Money, money, money

At a time in her life when she was just learning to manage and budget money, we sent her off on one of the most difficult financial situations available to a teen - - living overseas. For background information:

• My daughter had had a debit card for several years, but she has never had a credit card. 
• She had traveled overseas and handled foreign currency, but always with parents' input. 
• She has a savings and checking account through Wells Fargo.
• She had been working for almost a year prior to going.

The financial advice we received before she left varied widely. I will try to condense the most important points that should apply to any country your child is going to.

How much money should study abroad students budget for?

This is really hard to answer as it depends on so many factors: destination country and city, strength of the dollar compared to the local currency, and your child's personal spending habits (to name a few).

YFU suggested $100/month in one publication and $300/month in another. My daughter ended up in a rural area, so there are not a lot of opportunities to spend big money. Her scholarship covers anything school-related (including a bus pass to get to school and any books, but not supplies like paper and pens). 

What is the best way to send my child money?

My daughter has never had a credit card, and we thought now was not the time for her to learn to use one. It can get out of control pretty fast. She has her debit card, which is connected to her saving account and our bank account (we can get into her account, but she can't get into ours). Each month, we put a set amount of money into her savings. Once a month, she withdraws a set amount of cash, and that is her budget for the month. She uses her debit card to buy minutes online for her phone and for other purchases online. It has worked well, both in terms of budgeting and avoiding transaction fees. There have been a few things she needed a credit card for; she wanted to book a tour at Neuschwanstein Castle, for instance. The company would not take a debit card online, so I booked the tour for her and transferred the money from her bank account into mine. Having your bank accounts linked is the best advice I can give.

Initially, it was suggested that she set up a "free" bank account in Germany and get a German debit card. YFU will only deposit reimbursements into a bank account. Unfortunately, due to the refugee situation in Germany, the banking laws have changed. She was not allowed to set up a bank account, but YFU will still only deposit reimbursements into a bank account. She has to have it deposited into her host family's account, and they pay her back. The American debit card was problematic at first as she had trouble finding an ATM that would take it, but now she knows what to look for. She has a VISA card, and she was told VISA is very unusual in her area and that Mastercard would have been better. 

Two other issues to check before departure - - double check the daily spending limits. We completely forgot that they were still set to her 13-year-old limits, so she had trouble withdrawing money until we changed her limit. Also, alert your bank that your child will be traveling in a foreign country so that they don't block the card.

Where can we get foreign currency before departure?

We live in rural Minnesota, so no local banks exchange foreign currency on a walk-in basis; however, Wells Fargo has a foreign currency exchange service. You can order money in any currency online. I say you because your child (if younger than 18) will not be allowed to exchange money through this service. It has to be from an adult's account. They can deliver the money directly to your house or to the local branch. There is a fee, but it was not excessive. The fee is higher if you need it rushed.