Managing Finances for a Short-term Stay in Spain
While it is tempting to focus your energy on the exciting aspects of studying abroad, don’t forget to prepare for the more mundane―but utterly important―aspects like finances too! Keep in mind that Spain is still a bit more traditional when it comes to money and that the US cards are not accepted everywhere. You will want easy access to cash and small-to-no fees on withdrawals (as well as, perhaps, a way for mom and dad to get you money too). Let’s take a look at some of the best options to get you all of the above with the least hassle.
1. International-friendly banks: This is the first step to smooth sailing with your finances abroad. Have a chat with an agent at your current bank and inquire about the cost of withdrawals and transactions in another country and in another currency. Most banks aren’t very accommodating when it comes to banking abroad. Keep in mind that even a ‘small fee’ of $5 or 2% will quickly add up over a six month (or more) period.
If you’re unsatisfied with what your bank has to offer, shop around! Some American banks have international partners at which you can do your withdrawals without fees. And other banks are fantastic and guarantee reimbursement on any ATM fees you may rack up while abroad. Check out more details about banking preparation here.
Pro Tip: I have personally been using Charles Schwab for four years now and I could not be more pleased. Not only have I never been charged for ATM withdrawals, they have a 24-hour Live Chat option online as well as a free international phone number so I have never had an issue getting assistance when I’ve had questions. I have not been endorsed by this bank nor do I guarantee they are the best option for you, but the customer service continues to go above and beyond my expectations so I never lose an opportunity to recommend them!
2. Travel-friendly Credit cards: You’ve always heard people talking about how it’s good for your credit score to (responsibly) use a credit card―perhaps now is the perfect moment to get started! Although Spaniards will look at you funny and/or shut you down for trying to buy your café con leche with a credit card, this may not be a bad idea for those bigger purchases, like travel. Additionally, some cards like Capital One and Chase help you accumulate points that can be used for flights and travel accommodations in the future. Depending on your goals and personal spending limits, this could be a good option to reap the benefits while in Spain or later in life. Just be sure to stay on top paying it back!
Pro tip: If you’re still in college, it’s likely you have little-to-no credit and it may therefore be difficult for you to get approved for a credit card. Take advantage if your parents already have a card with a bank/company that you are interested in and see if they can co-sign for you or if you can be added to their account.
3. PayPal: If you don’t already have an account, this is a great recommendation―while living abroad or not. PayPal allows you to set up your account with a credit card or your bank account (with no fees for exchanges of the same currency from a bank account). By creating a “pay me” page or simply giving friends or family the email address you used to set up the account, they can easily transfer money to you and it is available within minutes.
Pro Tip: This is a perfect option if you are booking travel plans with friends or needing a boost to your bank account from your loving parents. However, this money is digital and is therefore only useful for transactions you will do online. As far as I know, there is not currently a way to withdraw from your account for cash, so keep that in mind. Additionally, transfers between accounts registered in different currencies are NOT free so beware when dealing internationally.
One thing to keep in mind―no matter which of the above routes you are using―is the fact that not all conversion rates are not equal! When an ATM or card reader asks me if I would like to complete the transaction in dollars or euros, I find it is typically best to choose euros and allow my personal bank to manage the conversion. However, this may not be true for you so be sure to consult your bank, credit card company, and/or Pay Pal policies before you transfer, withdraw, or make a transaction in order to avoid losing a lot in the exchange.
If you’ll be staying in Spain longer than a semester (especially if you will be working), you’ll have some other factors to consider. You may need to get a Spanish bank account. You may need to look into your options for dealing with student loans. It’s a whole different ball game, so I’ll share some tips with you on that elsewhere. For now, I recommend you check out this resource on Working Abroad: How to Prepare Your Finances for some of the factors you may not have considered yet but that will become very important during your time abroad. Feel free to share about your personal experiences or let me know if you’ve got any questions in the comments below.