How To Manage Money As An International Student | Best Global Universities
Having attended an American high school in Greece, Eleftheria Topaloglou says she received advice on money matters in the United States. But once she arrived in America for college, she realized she could have used more financial education.
“I had no knowledge of how to open a bank account and was very afraid of doing something wrong,” says Topaloglou, who is pursuing a bachelor’s degree in applied behavioral science and business at Brandeis University in Massachusetts.
From opening a bank account to credit and debit cards, having knowledge of how to manage money in the United States can ease the transition to college life for new international students.
“Prospective international students should understand all the standard issues first-time domestic students going to college should understand, and more,” says Karen Zuffante Pabon, international student advisor at Brandeis University.
Here are some of the basics that international students should know:
US paper money is available in denominations of $1, $5, $10, $20, $50, and $100. The currency is based on the decimal system, which means that one dollar ($1 or $1.00) equals 100 cents.
Pratik Sinai Kunkolienker, an electrical engineering graduate student at the South Dakota School of Mines and Technology from India, says he was unprepared and didn’t really use foreign currency before arriving in the United States .
“The associated jargon was also new,” says Kunkolienker. “It was a little confusing that the penny was smaller than the penny even though it had a higher value. That, coupled with the nervousness of making a transaction, was a little daunting at first.
Experts recommend that students familiarize themselves with US currency and arrive with US cash, but avoid carrying lots of cash. Currency exchange services are available at most international airports. Prospective international students should also be prepared to set a budget.
“The economic differences between their home country and the United States can also be overwhelming,” says Zuffante Pabon. “Learning to make a budget and stick to that budget may be a new concept for many.”
To avoid international transactions and foreign exchange fees, experts say students should open a US bank account after arrival. During international student orientation, many schools invite on-campus banking representatives to answer questions, provide information about offers, and help students fill out forms to begin the account opening process.
“Opening a bank account and knowing how to use it properly is important to their time here in the United States,” says Beth Riley, associate director of the international center at the South Dakota School of Mines and Technology.
When selecting a bank, she says, students should be sure to ask about bank fees, minimum balances, overdraft fees and international activities.
Students can open a checking account, which allows them to write checks and use a debit card, or deposit money into a savings account. Most banks offer online banking, which can be useful for students with wire transfers from parents or sponsors, and some banks are entirely online.
Wire transfers, also known as money transfers, allow students to electronically transfer large sums of money from one person to another, such as for housing or tuition.
Sarah Lam, assistant vice president for international affairs at California State University—Fresno says that once students choose a university, they will need to know how to transfer money to that institution for tuition and other payments. . She says different countries may have different policies regarding the amount of money that can be wired at one time.
“Students should inquire about the payment plans available at this institution to schedule payments in accordance with the policies of the university and banks in their home country. Students should also be aware of additional costs, if any, to pay online,” says Lam.
Topaloglou says from his experience that transfer fees can be very high.
“Every time my mum pays my tuition, she pays a lot of transaction fees since it’s an international transfer,” she says.
Debit and credit cards
Instead of carrying cash, Americans tend to use their debit and credit cards to pay for even small items. Contactless options like Apple Pay, which lets you pay with your iPhone or Apple Watch, are also growing in popularity.
Most banks provide a debit card, which allows students to spend money from their checking account without writing a check. You can also use your debit card to withdraw money from an ATM, although ATMs not associated with your bank may charge fees.
Many credit card applications will ask for your social security number, which most international students do not have. But according to the Social Security Administration, “although many businesses, such as banks and credit companies, may ask for your SSN, you are generally not required to provide one if you do not have one.” In some cases, a passport may suffice.
Kunkolienker recommends international students get a credit card as soon as possible, citing its convenience.
“Now I, too, use my credit card everywhere. I have hardly any cash on me,” says Kunkolienker.
Credit cards can also help students build their credit history. But there is a downside.
“If you don’t pay the minimum balance on time or at all, your credit history can take a hit as well as your wallet with a high interest rate to pay off the balance. This will affect your credit in the future” , says Riley. .
Zuffante Pabon says that while the orientation is filled with important information on financial topics, it can be overwhelming for a new international student. She advises students to do their research on money matters before coming to campus, so “once they arrive they will at least have some theoretical grounding in the situations they may face.”