Are you an international student? Then these are the financial habits you must unlearn

Studying abroad is a dream for many. And for those international students who overcome the odds to go after their dreams, studying overseas is an exciting milestone. A milestone as noteworthy as this also comes with its own set of challenges. The financial trials, in particular, often catch many students off guard. While universities around the globe offer guidance on tuition and accommodation costs, everyday money management and other miscellaneous living costs are often left unaddressed. 

A Gross Underestimation

According to HSBC's Value of Education report, over 60% of international students underestimate living expenses during their first semester. This is largely due to their unfamiliarity with the country's financial systems and cultures.

Here are five common financial habits that international students need to reconsider to make the most out of their time there:

1. Relying heavily on cash: Many students arrive with wallets full of cash only to find out that their new home operates almost entirely on a digital payment framework. Physical cash is rapidly becoming obsolete in many countries. Therefore, students must open a local bank account immediately upon arrival. Options like N26 in Europe, Monzo in the UK or Wise globally offer free student accounts with contactless cards and low international fees. 

2. Avoiding credit cards completely: Not having a credit card can often be a costly mistake. Building a credit history is an important step forward towards your future financial opportunities. Presently, many background checks now include credit scores and students without an established credit history are often heavily disadvantaged. The key is using credit responsibly rather than avoiding it altogether. Students should consider low-limit and no-fee credit cards.

3. Not tracking your daily expenses: Small purchases add up quickly, especially when you are still learning the waters. Without clear tracking, students often struggle to identify where their money actually goes. However, all thanks to modern banking apps, international students can now make expense tracking almost effortless. 

4. Ignoring hidden and recurring costs: Initial budgets typically cover obvious expenses like rent and groceries but students often overlook recurring charges that accumulate over time. Campus service fees, seasonal heating bills, mandatory health insurance and annual transit passes can sometimes derail your monthly budgets. Planning for these costs early on can prevent budget emergencies later.

Start Now

Start today, even before arriving at your University. Begin by researching your destination's payment norms before arrival. Open local accounts early, establish credit responsibly and don't hesitate to seek guidance when needed. The students who thrive abroad are those who view change as an opportunity to expand their capabilities rather than look at them as immovable obstacles. By adjusting financial habits thoughtfully and proactively, international students can focus on what truly matters: their education and the incredible experience of living in a new country.