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Monday, 16 July 2007

MONEY MATTERS

Ah, yes, money. Everybody's major concern. If we didn't have to think about money then we wouldn't need to think about going to college, or graduate school. Or, we could be taking up one degree after another... Yes, money is a major concern.

Below are some money-related questions that we thought you might have and their answers.

1. How much money do I need?
Tuition Fee/ Semester X Number of Semesters =
Living Expenses/ Month X Number of Months in Adoptive City =
Set Up Costs (Plane fare, apartment deposit, furniture, bedsheets

As you can see there are many variables. Figuring out your living expenses per month in the city of the school you have chosen is the most difficult. It will depend on the current economic situation in your chosen city and in the Philippines. It is also dependent on your lifestyle. Must you have cable TV? Must you eat out all th time? Must you take a taxi wherever you go?

To give you an idea of how much money you will spend every month, interview your friends' friends, parents' friends who already live in the country you want to study in about the cost of everyday items. Being Filipino, you must know someone or know someone who knows someone there. Ask them about the following:

  1. Average rent for a one bedroom or a studio

  2. How much is usually spent on electricity per month? Or are utilities included in the rent?

  3. How much do you spend on groceries?

  4. Transportation? Is public transportation reliable? Will you need to buy a car in the city that you are planning to stay in?

The costs will give you at least a clearer idea of how much things are and how much you will need to live on per month. Also take advantage of your potential school's office for international students. They are used to our concerns and may have a booklet, brochure, or a web site that may help you. Constance Uy, who studied in the National University of Singapore and the Virginia Polytechnic Institute and State University in the US, advises that you check out Filipino student associations located in your host country. “They are very helpful when it comes to fact-finding.”


2. What is the safest way to bring all my life savings/ my share of my parents' inheritance with me?

If you are like most international students, majority of your income while abroad comes from your home country. This being the case, many of our survey respondents reported that they opened a joint Citibank dollar account with their parents while they were in the Philippines. They then withdrew money from that account every semester and deposited the money into an account that they opened in their new home country.

You will need to open a local account to better manage your finances. Also, when you start making your own money through an internship or a part-time job, you will want to deposit your earnings. It is cumbersome to deposit money to an account opened in the Philippines.

For those who didn't have Citibank accounts, many brought the money they needed for the first few semesters in various forms: cash, post-dated checks, travelers checks, and diamonds. Just kidding about the diamonds. They then deposited the money into their own bank accounts and then replenished the amount via the post-dated checks or wire transfer.

Many Philippines-based banks offer wire transfers as one of their services. Your relatives or friends in the Philippines can transfer your funds in the Philippines to any bank account that you specify abroad. Wire transfers cost a bit much (especially if you convert it into pesos). Plan well so you don't have to request for a wire transfer often.

If you are studying in the UK for less than 12 months, you might have a hard time opening a bank account. Some banks will not allow students staying for a short period of time to open an account. Check with your bank in the Philippines if they have partner banks in the UK. Also, the logos on the back of your ATM card should also provide a clue as to which ATM machines in your host country you can access money from.


Tips for Opening a Bank Account in Your New Home Country


1. Ask if the bank has a minimum balance requirement. You don't want to be shelling out money monthly for nothing just because you don't have enough money in your account.

2. Ask if the bank has special student deals. These deals usually have no minimum balance requirement, free checking, but a low-interest savings account.

3. Inquire about the process of transferring money from the Philippines to your host county and vice versa. Ask about the fees charged for this service.

4. If you have a chunk of money that you don't think you'll be using until the next semester, put it in a Certificate of Deposit, sometimes called a time deposit for 3 to 6 months or more. Having a certificate of deposit or a fixed deposit account gives you a higher interest rate than a regular savings account. The only drawback is that you cannot touch that money for a specified amount of time.

5. Ask if your bank provides its services online. You will be busy during the school year and there is no greater hassle than standing in line to deposit or withdraw money. With most online accounts, you can even set up your preferences to automate the paying of your bills! Cool, huh?


Click here to see list of PNB Offices around the world.


Trivia: International students contribute approximately $13.5 billion dollars to the U.S. economy, through their expenditure on tuition and living expenses. Institute of International Education, 20061 Study

3. What will I be spending for each month?

  • Electricity

  • Water

  • Gas

  • Phone/ Cell Phone

  • Cable

  • Internet Connection

  • Transportation

  • Food

  • Laundry

  • Weekly Allowance

  • Fun Stuff (books, movies, music)

  • Emergency Money

  • Health Insurance

We hope that the list above will help you keep track of the crest and troughs of your expenses as well as help you save some money in case of emergencies. But take special note of the Fun Stuff item. Use it monthly to watch a play or to go mountain biking. Or put it aside to take a photography class, a wine tasting class, or even skiing lessons. In spite the workload of homework, chores, and coping with your new surroundings, this is really a great phase in your life. Really!!!! For most of us, there are no kids to be responsible for, and no parents nearby to answer to. Enjoy! Make sure that you spend your time and money not only on books but also on things that fascinate you and will make you grow! It's part of your education.


