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Working or studying abroad? How to save money on currency exchange

1st April 2014 Print

Student Money Saver has already looked at ways of ensuring your holiday travel money is sweating every last drop out of the currency rate – it certainly pays to do your homework, rather than hastily exchanging at the airport 20 minutes before legging it on to the plane. Yes, you’ve got the money you need, but you probably lost some of it by putting up with a poor exchange rate.

But currency exchange covers more than just affecting the money we have in our pockets for a week in Ibiza, or a weekend in Amsterdam; if you’re studying abroad for any length of time you’ll need to transfer funds to pay fees, for example. And, judging by recent studies by UKCISA, the UK Council for International Student Affairs, there are approximately 22,000 British students living and studying overseas. That’s a lot of individuals who should really be clued-up on how to make the most of their money.

Let’s face, foreign exchange is a dry old subject and for those who are studying, working or partying away from home, the mechanics of it all are far from the mind. This free information guide, prepared by World First Foreign Exchange, is a useful introduction to the ins and outs of it all, though. If nothing else, point your parents in the right direction and, with any luck, they’ll take care of everything for you.

If you’re heading abroad to study, it’s a fair bet that you’ll need money transferring across from the UK, either to pay for tuition fees, or to help with running costs such as rent, food and anything else the bank of Mum and Dad generously contribute to.

You need payments to arrive with you accurately, on time, and in the correct currency. If you have set payment deadlines to meet – and again, termly fees or monthly rent would be applicable here – you can set up a regular account and be assured that the funds will always arrive on schedule. You can also go one step further and set up forward contracts, so you can fix an exchange rate as much as three years ahead. That way, you won’t fall foul to the fluctuating rates, which can go up and well as down and affect the amount you actually end up with.

The same process applies if you work abroad. Okay, if you’re holding down a part-time bar job in the evenings and weekends to help fund your studies, you won’t be concerned with rates, but if you eventually settle overseas and pursue full-time employment – and many people do – repatriating your income (sending it back home to a main UK bank account) might be worthwhile. Particularly if you have family or co-dependents you want to send the money to.