Money points to remember before flying to study abroad

Statistics from the Ministry of Foreign Affairs reveal that over 11 million Indian students are studying abroad as of July 2021. Alarming data shows the percentage of Indian students who dream of going abroad to pursue their higher education . However, no matter how life changing it can be, studying in foreign soil can be financially draining.

Each year, on average, around 8 lakhs of Indians go abroad to pursue higher education, but only a handful of them get their hands on the limited number of scholarships. Others opt for student loans to meet their aspirations.

Factors such as exchange rate differences, loan repayments, daily expenses (not covered by scholarships), to name a few, often tend to cause the budget to skyrocket. These roadblocks are often an annoyance for students who wish to fly abroad.

And to avoid unnecessary hiccups, let’s take a look at some money points every student should remember before flying abroad:

Know the exchange rate gap

There are several factors adding to the increase in spending, and one of them is the exchange rate. Even a slight change in exchange rates can make a big difference in your budget. However, there are ways to save a lot of money if you play your cards right. For example, banks charge a spread between the buying price and the selling price of the foreign currency. Banks and financial institutions tend to sell the currency at higher numbers than the existing one. The highest spreads are usually taken at airports, however, neobanks and FinTech platforms offer much lower exchange rates.

Keep an eye on exchange rates

It is essential to keep a close eye on fluctuating exchange rates to save money on future exchanges. If you are watched closely, you can use the same to your advantage. Dynamic rates vary among different banks, financial institutions and exchange bureaus. You can lock in the best exchange rate when the numbers are relatively low so you don’t have to worry about fluctuations. While it might not seem like a lot of savings at first, you will gradually find that you are actually saving a lot. Nowadays, apps and websites provide rate notification alerts on declining value, which can help you make an informed decision. In fact, avoid buying the currency when the rates are high, and buy more when they are considerably lower.

Compare rates

Always check and compare rates and charges before making a payment or exchange. You need to calculate the total cost of the transaction and analyze the allocation. Exchange rates vary from company to company and can sometimes be as high as 6%, depending on currency and location. Use online forex marketplaces to compare the margins of different vendors and banks. Since each vendor offers the best rate to win business, you can take advantage of the competition to get the best deal.

The key is to understand the overall cost and not just to look at the exchange rate. There are lots of hidden charges out there, and understanding what you’re paying will help you make a better decision. For example, even if the provider offers a lower rate than others, there may still be some blocked costs such as service fees, overseas transaction fees, etc. So watch out for them. Although it may seem obvious, chances are it will jump to your mind and as a result you can lose a lot of money.

Save on medical bills with insurance

Another unaffordable expense in foreign countries is health. Unlike India, seeking health care services abroad is not easy and costs much more than expected. Hence, you need to plan it wisely. Medical costs can offset a huge financial liability; therefore, purchasing a student health insurance plan is a great idea. You can purchase insurance from an Indian company or a foreign insurer linked to the university, but be sure to do your research thoroughly before purchasing one. An ideal insurance plan should cover medical emergencies such as dental treatment, accidents, evacuation and repatriation, civil liability, school fees, travel, and sponsor protection. While it is advisable to go with a domestic provider if you are on a tight budget because the premium charged by Indian companies is lower, going with an over-the-top foreign insurer will give you more comprehensive health coverage.

Besides health, travel insurance is also a must. Always make sure that your travel insurance covers accidents, medical emergencies, loss of luggage, passport and important documents.

Open a local bank account

Opening a local bank account is one of the most efficient and secure ways to manage your money. If your course duration is more than a year, these bank accounts not only help you save on frequent conversion fees, but also get your paychecks for part-time jobs fast.

Several universities have links with banks, so it will be easier for you to open an account. Some of the documents needed include your passport with a student visa, a letter from the university confirming your admission and your course details, your university proof of identity and proof of local address, to name a few. some.

In a nutshell, managing finances in a foreign country can be difficult and overwhelming due to changing exchange rates. But with the right understanding and in-depth information, you can make smart decisions. In fact, you might as well end up saving some if you carefully follow the tips mentioned above!

Mayank Goyal is
CEO and founder of moneyHOP

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