In this article we are going to explore some of the day-to-day aspects of personal finance for student-athletes. Let’s assume a couple of variables: A. we expect everybody to have a local domestic bank account and B. we expect everyone reading this has some basic budgeting knowledge, C. few people will have a bank with international operations or services, and if they do, it is usually through a third party or partner. On a side note, you ought to do as much research into your own personal situation as possible to determine what is the best possible option for you, so please utilize this article as a starting point for further exploration.
Local banking is easy but international banking can be a huge hassle. You must be conscious of several extenuating factors such as foreign-transaction fees and exchange rates. Depending on your bank, they might charge you for making transactions abroad and they may or may not give you a good exchange rate on those purchases (usually though you get a better bank exchange rate than money changers or card machines abroad). I suggest you contact a representative at your local branch or search online to see if your bank has a debit or credit card with “no foreign transaction fees” as many debit or credit cards will charge you a fee between 1-5% for spending money abroad.
If you have a card with no foreign transaction fees, that’s good, always choose to pay in the local currency, as any Visa or credit card machine will give you a bad exchange rate. To reiterate, if while abroad they ask you “do you want to pay in euros” (or whatever the local currency is) or “do you want to pay in dollars” it’s usually best to pay in the local currency.
Likewise, there will be fees assessed for taking money out at a local ATM using your domestic card in a foreign country. Some banks will provide a service where there are no fees, you can also open up a bank account at a bank in the country you will be moving to - however, putting money into this account will cost you money in service fees or transfer fees. So it is usually good to set up a foreign account in the country where you are traveling to and transfer money to that account.
Transferring money from one bank to another costs money and that’s just a bummer we all have to accept. TransferWise is an excellent low-cost money transfer service. TransferWise provides a good exchange rate and also charges very low fees. It is the best way to transfer money internationally from one account to another and they also provide some personal banking services as well. PayPal can do money transfers but they charge hefty fees. There are additional low-cost options available, so always do your research or ask a friend before using a new service. Do some research and find the best option for you.
Cash or Card
Is cash really necessary anymore? In most countries and at some venues, yes it is, so it is always a good idea to have some cash on you and to be patient when it comes to exchange rates. However, at most places and especially in the U.K. or USA you will be able to use a card or other digital payment options. Make sure to maintain a relative awareness of the Google rate, that will allow you to be more informed regarding rates you might be charged. Sometimes, knowing the difference will enable you to make the right decision. When exchanging currencies, are you willing to pay a commission or are you better off using your card? If you have a card with no foreign transaction fee, that will always be better than exchanging cash at a local or international place.
In Europe, Revolut is a great option for digital balance transfers and micropayments and it even offers investing opportunities and Crypto while American counterparts such as cash app and Venmo allow you to transfer cash easily, and they connect directly with your bank account. Most brick and mortar banks are no longer adequate when it comes to handling your international finance needs. You are better off having a domestic and digital bank, and potentially a third bank in your international “home” at least whilst you’re there.
Depending on your situation, you may or may not want to take on debt to finance your education. It’s always your choice. While it is good to aim for the highest scholarship you can get, taking on debt is okay as long as the value derived from the debt will create a positive overall opportunity for you. You can literally make an objective calculation based on data by making a decision algorithm. Some things to consider when making the decision about incurring additional debt can be found here. If you’d like to discuss this with people who have been in the same or a similar position as yourself, please reach out to discuss.
I hope that you were able to learn something from this, or that we were able to provide you with some helpful tips regarding your student finance. We’re always available to answer any more detailed questions you might have so please reach out! Please reach out and make sure to follow us on Facebook, Instagram, and LinkedIn if you have any questions.
None of the above information constituents professional, financial or legal advice. We are not pretending or assuming to be financial professionals in any context. This article is merely an opinion piece that reflects “anecdotal wisdom” from a student-athlete’s POV who has attended university abroad in the U.K.