Before leaving home, there are several things to consider. These include:
Foreign exchange regulations regarding the remittance of cash internationally.
Budgeting for a year or more away means having to cope with the volatility of the rand. The value of the rand can vary wildly, making setting a budget difficult. Keeping an eye on the exchange rate becomes essential. “There are mechanisms designed to help South Africans cope with these problems, so it is best to get expert advice long before boarding that plane”, says Michael.
Once the travel requirements have been met the practicalities of life in foreign climes should be considered.
It is never advisable to carry large amounts of cash. A student should carry just enough cash to get from the airport to new lodgings and to buy a few necessities.
Deciding whether to open a local account in a foreign country into which funds from home, or a local job, can be paid.
Before this step can be taken some research will have to be done on what regulations govern the opening of these accounts. Some countries prohibit foreign students working in their countries. In many countries the emphasis is on being able to prove that there are sufficient funds available for the proposed study period.
Using an offshore bank account for transactional banking.
Many people believe that an offshore account is only for people wanting to move funds from South Africa so they can invest in ‘hard currencies’ that are less volatile than the rand. In fact, offshore transactional accounts are also available. The benefit is that money is available in a foreign currency and can be used to manage finances across borders, make payments and access money. The advantages of these accounts, particularly when studying abroad could involve additional travelling, include:
Having an account that supports multiple currencies ( In Standard Bank’s case, British pounds, US and Australian dollars and the Euro)
Unlimited deposits and withdrawals
The use of a debit card that can be used to pay for goods, services and shopping
ATMs worldwide and offer customer support at all hours
Access to savings accounts and foreign exchange
Being able to link the account with other bank accounts
“Internet banking and mobile banking complete the picture,” says Michael, adding that the only requirements for opening offshore accounts is for individuals who are 18-years or older and a required minimum balance in the account.
Other ways of paying your way include:
Using prepaid debit cards that are loaded with foreign currency in South Africa before departure. This means that currency is loaded at a fixed exchange rate. They are also available in several major currencies.
Using an ATM card and/ or debit card:
Alliances between major banks across the globe and wide use of Visa and MasterCard based ATM and debit cards make withdrawing and depositing funds easy. Standard Bank offers an offshore Visa debit card that can be used across the world and is available in four major currencies.
A debit card is a great budgeting tool. Setting a budget for a week ahead and withdrawing the local currency using the card helps assess actual spending against planned spending.
Using an ‘e-wallet’:
This allows purchases to be made on-line or through a smartphone by linking the facility to a person’s bank account. The advantages include being able to withdraw cash at retail outlets that offer the service. Money can be sent to other accounts and transfers into the account made through ATMs.
All functions can be carried out on a card if preferred.
“The price tag of studying abroad can vary greatly. In some countries a university education is available to local and international students at verylow cost. At top British universities like Oxford, depending on the course selected, fees could be between £ 20 000 to more than £ 30 000 a year. In the USA, foreign students can expect to pay US $ 50 000 to more than US $ 100 000 annually.”
“It’s essential, therefore, that before the adventure of a lifetime begins, that the costs of getting abroad and then studying and living abroad are carefully calculated. Speak to a financial consultant if you have any questions,” says Michael.