Wise Words: What I really, really recommend is to make yourself an Excel file which I did for two years! Believe it or not, I jot down every single expense for the day and that was divided into pretty much, food, entertainment, school, materials, travel allowance (bus cards, cab rides) and what's good about this is is on a total basis, on a monthly basis you see where you are spending more. You can discipline yourself where to cut down more. –Arthur Manalac, Sydney University, Australia

Wise Words: You need not pay much to amuse yourself in DC because all museums have free entrance and all tourist attractions are walking distance. –Joy Quintana, Johns Hopkins University, DC

Trivia: 80% of Survival Guide Survey Respondents were able to get additional funds through teaching assistanships, summer internships, working in the library, or teaching English.


4. Can I work while studying? How can I get more money without asking from my parents?
In the US, the best and the most legal way to earn money while studying is to work in school. Graduate Assistanships or Teaching Assistanships are ideal because payment includes course credit as well as a stipend. In addition, working in school does not eat up the one year of practical training that is part of your F-1 visa. There are other jobs, however, like being a research assistant or a work study where you don't get tuition credit but you get some pay. Always keep your eyes open for signs announcing these kinds of job openings. Also, befriend the secretary and the head of your department, let them know that you are looking for a job. The more people you have looking for you the better.

As mentioned above, your F-1 visa allows you work in the US for one year of practical training. You can get a legal, better paying job using that allotted year. Make sure that you check with your school's international student's office before you apply for a job just in case there are changes in work regulations.

If you are studying in the UK, you should check your passport. The UK immigration office puts a stamp on your passport which delineates whether you can work or not. Some students are allowed to work up to 20 hours per week during the school year and during vacations but not after you graduate. Check with your school’s international student’s office. The UKSCOSA Council for International Education is also a great resource. (www.ukcosa.org.uk)

Other countries like Australia and France also allow foreign students to work up to 20 hours a week. Again, check with your school’s international student office before you apply or accept a job. The rules constantly change.

Finally, there are also under-the-table jobs like tutoring, correcting the papers of non-native English speakers, bartending, and waitressing. Many of the Filipino students who went to Japan to study earned some extra money from teaching English (about 50 US dollar per hour!). In most countries, one needs to have the proper paperwork in order to gain employment, there are many, however, who have gotten away without having them.

5. Should I get a credit card? How important is it for me to build a credit history?
In the US, credit cards are as ubiquitous as Coca Cola. In spite of the very high interest rates, many Americans carry credit cards and almost all the stores accept them, so we understand the pressure of wanting to have one even if it is a temptation to spend money that you don't have.
In addition, in the US, credit cards are necessary to build a credit history. When you rent an apartment, buy or lease a car, or apply for a loan, your credit record-essentially whether you pay your credit card bill on-time-is one of the customary steps before you are approved.

It is for this latter reason that if you are based in the US, we advise you to get a US credit card, especially if you plan on working in the US after graduation and might need to buy a car or rent your own apartment. Apply for a credit card while you are in school. One Yale student suggests signing up during registration time. "There's always some Amex or Visa card table set up and they really sign you on quickly." Because the credit card companies want our business as early as possible, they start by targeting us students by giving us a credit card with a low limit. Or check if your bank can provide you with a credit card with a low balance. The low limit is fine since we will only want to use it for emergencies and to build credit history. Right?

Should you have problems acquiring a credit card because of residency restrictions, another way of getting a credit card in the US is by getting a credit card which is extension of the card of a local resident. A graduate student at Fordham University in New York got an extension card through an aunt of his and built his credit history using that card. Other ways to build credit: Have a phone bill addressed to you.



Trivia: Some universities allow you to pay your tuition fees via credit card. You can use it to get mileage if it is an airline credit card. It is also a good way to pay for all the family bilins one cannot afford on a student’s budget. Check with your school if you can do this but also inquire as to whether a service fee will be added to the amount. –Titchie Carandang-Tiongson, New York University, New York

In Europe and in Japan, fortunately and unfortunately, credit cards are not
as common. Many shops do not accept them so many students are forced to live
within their means.

Oh, two more things. If you think you need a credit card while you travel from Manila to your adoptive city in case of an emergency, you can apply for a Philippines based credit card that enables you to use it outside of the archipelago. Make sure that you tell the customer service representative that you plan to use it abroad.

Finally, for those students who are off to Europe, our Europe based interviewees suggest that you take a Mastercard or Visa credit card. According to our survey respondents, few establishments in Europe accept American Express.

6. What are debit cards?
Debit cards looklike credit cards but work like checks. Some of the ATM cards that banks give out are also debit cards. When the seller swipes your card, he or she is actually deducting the amount from your bank account.

7. Do I have to pay taxes in the country I am staying in?
Most governments do not require us foreign students to pay taxes especially since our income is usually derived from sources outside of our host country. For students who are part-time employees however, a certain amount of the money that we make while a student is taxable.

In the US, students who make more than 3000 US dollars per year, are required to file an income tax return. In Japan, the amount is one million yen per annum. These exemptions, however, are only valid for a certain number of years. To be safe, check with the tax department of the government of the country you are staying in.

Australia: http://www.ato.gov.au/

France (English site): www.info-france-usa.org/intheus/tax/fit.asp


Japan (Japanese): http://www.nta.go.jp/


US: http://www.irs.gov/

UK: www.inlandrevenue.gov.uk/


8. I am earning some money while abroad, do I have to pay taxes to the Philippine government?
According to the Philippines' Bureau of Internal Revenue website, one is exempt from paying taxes to the Philippines government if he or she is "a citizen of the Philippines who works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year."

So, the answer is no.

Philippines: http://www.bir.gov.ph/





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