The ultimate student checklist for getting money-ready for university exchange overseas
There’s a world of opportunity for university students these days, with the option to do a global exchange program being a dominant one - but it comes with large costs that can seem out of reach for many young Aussies.
Every academic year thousands of Australian university students jet-set to places like Europe, the USA, the UK and Asia to study part of their degree for a semester or an entire year.
For many it’s an opportunity to experience other cultures and grow as a young adult away from the comforts of everyday Australian life.
But before taking up an exchange program, there are a few important things for students to consider like comparing the prices of flights, finding the best travel money card to use and keeping up with international exchange rates.
Yes, living in Verona for a year does sound like the most romantic thing on earth - and who knows, Romeo or Juliet may be waiting there - but it is still essential that students plan and prepare financially as best they can so they ultimately get the most out of their experience overseas.
1. Set up a savings plan
Committing to living abroad for an extended amount of time can be daunting and the challenge of saving the money to get there is a big task for anyone, especially a student.
Universities advise that students should save AUD$10,000 or more per semester for exchange depending on where they are going and how much extra spending they foresee themselves doing.
This may seem too little or too large but every experience is different and costs will vary between countries, so $10,000 is a good base to start planning from.
A study-work balance is sometimes difficult for full-time students but setting aside a designated amount of money every week or fortnight to this account helps create a routine of saving and regular goal hitting.
Opening an appropriate student bank account can help tremendously with saving money, especially when it comes to transaction, ATM and international fees (which could prove handy later on).
Many of these accounts offer minimal interest though, so while they may be great places to have your weekly paycheck paid into, it may be worth checking out student savings accounts with higher interest rates as more rewarding savings stashes for your exchange funds before the plane leaves.
2. Explore travel money options
In some cases students are required to transfer money to their overseas institutions prior to departure to pay for things like accomodation or administrative fees.
So having a sound knowledge of international money transfer services like World First or TorFX, which may be more competitive than using a bank, could be key to ensuring you don’t pay more than you need to in order to transfer fees.
Similarly, it’s important for students to compare a range of travel money options before they go so they don’t end up paying more fees than they need to while they’re away.
One option students can use is a prepaid travel card which is loaded up with the local currency of their chosen destination. These prepaid cards work like a normal debit card and allow users to make everyday card transactions overseas and cash withdrawals from international ATMs - keep in mind that while there is usually no international transaction fee, the local ATM fee may be charged when making withdrawals.
Alternatively, travel debit cards can be used overseas however it is important to choose one that has minimal to no international transaction or withdrawal fees so that you’re not being charged extra on everyday spending.
It’s important to note that some countries and cities operate more on cash than cards so to avoid multiple ATM fees, students should make larger withdrawals at a time where possible.
RELATED: Student bank account guide
Some students own credit cards and some don’t, it’s not essential to take one on exchange, however some travel credit cards do have benefits for overseas spending.
These cards can come without international transaction fees and reward users with points if they meet certain spending criteria.
Be mindful though, never withdraw cash with a credit card as often they incur large international transactions fees as well as ATM fees.
Credit card limits can be lowered and this is particularly important for exchange students who want to avoid overspending while they are away and ultimately the debt that may wait for them upon their return home.
3. Find the best flights and insurance policy
When preparing for exchange there are many things to stay on top of before departure that can affect students’ finances whilst away.
Travel insurance is often provided by Australian universities for the period of a student’s study at their international host university. But for any travel outside the elected dates of study, students are not covered, so they must purchase their own insurance (if they want to).
Insurance policies don’t tend to be too costly though, and they can be tailored to suit the destination of the exchange program. But given a policy could save on potential medical costs, unexpected changes to travel and stolen or lost belongings, it may be worth considering.
Aside from accomodation, purchasing flights can be one of the largest costs that exchange students face as they can sometimes exceed $2,000.
That’s why it’s important to book flights as early as possible as they tend to be cheaper, but it’s also crucial that tickets are purchased from the right places for the best value.
There are companies like STA Travel and Student Flights that offer special airfare prices just for students to ensure they are able to save as much as they can on transportation costs.
Other features offered by these companies are beneficial as well, such as the OneFlex or MultiFlex pass options at STA Travel.
These passes are purchased with the flight which ultimately allow ticket holders to potentially change their flight one or three times to avoid later fees and charges.
This option can be ideal for students who aren’t certain about their return date and want the flexibility to make a change while they are away - the prices of the passes start at $50.
4. How do unis help their students to go on exchange?
Universities don’t expect that all students are able to save the required funds to participate in international exchange programs, so there are various schemes and grants in place to assist them.
The OS-Help Loan is a government funded interest-free loan that is offered to full-time Australian students participating in one or two semesters worth of study abroad and is designed to help with costs like airfares or accommodation.
Students may receive one loan per semester of study and two in their lifetime - the cost is added to their HECS-HELP debt and is paid off in the same way.As of 2019, the quantity of money that students may apply for is as follows:
- Non-Asian destinations: $2000, $4000, $6791
- Asian destinations: $2500, $5000, $8149
- Note: If students undertake a relevant Asian-language course before studying in Asia they can apply for a supplementary OS-Help Loan of $1085
It’s also worth noting that you won’t be able to apply for an OS-Help Loan if you are in your final semester of study in your degree program.
Students may also be able to apply for grants from universities both locally and abroad available to those who perform well academically or prove to be model representatives in everyday uni life.
Sydney University alone offers $4.2 million worth of travel funding schemes to aid their students to get to where they want to go.
It could be the difference between having an extra month on the beaches of Croatia or not!
Quick tips while overseas
Most students don’t have an endless supply of cash to help them while they are overseas, so here are some quick tips to saving while you’re actually abroad on your exchange.
- Compare prices between supermarkets - like at home, some overseas supermarkets are cheaper than others, so always opt for the cheaper options when buying groceries for the week. Some supermarkets will even give you instant money back on recyclable plastic bottles! After all, every cent counts right?
- Cook rather than going out - while it’s tempting to go out with new friends on exchange, it can be a costly activity. So save the lavish lunches and dinners for special occasions and learn to make some delicious meals at home.
- Save on local public transport - there are often student transport cards, so apply for one when possible, or make sure you walk or cycle instead of spending extra on a bus or a water taxi.
- Don't always fly - in places like Europe and Asia there is plenty of opportunity for international travel, but flying is not always the most economical option. Instead, check out the prices of trains and buses - yes they may take longer, but they are more scenic and might be easier on your bank balance.
- Plan extra travel in advance- transport and accomodation are generally cheaper the earlier they’re booked, so to save cash make your arrangements early where possible. Signing up with sites like Skyscanner or GoEuro could help keep you in the loop with cheap deals.
- Stay on top of spending - probably the most important thing while on exchange is to keep track of how much you spend and how often. Whether it’s updating an excel spreadsheet or consistently checking a banking app, it’s critical to stay money conscious with your weekly budgeting.
For more ways to save as a student and to get to where you want to be, head over to the Mozo student hub for a range of guides and tips.