withdrawals, though you'll probably still pay a currency conversion fee.</p> <p><strong>Student Credit Cards </strong></p> <p>In addition to cash and ATM exchanges, there is a third option for making international purchases: credit cards. Proceed with caution, since many credit cards charge a 2-3% &quot;foreign transaction fee&quot; on every purchase. There are however, <a href="">credit cards specifically created for students</a> that will minimize fees on purchases you make during your study abroad:</p> <p><strong>Visa, MasterCard, American Express, Discover</strong></p> <p>Many international merchants accept MasterCard and American Express, but if you want the most widely-accepted card, then bring a Visa. (See also: <a href="">Travel and Money: Using Your Credit Card on the Road</a>)</p> <p><strong>Do You Need a Smart Card?</strong></p> <p>When traveling overseas, you may find that some merchants don't accept magnetic strip credit cards. Instead, most countries in Europe, Asia, and South America prefer &quot;chip-and-pin&quot; credit cards (also known as &quot;smart cards&quot;). A few American banks offer these types of credit cards for international travelers, but if you don't want to go through the hassle of getting a brand new card just for overseas use, bring an ample supply of cash and an ATM card (for instances when your usual credit card isn't accepted).</p> <p><strong>Get a Card With No Foreign Transaction Fees</strong></p> <p>The <a href="">Discover it for Students and Capital One Journey Student Rewards credit cards</a> are fantastic for students going abroad. Not only do these cards have zero foreign transaction fees (which range from 1-3% per transaction on most other credit cards), but they also have $0 annual fees and generous cash back rewards programs for cardholders. (See also: <a href="">The Top&nbsp;Travel Credit Cards</a>)</p> <h2>Final Word</h2> <p>Studying abroad can be an immensely rewarding experience that not only broadens your academic horizons, but also introduces you to people from around the world and allows you to live in another culture for a brief period of time. Proper budgeting and overseas money management are essential, but try not to get too caught up in the financial aspect and enjoy your overseas trip as much as you can before heading back to the daily grind at your university at home.</p> <p><em>What about you? Any tips or study abroad stories you'd like to share? Let us know in the comment section below!</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//;;description=Budgeting%20for%20Study%20Abroad%3A%20What%20You%20will%20Need%2C%20and%20How%20to%20Access%20Your%20Money" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//"></script></p> <p style="text-align: center;"><img src="" alt="Budgeting for Study Abroad: What You'll Need, and How to Access Your Money" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Kelly Kehoe</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">7 Ways Students Can Travel Abroad for Less</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">3 Reasons to Get Your Master’s Degree Abroad</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">The Best Travel Reward Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">How to Make Good Money Teaching English in China</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">The Best Sign-up Bonuses for Airline Miles Credit Cards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Education & Training Travel college tuition and fees currency exchange foreign currency study abroad travel costs Wed, 11 Sep 2013 14:07:04 +0000 Kelly Kehoe 981093 at What if foreigners quit lending the US so much money? <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-if-foreigners-quit-lending-the-us-so-much-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="Foreign currency and coin" title="Foreign Currency and Coin" class="imagecache imagecache-250w" width="250" height="165" /></a> </div> </div> </div> <p>One of the bugaboos of the financial doom-and-gloom crowd is the worry that foreigners (China in particular, but also oil exporting countries in the Middle-East, and others) might quit buying so many US Treasury securities.  If that happened, they say, the value of the dollar would plummet, interest rates would soar, and the US economy would be in terrible trouble.  I say:  Bring it on!</p> <p>I&#39;m not the only person who isn&#39;t worried about this.  Quite a few people take some comfort in the idea that dumping Treasury paper would hurt the major foreign holders worst of all, and that they&#39;d never shoot themselves in the foot that way.  The doomsters retort that, given the inflation rate, the exchange rate, and the prospects for the US economy, it may well amount to the same thing either way, but that by selling, foreign holders of US paper could at least get something.</p> <p>My own take is that the whole analysis is wrong.</p> <h2>What would happen?</h2> <p>Remember that the US isn&#39;t a bank--the government sells bonds, it doesn&#39;t take deposits.  Foreign holders of dollars can&#39;t show up and demand their money back.  All they can do is sell the securities they&#39;ve got.  (And, of course, quit buying more.)</p> <h3>Interest rates</h3> <p>Obviously, if major holders started unloading their treasury paper, the prices would plummet and interest rates would soar.  That would make it expensive for the US to borrow new money, but it wouldn&#39;t affect the government&#39;s cost for the money they&#39;ve already borrowered.  In any case, borrowing large amounts of money is just a policy decision by the Bush administration and the Congress.  As recently as 2000 the US government was running a surplus.  With the economy slipping into a recession, it would be harder to run a surplus now, but the current large deficit is entirely optional.</p> <p>Besides making it expensive for the government to borrow large amounts of money, higher interest rates would make it more difficult for everyone else to borrow money as well.  On the other hand, it would make it quite profitable for people to save and invest money.  