54% of Indonesian Students Studying or Planning to Study Abroad Are Anxious About Finances, Wise Survey Finds

JAKARTA, October 19, 2024 – A new survey by Wise, a global technology company building the best way to move and manage money internationally, found that many Indonesian students are unprepared for the financial challenges of studying abroad. Over half of the respondents (54%) feel anxious or very anxious about managing finances overseas,  according to the survey.

The survey, conducted in collaboration with education consultant NIEC Indonesia, polled over 200 Indonesian students—both current and prospective international students—to understand their financial management skills, financial concerns on studying abroad, and knowledge of hidden fees in international payments. The findings were unveiled at the “Money Matters: Managing Finances for a Successful Study Abroad” talk show, held during the World Education Festival on October 19, 2024.

Lack of Financial Preparedness Contribute to Challenges
The survey highlights a significant gap in students’ financial preparedness for life overseas. More than half (55%) of respondents who plan to study abroad rely on others - typically parents or guardians - to manage their finances. For many, studying abroad will mark their first time managing money independently, leading to increased anxiety about the transition.

Moreover, 25% of respondents reported frequent discrepancies between their planned budgets and actual spending. This issue is even more pronounced among students who are already abroad, with 67% encountering budgeting discrepancies, underscoring the challenges in money management overseas. 

The reality of managing finances abroad is more difficult than expected

The survey reveals a clear gap between students’ expectations and the reality of budgeting abroad. Only 29% of respondents planning to study abroad believe it is difficult or very difficult to budget for living expenses in a foreign country. However, this figure jumped to 53% among respondents who are already studying overseas. Budgeting for daily expenses (62%) emerged as a key challenge, followed by saving money (53%), managing unexpected costs (40%), and covering rent and utilities (22%). These findings suggest that the financial demands of studying abroad are often tougher than students initially expect.

Awareness of hidden fees in international payments falls short

Managing international money transfers is another major hurdle for students abroad. The survey found that 57% of respondents still use traditional platforms, such as domestic banks, to send and receive money abroad, putting them at risk of incurring higher transaction fees. Additionally, these transfers often take between 3-5 days to arrive, which can be devastating for students relying on frequent transfers from Indonesia to support their lives abroad. 

With 50% of respondents unaware of additional costs associated with international transactions, such as exchange rate markups, there is a pressing need for better financial education to help both parents and students make informed decisions about international payments.

Zahid Ibrahim, a YouTuber and student at Ritsumeikan Asia Pacific University, shared his experience, “Before moving abroad, I budgeted for tuition, accommodation, and daily needs, but when I arrived in Japan, I was still shocked by the higher cost of living. I even hesitated to get my haircut at one point. There were so many other unexpected expenses like additional school supplies. Also, my parents and I initially faced high fees and unpredictable exchange rates when sending money from Indonesia to Japan. The amount we received was often less than what was sent, which was frustrating and threw off my budgeting.”

He added, “I discovered Wise soon after I moved to Japan through friends and Google. Now, whenever I send or receive money from abroad, the funds arrive almost instantly, and we know exactly how much money we are receiving because Wise shows the cost upfront and doesn't markup the exchange rate. It has made managing finances much easier.” 

Financial tips for Indonesian students studying abroad 

Lack of financial preparation can affect the well-being and academic success of Indonesian students studying abroad. Elian Ciptono, Head of Southeast Asia Expansion and Country Manager of Wise Indonesia, and Zahid shared tips to help Indonesian students manage their finances while studying abroad.

1. Take Charge of Your Finances Before Studying Abroad: Before heading overseas, start managing their own finances by tracking expenses and distinguishing between needs and wants. Seek advice from financially experienced family members, friends, or mentors. Additionally, students can use free online resources like Khan Academy to build financial literacy, and download budgeting apps to manage their expenses effectively.  
2. Plan your budget in the local currency: When studying abroad, plan your budget in the local currency of your host country, even if you receive money in Indonesian Rupiah (IDR). This approach allows you to accurately reflect the actual cost of living and track expenses like tuition, housing, food, and transportation. Plan your overseas transfers or convert your IDR into the local currency when exchange rates are favourable, to make smarter spending decisions during your time abroad.
3. Choose The Right Money Transfer Platform: Traditional money transfer services often take 3-5 business days, and tend to charge high transfer fees and inflated exchange rates. Use platforms like Wise, which allows users to send money quickly and affordably to over 70 countries at the mid-market exchange rate, with a transparent, upfront fee.
4. Set up an Emergency Fund: Unexpected situations, such as medical emergencies or housing changes, can arise while studying abroad. Having a dedicated emergency fund covering 3-6 months of living expenses can help students avoid making impulsive financial decisions, like taking on debt. Starting with a smaller amount and gradually building up can also be a practical strategy
5. Connect with Students Already Abroad: Seek advice from fellow Indonesian students studying abroad to learn about specific expenses like security deposits, health insurance and daily living costs. Indonesian student associations are a good way to start building these connections. 
   

Elian Ciptono said, “As Indonesian students embark on their educational journeys around the globe, mastering financial management is crucial. By enhancing financial literacy and making informed decisions, students can concentrate on what truly matters—embracing their international experiences and achieving their academic goals.”

Methodology 

The survey, conducted by Wise and NIEC, took place from 30 August to 9 October 2024. NIEC surveyed a total of 216 Indonesian students, who are already studying abroad or planning to further their studies. 

About the World Education Festival (WEF)

The World Education Festival is an annual education fair organised by NIEC Indonesia, offering Indonesian students the opportunity for exclusive consultations with various universities abroad. This year, WEF is held in six cities: Medan, Jakarta, Surabaya, Bali, Yogyakarta, and Makassar.

At the Jakarta edition of the 2024 World Education Festival (19/10), Wise hosted a talk show titled “Money Matters: Managing Finances for a Successful Study Abroad”. The talk show featured Elian Ciptono, Head of Southeast Expansion and Indonesia Country Manager at Wise, and Zahid Ibrahim, YouTuber, Podcaster, and student at Ritsumeikan Asia Pacific University, as speakers. The talk show was attended by Indonesian students planning to study abroad and their parents, aiming to educate and assist students in preparing to manage their finances while studying abroad.