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Managing your finances is one of the most important and challenging aspects of a successful and enjoyable academic experience. Dealing with a new currency and cost of living are the beginning of the challenge. Before you leave home, pay attention to the exchange rate between your country's currency and the U.S. dollar. Learn to think in dollars.
Take a close look at your I-20 or DS-2019 and prepare a budget for yourself based on the estimated expenses on the form. Use the list below to help you think about all of the possible expenses you may have.
- Meals (often called "board")
- Health insurance
- Communications (Telephone and mail)
- Personal expenses
- Family expenses
The estimates that appear on your I-20 or DS-2019 are usually accurate, and you will be expected to have funds to cover the full amount shown. It is not possible to arrange for more financial aid once you have arrived at UM-St. Louis. If you are a graduate student and have an assistantship, be sure you understand what it will cover and what you will be expected to pay from your own funds. If you will receive a scholarship or fellowship, determine ahead of time what portion is taxable and include the necessary taxes in your budget.
Be careful in handling American currency. With the exception of the new $100 and $20 bills, all American paper money looks alike, so keep your eyes open when paying or receiving cash. Our coins can be tricky, too. The five-cent piece is known as a nickel, the ten-cent piece as a dime, and the twenty-five-cent piece as a quarter. A dime is smaller in size than a nickel, even though it is worth more.
Start budgeting from the time you arrive. Bills often take a month or two to arrive, but arrive they will! Don't fool yourself into spending the money you'll need to pay them.
Transferring Funds to the United States
Traveler's checks are the safest way to carry money, but be sure to record the check numbers and keep the record separate from the checks. Do not carry large amounts of cash.
The best ways to carry or transfer money are:
Traveler's checks (in U.S. dollars)
A bank check (also called a cashier's check) drawn on a U.S. bank in U.S. dollars
A "wire transfer" from your bank at home to your new institution (if you are paying a bill) or to a U.S. bank.
Avoid checks in U.S. dollars drawn on a international bank. Such checks take much longer to "clear" than do checks drawn on U.S. banks or even checks in your home currency drawn on a bank at home. Remember that until a check clears, you will not have access to the money it represents.
Opening a Bank Account
Once you arrive at your new institution, you will want to open a bank account at a local bank. It is sometimes possible to set up an account from abroad, and some international financial institutions allow you to write U.S. dollar checks on funds deposited abroad; but most local banks in the United States will want you to come in personally to set up your account. When you do so, bring your student identification, your passport, and the funds you wish to deposit.
Banks offer many different financial services. You may wish to compare the services and costs of several banks before choosing one at which to open an account. One bank may be more conveniently located than others; another may have more automated teller machines around town; a third may charge less to maintain a checking account; a fourth may allow you to do your banking from home via computer. Banks are competing for your business, so don't be shy about asking questions.
A checking account will permit you to write checks to make purchases and pay bills. Most retailers and service providers will accept a personal check drawn on any U.S. bank (it need not be a local bank) as long as you can show appropriate identification (passport, student identification card, or driver's license).
By using checks, it is easy to keep records of your purchases and payments. At most banks you need not keep a substantial sum (or "balance") in the account-just enough to cover your checks and any fees the bank charges to maintain the account. Many banks offer "overdraft protection," enabling you to write a check that exceeds your balance with the understanding that you will pay interest on the overdraft amount. Finally, checking accounts have the advantage of providing you with immediate access to your funds.
Unlike most checking accounts, "savings accounts" earn interest on the balance in the account. If you plan to bring money for the entire academic year or for your entire academic program, you should be sure that your money earns interest! You can withdraw money from an ordinary savings account, but you cannot do so by writing a check.
Many banks offer so-called NOW (notice-of-withdrawal) accounts that combine the features of checking and savings accounts. With a NOW account, you may write a certain number of checks each month; such accounts can be very handy for students who maintain a relatively high balance and write relatively few checks.
Many students open a savings account and a checking account at the same bank so that they can transfer money from the interest-bearing savings account into their checking account as they need it.
Certificates of deposit (CDs) pay higher rates of interest than savings accounts, but your deposits must be made in certain amounts (usually in increments of $1,000 or more) and must remain in the bank for a specified period of time (usually a minimum of three months) before you can use them. The penalties for withdrawing money before the specified time has elapsed can be quite substantial. A CD account makes sense if you bring money that you will not need right away.
Other Banking Services
A safety deposit box, available at most banks, is a good place to store valuable possessions such as the airline ticket for your flight home, expensive jewelry, international currency, and the important documents you brought with you. You rent them at the bank on a yearly basis at the cost of around 30 dollars.
A "debit card," also known as a check card, allows you to withdraw or deposit money to your bank account using an automatic teller machine (ATM) and to make purchases at stores that accept the card. Some debit cards carry a credit-card logo (such as MasterCard or Visa), and can be used in place of a check or credit card. Debit cards are not credit cards, however, and they can be used only to the extent that you have funds in the account to which they are linked, as the money will be debited almost immediately from your account.
Credit cards will allow you to make purchases even when you have no money immediately available. Banks and other financial institutions, department stores, and gasoline companies all issue credit cards that can be used to buy goods. You are billed every month and are required to pay at least a portion of your balance each month. If you do not pay the entire amount due, interest (or a "finance charge") accrues on the unpaid balance. The interest rate can be quite high, particularly if you have not yet established your "credit worthiness."
The cost of credit cards varies greatly. The annual fees and interest rates charged by some financial institutions are much higher than others. Many cards offer premiums or awards linked to the amount you spend using the card. Ask your advisor or fellow students: It really pays to shop around. Once you establish a "credit history," or if you have significant assets, you should be able to obtain a card with a lower interest rate and little or no annual fee.
Credit cards are convenient, but unless you are careful about your spending, you may be shocked when you get your monthly bill. Keep all of your receipts in order to keep track of what you have spent. Debit cards are a better solution for students who have trouble managing their debt. They are as convenient as credit cards but do not allow you to spend more than you have.
UMB operates a bank on campus in the Millenium Student Center, but Normandy Bank (7151 Natural Bridge Road, tel. 383-5555) is also nearby.