Setting Up Your Financial Base in the USA as an International Student

Moving to the United States for your higher education is an exciting experience; it’s got all the challenges and opportunities worth encountering. And one of the most important aspects of this experience is setting up a comprehensive financial management system, one that’s equipped with the strategy to tackle any obstacle that can be solved through money.

So, today we will be talking about a few financial management strategies that can help you during your study abroad. Let’s get started!

Understanding the Financial Landscape

Okay, the first step in setting up your financial base is to deeply understand the comprehensive financial management system in the United States. And this includes familiarising yourself with the banking system inside the country, understanding the types of accounts for your financial planning, and lastly knowing the financial terminology. Let’s take a look at the first one.

Opening a Bank Account

This strategy acts as a base upon which you will be setting up your comprehensive financial management infrastructure while living in your student housing in Chicago.

1. Choose the Right Bank: Firstly, you must start by researching banks and decide the one that offers student-friendly services. And major banks like Bank of America, Chase, and Wells Fargo often have specific accounts tailored for students’ needs like efficient money transfer in USA.

2. Gather Necessary Documents: Next up, you should gather your documents like your passport, student visa, I-20 form (Certificate of Eligibility for Nonimmigrant Student Status), proof of residence, and your university ID.

3. Select the Type of Account: Also, you must check if the type of account you’re choosing for financial management has low or no maintenance because as a student you’re not going to have a lot of cash to spare.

4. Visit the Bank: Following this, you must visit the nearest branch of the bank you’ve chosen. However, you should avail of their comprehensive financial management online services if present.

5. Deposit Funds: Okay, after all this the natural step would be to deposit the intended amount in your student bank account. Do this and we are ready for the next step.

Understanding Credit

Now, you must understand that credit history is absolutely crucial for many things in the United States; from renting apartments, money transfers in USA, getting loans, and even securing certain jobs, it affects all.

1. Get a Secured Credit Card: This type of card asks you for a deposit that can serve as your credit limit. And it’s easily obtainable if you have a credit history that reflects your comprehensive financial management.

2. Use Credit Wisely: Here, you can make small purchases and pay off your balance each month to build your credit score.

3. Monitor Your Credit: Additionally, you must also regularly check your credit report for any awkward inconsistencies. You can outsource this to either Equifax, Experian, or TransUnion.

Budgeting and Managing Expenses

Yes, living on a small budget can be daunting, but when done right, it helps you manage your finances better.

1. Create a Budget: You should start by listing your income sources- part-time job earnings, including any scholarships. And then move on to list your cost of living in USA like tuition, student housing in Los Angeles’s rent, groceries, transportation, and entertainment.

2. Track Your Spending: We’d also suggest that you use apps like Mint or YNAB (You Need A Budget) to monitor your spending and track your budget.

3. Save Regularly: Additionally, we recommend that you save some portion of your study abroad income each month. Doesn’t matter if it’s small because it can still act as an emergency cushion.

Employment and Income

Here, we want to make you aware that international students on F-1 visas are limited in terms of employment. And here’s what you need to know.

1. On-Campus Jobs: So, having an F-1 will grant you the permission to work up to 20 hours per week to aid in comprehensive financial management during the academic year and full-time during breaks. You can check with your university’s international job office for opportunities.

2. Curricular Practical Training (CPT): So, this allows you to work off-campus in a job related to your field of study, but only after completing one academic year.

3. Optional Practical Training (OPT): Okay, after graduation you can apply for OPT, which permits you to work in your field of study for up to 12 months (or 24 months for STEM fields).

Handling Taxes

Now, after being all that particular about your financial management, if you are not careful during paying taxes, you’ll mess up. These tips will educate you on it.

1. Understand Your Tax Status: So, you’ll be considered a non-resident alien for tax purposes if you are an international student with an F-1 visa.

2. File a Tax Return: Now, even if you don’t earn, you might still need to file Form 8843. And if you earn, you’ll be filing Form 1040NR or Form 1040NR-EZ.

3. Seek Help: Additionally, you can also utilise resources like your university’s international office or seek professional tax advice to ensure compliance.

Financial Aid and Scholarships

As we all know, to ease students’ financial burdens a host of organisations and institutions offer scholarships, grants, and other financial aid options. And luckily most of these organisations offer aid to international students. You’ll just need a bit of looking.

Conclusion

Now that we’ve come to the end of this blog, we can say that setting up comprehensive financial management as an international student in the USA involves careful planning and management. Nevertheless, after understanding the financial system; opening a bank account; building credit; budgeting; managing income; and complying with tax regulations, it becomes a piece of cake. We’d urge you to be patient and practice due diligence at all times. All the best!

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Author’s Bio

Ayush is a daydreamer with a knack for rationalising his abstract thoughts into reality. You will find him gazing at the flowers, longing for the raindrops to play music on their soft petals. He likes to enjoy an unhealthy amount of cinema, for he believes that is the healthiest way to live a thousand different lives.