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Welcome to the U.S.—And Your New Student Budget

As sure as he was about New York’s School of Visual Arts, Shantanu Sharma and his family had mixed feelings about picking one of the world’s most expensive cities for him to live and study for the next four years.

“It’s a dream to be on your own with the freedom to spend time and money as you like,” said the 17-year-old, who relocated from Mumbai, India, to start classes in downtown Manhattan. “But the reality is, without someone to advise you on how to manage your finances in a big city like this, you’re bound to make mistakes. So, it’s going to be a learning experience, and I hope to make smarter spending choices as I go along.” 

Sharma isn’t alone in his adventure. 

The United States was the top international college destination for 48 percent of families, according to HSBC’s report in its The Value of Education series, Higher and Higher. The survey revealed that nearly one in every two international parents preferred U.S. education for their children despite it also being the most expensive, with average annual tuition fees of $33,215.

There are reasons, of course, for such preference, the main being the return on investment—i.e. job prospects—that many see in a U.S. education. The United States ranks 20th on HSBC’s 45-country “Economics League Table” featured on the global bank’s annual Expat Explorer report, which also covers career prospects.

“Students and parents consider a university education in the USA as a good investment because they have access to the largest choice of excellent colleges and universities and to the English-language skills that are so critical in today’s job market,” said Allan Goodman, President and CEO of the Institute of International Education (IIE).

The IIE’s own Open Doors study shows the number of international students enrolled in U.S. higher education increased by just over 7 percent to 1,043,839 during academic year 2015/16. It was the tenth straight year of growth in the U.S. international student population tracked by the study, which also reported an 85 percent increase in such enrollment over the decade.

“An international university education for their child is a highly desirable ambition for many parents,” Charlie Nunn, Global Head of Wealth Management at HSBC, said in the company’s Foundations for the Future report. “However, it comes at higher costs, with living expenses and air fares on top of tuition fees. Early planning and regular saving can help parents overcome these financial barriers and unlock the extra opportunities they wish for their child.”

And places like New York can be particularly expensive, with a July study by personal finance blog finding the city nearly 70 percent costlier than the U.S. national average.

For those new to the U.S., how do you ensure you have enough money to cover necessities like housing, utilities, healthcare, transportation, education, food and entertainment? How do you factor in things like the exchange rate of your home country currency versus the dollar, the cost of living in the city you’ve moved to and common expenses for U.S. students?

While financial anxieties run high, a little planning yields a budget to live on and enjoy your time as a student in the United States—without having to survive on ramen noodles.

The first step is to track every dollar spent by downloading a money manager app. Also, watch your home currency rate for fluctuations that may affect the allowances you or your parents have set. Enroll in a low-interest credit card to shop online and save money; maintain a FICO credit score of at least 680 for that card by paying bills on time and making sure credit allowances are not maxed out.

For lodging, the college dorm is often cheaper than living off campus. But if you must rent elsewhere, the millennial trend of having a roommate—or two, or three—not only offers savings but also companionship.

As for food, while it's tempting to eat out, students should take advantage of school meal plans that offer discounts on breakfast, lunch, dinner—or even a fourth meal, says Shawn Carter, money writer for

Carter also advises those with the flexibility to work to get a job. He cites the National Association of Colleges and Employers survey which shows employers pay interns $14 per hour on average. Department of Education data, meanwhile, shows the government awards a yearly average of nearly $1,400 per student for work done on campus at about 3,300 colleges.

And while entertainment is necessary to maintain a healthy work-life balance, try avoiding expensive game, concert or show tickets that run into hundreds of dollars. Sharma plans to spend his weekends at the movies, or museums and parks where the admission is free. “There’s a lot to do in New York, and I notice you can do it economically too,” he adds.

Did you know…

In countries including South Africa, university students have taken to the streets to protest tuition hikes. 

Disclosure: HSBC commissioned this article. The views and opinions expressed do not necessarily reflect the views and opinions of HSBC.