Budgeting for Study Abroad: What You'll Need, and How to Access Your Money


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: United World College: Study Abroad for Way Less Than You Think)

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.

Costs of Studying Abroad

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).


First and foremost: how will you get there? Transportation includes international flights ($500–$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 Student Universe 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.


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.

Classes, Books, and Fees

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: Saving Money on College Textbooks)

Food and Drink

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).


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 HTH Worldwide.

Sightseeing and Miscellaneous Travel

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: Why You Should Never Buy Souvenirs)

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.

Currency Exchanges

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.

Exchanging at Your Local Bank

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.

AAA Currency Exchange

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.

Travelex, Airports

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.


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.

Prepare for Your Trip in Advance

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.

Is Your ATM Card Accepted Overseas?

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.

Global ATM Alliance

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 Global ATM Alliance. This will save you some money on ATM withdrawals, though you'll probably still pay a currency conversion fee.

Student Credit Cards

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% "foreign transaction fee" on every purchase. There are however, credit cards specifically created for students that will minimize fees on purchases you make during your study abroad, including ones with no foreign transaction fees.

Visa, MasterCard, American Express, Discover

Many international merchants accept MasterCard and American Express, but if you want the most widely-accepted card, then bring a Visa. (See also: Travel and Money: Using Your Credit Card on the Road)

Do You Need a Smart Card?

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 "chip-and-pin" credit cards (also known as "smart cards"). 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).

Final Word

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.

What about you? Any tips or study abroad stories you'd like to share? Let us know in the comment section below!

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