Studying Abroad: Navigating Your Financial World When Studying Overseas

There’s something special about experiencing education in another country. In fact, about 11% of Canadian undergrads choose to study abroad at some point during their academic career.

If you’re planning to study abroad, there’s a lot to consider beyond just the food and language differences; from currency exchange to different banking systems, here are 5 key questions to ask yourself about before you go.

1. Where should I study?

If you are in the early stages of planning your international study, you have the whole world before you. You can choose to gain your qualification from an overseas school or attend a Canadian school that offers a semester or more abroad or a student exchanges.

If you’re looking to obtain your degree abroad, here are some things to think about:

• Cost: Some countries may offer more affordable tuition than others, particularly for graduate degrees.

• Citizenship or residency: If you hold citizenship in another country, check to see if you may be eligible for subsidized tuition there. Some countries off low- or no-cost education for their residents or citizens.

• Student loan eligibility: If you plan to use student loans to pay for your tuition, check that the school you plan to attend is eligible — and how much you may receive — if you’re not in a Canadian program.

2. What’s my budget?

Before you head off on your study abroad adventure, it’s important to sit down and figure out your budget. This means planning for basics (without forgetting to add in some extra cash for experiences!). Here are some items to include:

• Tuition

• Rent and utilities

• Food

• Clothes

• Entertainment

• Transportation

• Mobile phone

Here’s another important one: make sure you get comprehensive medical insurance. Your Canadian health insurance won’t cover you if you get sick while overseas and it can be costly to be ill abroad.

Prices of everyday items and activities can vary widely from what you’re used to in Canada. While over time you’ll learn to do the math quite quickly, don’t forget to track your expenses in both Canadian dollars and the local currency.

3. How will the exchange rate affect me?

You probably already know that one Canadian dollar doesn’t always equal the same amount in other currencies. This exchange rate changes all the time, depending on global factors, which can make budgeting a bit tricky.

Here are a few ways to cushion the impact of currency changes:

• Keep currency exchanges to a minimum — the more you exchange money back and forth, the more fees can add up. You can also get a more favourable rate if you exchange a higher sum in one go.

• Pay upfront for as many things as you can to avoid having your spending affected by constant exchange rate fees.

• Pad your budget with an extra 10 per cent to account for fluctuations.

4. What are my banking options?

It might seem easiest to just keep using your Canadian bank account while abroad. But if you’re staying for a longer period, those foreign ATM withdrawal fees and exchange fees can add up fast.

When deciding on how you’ll bank, here are a few things to consider:

• Banking partnerships: Many Canadian banks have partnerships with banks in other countries. It’s worth checking with your bank to see if they have any partnerships in your destination country.

• International student accounts: Some banks (both in Canada and in other countries) offer special accounts for students studying abroad, which can help with foreign transactions.

• Documents needed: You’re usually required to bring documents to open a local bank account. It’s a good idea to find out what you’ll need before you leave Canada.

• Credit cards: Consider a Canadian credit card that doesn’t charge foreign transaction fees (which can be upwards of 3 per cent per transaction on other cards!). You can also get a local student credit card, especially if you’ve opened a local bank account and have money in the local currency.

Chat with your bank (both here and abroad) about which banking options are best for overseas students.  

5. Can I work while I study?

Paying for school and living abroad can get expensive. Many students choose to work part-time to help cover some of the costs.

Here are some important things to know about working abroad:

• Check your student visa: It may only allow you to work up to a certain number of hours per week.

• Consider opening a local bank account: You’ll need a place to deposit your paychecks — and opening a local account helps you avoid long delays or extra fees when depositing foreign cheques into a Canadian account and some employers will be unable to deposit wages into an foreign bank account.

Studying abroad is an amazing opportunity, and while it can get pretty pricey, with a little preparation and planning, you can make limit financial stress, leaving you more time to focus on your studies and enjoy your time abroad.