In fact, once the government got its fiscal house in order (something that wouldn&#39;t really be optional in this scenario), we&#39;d see the exact reverse of what the doomsayers predict--treasury paper would become a highly prized asset.  People who bought it cheap when foreign governments dumped it would make huge profits.</p> <h3>Exchange rates</h3> <p>You&#39;d see similar results in the foreign exchange market.  The value of the dollar would drop, making imports more expensive, but making exports more competitive.  </p> <p>The US (because it is large and well-endowed with both natural resources and skilled workers) could actually produce most of what it needs domestically.  The only reason it doesn&#39;t do so is that imports from low-wage countries are so much cheaper.  </p> <p>Of course, producing more of what we use would cost more--the consumer has had it great over the past 30-odd years of globalization, getting all sorts of cheap stuff that would cost a lot more if it weren&#39;t imported from low-wage countries.</p> <p>The result would be lower standards of living, but it wouldn&#39;t be a catastrophe.  And, there would be winners as well as losers.  Manufacturers would come out ahead, as would farmers and workers.</p> <p>As the US dollar falls, the price of everything that trades in global markets (for example, corn, wheat, and soybeans) rises.  (We see that already.)  Since we grow a lot of those commodities, we benefit in about equal measure to our losses--the raw materials cost more, which means the stuff we buy costs more, but the producers earn more, so they have more money to spend.  </p> <p>One major exception, of course, is oil, where we use far more than we produce.  The price of oil would obviously soar in this scenario, hurting everybody.  But that&#39;s going to happen anyway.</p> <h2>Positioning yourself</h2> <p>I don&#39;t think this is a likely scenario, simply because (as I described at the beginning), dumping treasury paper would hurt the foreign holders of it most of all.  Still, it&#39;s not an impossible scenario, so it&#39;s worth looking at how you&#39;d want to position yourself against such an eventuality.</p> <ul> <li>First, you&#39;d want to be sure not to be in debt, especially not variable-rate debt.  Interest rates would shoot up, making debt even more expensive than it is now.</li> <li>Second, you wouldn&#39;t want to be in a business that depended on cheap imports.  (At the moment that&#39;s most businesses.  Some, though, could quickly move to local sourcing of their inputs, while others would find that difficult or impossible.)</li> <li>Third, you&#39;d want to minimize your household&#39;s dependence on the sort of imports that would become much more expensive.  The hard one here is fuel.  (Your house or apartment is probably full of imported goods, but you&#39;ve already got them and won&#39;t be harmed if their price soars.)  I&#39;ve talked before about <a href="/plan-for-expensive-fuel">preparing for higher fuel prices</a>.</li> <li>Finally, expect a lower standard of living.  Americans have enjoyed a high and rising standard of living for years, through a combination of individual borrowing (especially against homes), government borrowing (which has let the government fund an expensive war while lowering taxes), and globalization (importing goods from low-wage countries).  This scenario would just mean that they&#39;d come to halt abruptly, but they&#39;re coming to a halt in any case.</li> </ul> <p>Regular Wise Bread readers will have noticed that these are generally the same recommendations that we make anyway.  That&#39;s the reason for my somewhat flippant call to &quot;bring it on!&quot;--we&#39;re already ready.</p> <p>A quick transition to a world where everyone had to live within their means would be rough--homes would be lost, jobs would be lost, businesses would be lost.  But we&#39;re heading there anyway, so it&#39;s just a matter of whether the transition will be fast or slow.  As individuals, we have the opportunity of starting the transition now--ahead of everyone else.</p> <p>I suggest you make the most of it.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Philip Brewer</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">Self-sufficiency, self-reliance, and freedom</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">Wage slave, debt slave</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">Tips for Increasing Your Financial Literacy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">Another path to recovery: higher incomes</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">Join America Saves Week February 24 to March 2nd</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living Debt Management debt foreign foreign currency treasury securities Tue, 08 Apr 2008 20:43:41 +0000 Philip Brewer 1991 at The sinking dollar <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-sinking-dollar" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="Foreign coins and currency" title="Foreign Coins and Currency" class="imagecache imagecache-250w" width="250" height="165" /></a> </div> </div> </div> <p>It takes more than $1.40 to buy one euro today. It cost less than $1 as recently as late 2002. A Canadian dollar is worth just about exactly a US dollar--a parity not seen since the 1970s. Should Wise Bread readers care? If so, what should they do?</p> <h2>Higher prices for imported goods</h2> <p>The most obvious reason for US readers to care would be if a lower dollar led to higher prices for imported goods. When exchange rates make the dollar worth less, it seems obvious that it would take more dollars to buy all the stuff imported for sale in the US. The fact is, though, prices are generally set at what the market will bear already and those prices don&#39;t change very quickly in response to changes in the value of the dollar.</p> <p>The most immediate effect of of lower dollar is higher costs for importers--higher costs that they largely can&#39;t pass on to consumers. The result of that is a profit squeeze on the importers. Faced with such a squeeze, they do their best to push back at both ends--trying to get lower prices from their suppliers and trying to push higher prices onto their customers. It&#39;s hard to know to what extent they&#39;re being successful--companies keep that sort of data secret--but there&#39;s been no sign of a spike in prices for ordinary imported consumer goods.