Ash Pickett is a Business Administration Junior and opinion columnist for Mustang News. The opinions expressed in this article do not necessarily reflect those of Mustang Media Group.
To all of the Mustangs considering studying abroad in the future, those who have already begun meticulously planning, or even those immersed in another country seeking guidance through this transformative journey: welcome to the complete guide to your international experience.
Are you so excited to talk about the most fun part of studying abroad? If so, find another article.
Welcome to financing, arguably the most difficult part about your travels. At least, it is for many people. Although it’s not a sexy topic, it’s one of the most important considerations in your decision to go abroad as well as your conduct while there. So buckle up, and let’s get it over with now.
Whether you’re paying for study abroad out of your own pocket, with student loans, with grants, with financial assistance from loved ones or some combination of those, I encourage you to view this as a financial opportunity, rather than a burden. The mindset you come into it with can change the whole game for you.
Think of this as a chance to gain financial acumen, independence and a broader perspective on the way the world works. If you see finances as a stressor, it will no doubt turn into that, and your experience will be a lot less fulfilling. So try to view it in a positive light.
My goal today is to be as transparent as possible so that you can have the right tools for you personally to finance your experience.
Keep in mind I am not a financial advisor but rather a 20-year-old college student. Take everything I say with a grain of salt, and consult an adult or an advisor before making any large-scale financial decision. My numerical examples are also more relevant for semester-long programs, rather than two-quarter-long programs, year-long programs, or unique programs like Semester at Sea. However, this advice can still be applicable.
I’ll lay this out in two major sections: financial planning before abroad and budgeting while abroad.
- Financial Planning Before Abroad
There are a few major questions you should be asking yourself. What is my overall budget for going abroad? How much am I willing to spend on this experience?
Start with this: I recommend you have at least three months worth of your cost of living (rent, groceries, bills, etc) in a high yield savings account or another similar high-interest account. You shouldn’t touch that money unless there’s an emergency.
For example, if you pay your own rent in San Luis Obispo, groceries, cost of transportation, and utilities, one month of cost of living might look like $1,700, ballpark. Therefore, you should have around $5,100 in your HYSA.
Personally, if there was ever an emergency abroad, I knew I was lucky enough to have my parents to lean on financially. If you have this privilege, great – you can opt out of the HYSA (though I still think it’s important for everyone, regardless). However, if you are completely financially independent, I can’t stress enough the importance of having emergency savings by your side.
After you put away your savings, whatever you’re left with in your regular checking or savings account(s) is what you have to work with, plus your future expected earnings. When I decided to go abroad in early 2024, I knew I’d be working full-time (40 hours/week) at minimum wage over that summer. Any money I made from that would go toward non-program related costs abroad, like flights, food and activities.
I knew the cost of my program would land entirely on student loans, and that was a burden I was willing to take on. I capped myself off at $12,000 for loans, meaning my program cost would have to be around $14,000 or less, taking into account money I could pay out of pocket from my campus job and projected scholarships.
In total, I was willing to spend around $18,000 maximum to go abroad, ideally falling within the $15,000-16,000 range. My program fees ended up at around $11,000 after scholarships. Including the cost of living, I spent a grand total of approximately $17,400, of which less than two-thirds are on student loans.
How did that happen, when I estimated spending within $15-$16k? The answer is unexpected costs and emergencies, which will no doubt happen to you while you travel. So be prepared.
Some people’s program fees, like Cultural Experiences Abroad (commonly known as CEA), are closer to $20,000 – almost double mine. If you do CEA and expect to spend anywhere from $5,000-$10,000 out of pocket while abroad (low vs. high ends, based on my subjective experience), separate from program fees, you might end up spending upwards of $30,000 on your experience.
- Budgeting While Abroad
Great, now you know how much you’re willing to spend. Maybe you’ve chosen a program at this point, and you’ve applied for scholarships and grants, toughed out some student loans, or called up Grandma for early Christmas money.
You know your approximate budget for your cost of living while abroad, that is, non-program fees. Let’s talk about how to work with it.
I was over-the-top with my budgeting. I had a Google Sheets file with different sheets for the four months leading up to going abroad to track my average spending, one page to calculate how that would apply while I was abroad, and finally one sheet to log every single expense I made abroad. It was color-coded, sectioned off by week and type of expense and a pain in the butt to open up every time I bought a coffee.
Excessive, yes. However, it kept me on track. So I’d recommend doing what works for you. But how do you know what works for you?
A great place to start is where I did; tracking your regular average expenses over a certain timeline before you leave.
If you’re particular like me, you can track the different kinds of expenses within a month, like how much you spend on groceries, eating at restaurants, utilities, gas, shopping, etc. Otherwise, it’s as easy as looking at your credit card statement and seeing how much you spend in a month, on average.
From there, you can estimate how much you’ll spend for however many months you’ll be abroad. Make sure it fits well within your budget because the next step is adding in the cost of travel or other miscellaneous things.
On top of your day-to-day expenses, you’ll likely be booking flights, Airbnbs, and hostels on the weekends. If you’re away, you’ll also be spending more money on food and activities. Even if you stay in your home country, you can count on spending more money than you’d initially anticipate. With budgeting, it’s great to know exactly what you’re going to spend and what it’ll be on, but the reality is that life isn’t that predictable.
So, here you are, planning out your time abroad and hopefully feeling a little better about how the heck you’re going to afford it.
I want to reiterate that regardless of how scary this all may seem, and how pertinent learning personal finance is in life, all things considered…it’s not that serious. College is all about learning and making mistakes.
Does this mean you should be financially irresponsible? Absolutely not. Have an emergency fund at the ready, invest your money in a retirement account if you so please, and for God’s sake, double-check your debit and credit card statements for fraud.
That said, don’t feel guilty about roughing it a little in college. You have the rest of your life to work, and you’ll see money in your career if that’s what you want. For now, enjoy going abroad. Enjoy it a little bit more, knowing that you can be financially confident, and appreciate the privilege to have this experience at all.