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Five Steps to Managing Your Money as a Student in the U.S.

By Diane Amato

Published June 15, 2023 • 5 Min Read

Living far from home can be both thrilling and stressful – and it can be especially overwhelming when you’re moving to a new country. Since money can be one of the biggest sources of anxiety for students, it’s worth taking a few steps to get financially prepared before you leave for school:

  • Creating a budget

  • Managing credit carefully

  • Sticking to U.S. dollars

  • Finding ways to stretch your dollars

  • Watching out for scams

1. Create a budget

The goal of a budget is simple — to make sure you have more money coming in than going out. The mere word “budget” might make you cringe, but it’s actually a helpful tool to keep your money straight — and it doesn’t have to be super time-consuming or complicated.

A budget is an overview of what you have, what you earn and what you spend, including:

  • Your savings. What do you have on hand to cover the costs of your year ahead?

  • Your income. This could be money coming in from a scholarship, received from family members or earned through a part-time job.

  • Your fixed expenses. These are the things you have to pay for each month — like rent or utilities.

  • Your discretionary expenses. These are flexible costs and can range from basic groceries to dinner out to a ride-share.

You then assign a dollar amount to each of these categories, and as you go through the month, check in to see how you’ve been doing. Did you allocate enough for groceries? Using a budgeting app can make it easy to track your money and see where it’s going.

2. Manage credit carefully

Just like in Canada, credit cards are used more than cash in much of the U.S., so having one is a good way to pay for your expenses as they come up.

If you’re approved for a credit card1, it’s a good idea to only use what you need then come up with a repayment plan as part of your budget. Setting up an automatic plan is a great way to ensure you’re covering off your minimum payment by the due date.

3. Stick to U.S. dollars

Comparing U.S. and Canadian dollars is like ‘comparing apples to oranges.’ While they have some similarities, they’re different currencies with different values. A pair of shoes or a book might appear less expensive on the price tag than you’re used to, if the price is in U.S. dollars it could be more expensive once you factor in the exchange rate. Plus, if you use a card based in Canadian to make purchases in the U.S. you’ll be charged up to 2.5 per cent in foreign transaction fees on each purchase.

So, it’s worthwhile to do your banking, budgeting and spending all in U.S. funds. Getting a U.S.-based bank account1 is a great starting point, as it will allow you to easily pay your expenses through online banking transfers and cash accessed at an ATM.

4. Find ways to stretch your dollars

There are definitely perks to being a student. Whether on- or off-campus, your student status may get you discounts on food, transportation, technology, retail, insurance, cell phone plans and more. If a discount isn’t posted, make sure you ask about what kind of pricing is in place for students so you can help your money go further.

While you’re at it, see if there are other ways to offset costs. Do your parents have any rewards points they can redeem for something practical like a coffee maker, tablet or mini-fridge? Are there any scholarships or awards you can apply for at school that can get you free money? Can you find a grocery store with cheaper prices or used book stores with deals on the materials you need?

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5. Watch out for scams

While you’re away at school, there will be a lot of people in your corner ready and willing to offer help when you need it. From school counsellors to professors to student advisors, people are committed to helping students manage classes, anxieties, financial stresses and social pressures.

Unfortunately, not everyone you’ll encounter while away from home will be out to help you, as scammers are known to take advantage of young people living on their own for the first time. It’s therefore important to protect yourself, your money and your information, especially when online. Be careful not to click links in emails or texts from senders you’re not familiar with, share your account information with anyone you don’t know or share information over public WiFi. And if you’re offered a promise or prize that seems too good to be true, it probably is!

As you get ready to start the next chapter of your life, there is a lot to be excited about! When you have the money side of things in good shape, you can focus on the new things you’ll learn, the new people you’ll meet and the new memories you’ll have for a lifetime.

1. All loans and lines of credit are subject to credit approval.

Diane Amato is a Toronto-based freelance writer who loves to talk about finances, travel and technology.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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