Going abroad for studies is, for many students, the first time they’re leaving home. Figuring out how to manage your finances all by yourself can be overwhelming. You have to learn how to budget your money to cover all your expenses comfortably in a foreign country.
When studying abroad, away from your usual support network, it’s important to be financially prudent. With your finances in order, you can focus on your studies and enjoy your study abroad experience.
If you’re considering studying abroad (or currently do), here are some tips to help you manage your finances:
Before you travel, make sure that you understand all the costs associated with study abroad. Other than tuition fees, your finances must cover:
- Laboratory fees
- Living expenses
- International airfare
- Local transport
- Leisure activities
- Visa fees
- Health insurance
Research and add up all the costs you’ll incur. Which expenses will be covered by financial aid? Which expenses will be covered by your student loans? Which expenses will you need your parents to cover?
The total cost of studying abroad depends on many factors including the university you’ve selected, its location, and your personal spending habits.
Proper planning will help you anticipate the expenses. It’s a great idea to include a little padding for unexpected expenses. Having a financial plan ahead of your travel will increase your confidence and ease your fears about studying abroad.
Create a Budget to Manage Your Finances
Are you in the habit of spending money without a budget? It can be a costly habit.
As an international student, it’s important to draw up a budget to help you manage your finances throughout your semester. A budget helps you determine how to allocate money for your expenses during the semester.
Your budget should clearly indicate the following items:
- Your income: How much money do you have coming from your parents, scholarships, loans, or job? Indicate the amount as income on your budget.
- Fixed expenses: What are the fixed expenses you’ll have each month or for the semester? Such expenses may include tuition fees, room and board, utility fees, airfare, and so on. Note the expenses and how much they’ll cost.
- Discretionary expenses: Aside from your fixed expenses, you’ll spend some money on more flexible expenses. For instance, you need some money for leisure activities and a few luxuries. Factoring such expenses into your budget will help you better manage your finances.
Fortunately, there are many budgeting apps that you can download to help you keep track of your money. Some of the best budgeting apps for international students include:
- Mint — free app that helps you compile all your accounts in one place.
- Wally — functions similarly to Mint. The only difference is that you’ll have to manually record your transactions.
- Rakuten —helps you earn some cash back for online transactions
- Digit — automatically connects to your account and saves small amounts each day
Save Your Money
Even as a student, you need to start saving money for a rainy day. Financial emergencies, such as having to replace a broken laptop, can be devastating if you don’t have some money saved up.
Other than covering emergencies, saving can also help you attain your goals. For instance, you may be able to buy a car, pay for a vacation, or even start a business.
It’s a good idea to open a savings account, which earns interest to help you grow your money. Putting away some money every month will add up to a significant amount over time.
Make sure to include savings on your budget. Use a budgeting that’s designed to promote saving – such as Digit.
Use Credit Cards Wisely
It’s easy to fall into the trap of spending money you don’t have—especially with access to credit cards. Don’t forget that credit cards are not free money. You’ll have to pay for every penny spent – plus interest and fees.
Student credit cards usually charge high interest rates—as high as 20% or higher. They also have low credit limits – which means they might not help you cover big financial emergencies.
Should you avoid credit cards altogether? No, it’s beneficial for international students to have credit cards. A credit card not only helps you cover emergency expenses, but it also helps you start building credit abroad.
Make Smart Spending Choices
Buying Starbucks coffee daily can add up and eat into your budget. As an international student, it’s important to make smart spending choices.
Here are some tips to help you spend less and save more:
- Use the library: Books and course materials can be quite expensive. However, you don’t have to buy all the books required for your studies. Instead, borrow the books you need from the university library. If the university library falls short, check off-campus and online libraries.
- Consider private off-campus accommodation: Private off-campus accommodation can be cheaper than university housing. With roommates, you can easily cut your housing budget in half. Explore the private off-campus housing options and crunch some numbers to make the best financial decision.
- Cook your meals: Eating out is expensive. Learn how to make healthy, affordable meals at home. Your pocket and your body will be healthier for this.
- Pay your bills on time: Late bill payment can lead to fines. You should avoid incurring such unnecessary expenses while you’re studying abroad. If you don’t trust yourself to remember and pay all your bills in time, use an app such as BillTracker.
Look for student discounts: Use your student card to claim student discounts wherever possible in restaurants, movie theatres, cultural events, shops, and for public transportation.
Look for Work While Studying Abroad
In most countries in the West, international students are legally allowed to work for about 20 hours a week. Check whether your visa allows you to work while studying and for how many hours.
Finding a part-time job while studying will help you cover some costs, save for the future, and even remit some money to your family back home. In addition, you’ll start building your skills and network to launch your career after graduation.
Note that you might have to pay taxes on your income. Check what the tax regulations of your country of study are for international students’ income and comply.
Armed with the information above, you’re now better-equipped to manage your finances as an international student. Learning how to manage your money is a great skill that will serve you well while studying abroad and beyond.
Do you want to learn more about studying abroad and exploring new scholarship opportunities?