Managing Money, Managing Life

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Take steps to better personal financial management!

Money management is often a subject left forgotten when it comes to discussions about student life abroad. This is quite unfortunate, given the value of money management in helping us survive and thrive while being away from our safety net at home, and also in realizing our broader life goals. In this article, our columnist, Salim, reflects on proper money management as a key takeaway from his experience studying abroad in Brisbane which he continues to apply in his daily life in Indonesia. 

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“What kind of luxury could I enjoy here in Brisbane?” Haris, a close friend of mine, jokingly asked when I visited his house for an afternoon chit-chat. Then, we were both students at the University of Queensland – I was pursuing my Master’s, while he was undertaking his PhD studies. I responded with a laugh as I knew exactly his circumstances. I witnessed firsthand how he and his family struggled financially in the Down Under.

The Value of Money Management as an Overseas Student

This was not always the case with Haris. Back home in Indonesia, he was part of the growing middle-class and thriving young professionals. He could afford a mid-sized home in the South of Jakarta and a decent car. He also had a good career. He worked as a researcher at a government ministry, actively involved in the formulation of various policies. Further, his wife had a good and promising career at a large corporation.

Haris taught me an important lesson that taking a PhD (and also Master) overseas means leaving your comfort zone for a few years, including your financial safety net in Indonesia. While studying at UQ under a sponsorship, he, alongside his wife and children, could only afford to live in this simple, affordable Queenslander-style house in St Lucia. He bought a car, but only an old, used one. Haris even worked as a part-time cleaner at the St Lucia campus to generate additional income.

Yet, despite their difficulties, Haris and his family members always showed resilience and never complained. It seemed that Haris had prepared himself and his family well for a totally different lifestyle in the Queensland capital. He managed his personal and family finances carefully – overspending was a ‘big no’. They also managed to control their impulses and not live a lifestyle beyond what they could afford.

Managing Money in Australia as an International Student (Photo credit: Photo credit: https://www.halofinancial.com/news/technical-research/aud/2017/november)
Managing Money in Australia as an International Student (Photo credit: https://www.halofinancial.com/news/technical-research/aud/2017/november)

Although we were both studying in Brisbane at the time, things were a bit different for me as I was still single. I could dine out several times a week and travel to various places in both Australia and New Zealand. I somehow also always have sufficient money to save at the end of each month. But then again, I think this was not only because I was single at the time, but because I continuously reminded myself to refrain from being a careless spender. To prevent myself from getting off track, I always envision my post-graduation plans which would require a significant sum of money. I wanted to find my better half and get married. I wanted to have my own house and car. Et cetera.

As a scholarship awardee, I once thought that self-funded Indonesian students need not manage their finances as hard as myself or other scholarship awardees. I was wrong. I saw with my own eyes how Arif, one of my flatmates who was self-funded, meticulously planned his finances to survive in Brisbane. In Jakarta, he was able to dine out anytime in any restaurant, drive the car bought by his parents, and join expensive fitness clubs. Meanwhile, in Brisbane, he cooked his meals, used public transports, and bought fitness equipments in garage sales. He had to and ultimately managed to adjust his lifestyle as a student in Brisbane.

Money Management as a Takeaway Lesson

My personal financial management experiences as a student abroad became a key takeaway lesson when I returned to Indonesia for good. Upon graduating UQ, I re-entered the professional world and tied the knot with the girl of my dreams. With proper financial management, in our second year of marriage, we could buy a house in the outskirts of Jakarta.

To be sure, I am still a long way from being the “ideal personal financial manager”. I also admit that my lifestyle becomes more buoyant as my income increases. That said, I always try to stick to the financial plan I make at every start of the month. In addition to daily expenses, I also allocate parts of my income for debt repayment, mortgage, charity, savings, and other necessary posts. More importantly, I also made several investments, life and health insurances, and retirement planning.

I do realize that many things, especially if we live in large cities, might stimulate our impulsive spending behavior. Malls, shopping centers, fancy restaurants, and instagrammable cafés are usually within close proximity from where we live and work. Promotional tickets and low-cost airlines are also always at an arm’s reach to travel to exotic places.

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Managing money amidst temptations to splurge on expensive meals and entertainment around us
Managing money amidst temptations to splurge on expensive meals and entertainment

Yes, we need entertainment, fun, and vacation to compensate our hard work. Nevertheless, they should not hinder us from managing our personal finances and reaching our financial goals.

“Can you make savings from your monthly salary?” Bagus, a colleague of mine, once asked his millennial team members. Some of them replied, “No.” Being a ‘xennial’ (between Gen-Xes and millennials), I have had a lot of opportunities to interact with millennials and observe their behavior. I know millennials love new experiences and social-media sharing, but this may trap them in expensive lifestyles and excessive consumerism. Are you overspending? Have you planned your finances well for the years to come? Everyone has the full right to spend their own money according to their preferences. However, it is quite scary to imagine a life without any budget plan, savings, or emergency funds. They are also important to consider if you are planning on taking a few years off professional work to pursue your studies abroad.

Unfortunately, as of date, I sense that Indonesians’ enthusiasm to learn and practice money management is still low. I once visited a mutual funds fair held in a building in Jakarta’s CBD. Many interesting promotions and financial products from fund managers being sold, but the venue was relatively quiet. My colleague commented, “It’s not crowded since it sells investment products. If this was a gadget fair, I bet many people would come!” I could not agree more with him. Having a portfolio investment has yet to become a priority for many Indonesians despite its importance and benefits.

When I lived in Brisbane, I often find Australian authorities undertaking various efforts to promote financial literacy and planning among Australians. This was not the case in Indonesia when I first returned home. However, things have improved now. Indonesia Financial Services Authority (OJK), for example, now publishes practical money management tips on their website and conduct events to promote financial literacy and planning. You can find other online sources too on the subject – visit blogs and social media accounts on the subject, especially those belonging to professional financial planners.

In short, my life in Brisbane taught me the value of good personal financial management, something I continue to apply in my own life now as a professional in Indonesia. This is important for everyone, including millennials and other generations, in their endeavors to live life to the fullest. When you are successful in managing your finances and controlling your impulsive spending, you could expect to achieve your goals and dreams, even beyond financial survival as a student abroad.

Take steps to better personal financial management!
Take steps to better personal financial management!

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Photo credits: halofinancial and Cazadira Fediva Tamzil