</p> <h2>Higher prices for raw materials</h2> <p>The price of oil, quoted in dollars, has risen for most of the year. Looked at in euro terms, though, the change is less stark. A $60 barrel of oil at the end of last year would have cost €46 versus €57 for an $80 barrel today--a 22% change in euro terms versus a 33% change in dollar terms. The price of oil really is up, but not as much as the price in dollars might suggest.</p> <p>Oil isn&#39;t the only raw material, of course. Prices of most basic materials--iron, gravel, lumber and so on--are all up in dollar terms. Like with oil, this is partially a real increase in prices, and partially just an effect of the falling dollar.</p> <p>(Given the high oil prices, the price of gasoline has been surprisingly low, at least in the US. Enjoy it while it lasts.)</p> <h2>Expensive travel</h2> <p>If you&#39;re an American traveling overseas, you will definitely notice the difference--everything will cost more. Without the buffering effects of importers and retailers who are willing to sacrifice some of their profits in the interests of maintaining market share or customer relations, you&#39;re stuck paying the local price.</p> <h2>People whose income and savings aren&#39;t in dollars</h2> <p>A good number of Wise Bread readers live in countries other than the USA. Of course, where you live doesn&#39;t matter so much as where you earn your money and how it&#39;s invested.</p> <p>To the extent that your wealth and income are in something other than dollars, the decline in the dollar provides some initial benefits--commodities priced in dollars are cheaper, as are goods and services from US sources.</p> <p>Longer-term, though, the benefits are less clear. Those foreign manufacturers benefiting because many commodities are priced in dollars, are in many cases the same ones taking a profit hit to keep selling to US importers. For those products where the US is still an exporter, the US firms have a growing exchange rate advantage--they can cut their price to foreign buyers and still bring home just as many dollars as before. If you&#39;re an owner or an employee of a firm with a US competitor, the lower dollar may hurt as much as it helps.</p> <h2>Longer term</h2> <p>Last week&#39;s <a href="">Economist</a> makes the point that, &quot;It is how steadily the dollar is falling that counts, not how swiftly.&quot; However much importers and retailers try to buffer the changes from the falling dollar, over the longer term the exchange rate matters, and there are plenty of doomsday scenarios that play out if people in other countries decide that they&#39;d just as soon not hold dollars anymore. Even a small shift in the preferences of the people and institutions that have been lending money to US borrowers could push the dollar down very quickly.</p> <p>The only way to retain those investments, if people start to move money out of the dollar, would be to raise interest rates sharply. But with the US economy already suffering from the <a href="/how-the-subprime-lending-boom-hurt-everybody">subprime lending crisis</a> and the resulting <a href="/credit-squeeze-formerly-know-as-a-panic">financial squeeze</a>, the flexibility for the Fed to do that is minimal--indeed, the Fed just lowered interest rates last week.</p> <h2>What to do?</h2> <p>Since we don&#39;t know which way exchange rates will move in the future, it&#39;s hard to provide any slam-dunk suggestions. Having some international <em>diversity in your investments</em> is always wise, but moving out of the dollar just as it hits record lows is not necessarily the best strategy. (You&#39;re too likely to find yourself unprofitably buying high and selling low.)</p> <p>If it were easy, probably the best thing to do would be to arrange to have some international <em>diversity of income</em>. It would be very nice if everyone had 15% to 20% of their income in foreign currencies so that it would grow when the local currency fell and vice versa--adding a stabilizing influence to household income. Sadly, that&#39;s not really practical for most people. Working for a multinational corporation provides a tiny sliver of the same benefits, but most of the upside will probably go to investors rather than employees.</p> <p>Still, as long as you have your income in the local currency, you can at least take advantage of the buffering effects mentioned earlier. The worst situation is to be living in a country with a rising currency while earning your income from a country with a falling one. (The situation of Americans living abroad just now.)</p> <p>For most Wise Bread readers, there&#39;s probably no benefit to taking any sudden or major actions just now. Maintain or gradually work toward an <strong>internationally diversified investment portfolio</strong>. Consider trying to develop some <strong>foreign-source income</strong>. Over the medium-term, arrange to <strong>live in the same country that the majority of your income comes from</strong>. If you can do at least a couple of those things, you&#39;ll be fine.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Philip Brewer</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">The sinking dollar, as viewed from overseas</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">8 World Currencies That Took a Hit in 2016</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">14 Dirty Details of Traveling Full-Time</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">5 Travel Destinations That Are Cheaper Due to a Strong U.S. Dollar</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">Don&#039;t Get Taken: How to Evaluate an Exchange Rate</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance dollar exchange rates foreign currency international investing international travel overseas investing overseas living Mon, 24 Sep 2007 22:23:45 +0000 Philip Brewer 1202 at