Studying abroad can offer you independence. However, with independence come responsibilities – managing your own finances is one of them. Living as a student, on our own and in a foreign country, means that we have to be prudent about our incomes and spending, especially when we don’t have a lot of room to wiggle. To help you do so, contributor Laurensia Saraswati, who graduated from the University of Warwick, UK, will share some tips on how to best manage and make the most out of your money while being a student abroad.
Managing scholarship money can be stressful sometimes, as this money might be the only financial resource you have while abroad. At the same time, you might have wants and desires to make the best out of your time there, especially for graduate students in countries like the UK where you only have one year to spend. This situation could affect your decision-making processes and distort your financial priorities, such that you could end up overspend!
Various factors influence your money management strategy, such as the amount of stipend you receive versus your wants, needs, and unique circumstances. Everyone has a different situation and while my strategy might not be fully applicable to yours, I do have some general tips that I believe could help you from overspending.
1. Know your goals
Basic management 101: before deciding the “how” in managing your money, you need to know the “what”. What is your goal during your time abroad? What are the things that you want to do? In my case, I mainly wanted to travel – both within and outside UK – and find a job after graduation. Therefore, I knew that I needed enough money to realize my travel plans and to support myself during the job-hunting period post-graduation.
I then made a rough calculation of how much money I should have in order to reach those goals. I took into account and tried to balance my travel plan, i.e. the places that I wanted to visit, with how much living expenses I would incur.
2. Know your cashflow
The majority of students receive their stipend or scholarship money every month (although not always). When you have a fixed scheduled for your income stream, it will be easier for you to manage it. In my case, for example, I received my stipend once a month during the one-year term time, so it kept my cashflow steady and helped me manage my expenses accordingly. However, this changed after graduation when I had to finance myself while looking for jobs.
3. Design your strategy
My parents have always taught me to appreciate what we earn and to spend it wisely, so I have grown into becoming an avid money planner. During my time in the UK, I was committed to saving every month, so I allocated my stipend as follows: 40% for bills, 30% for the stuff I wanted, 10% for travel, and 20% for savings.
I chose to live in an off-campus residence, which was definitely cheaper but also still quite close to campus (20-30-minute walk). So apart from saving on rent, I also saved a lot on transportation! If you don’t prefer walking, you could try biking instead, which in the longer run could also save you some coins.
Important note: as mentioned earlier, each student has their own set of circumstances, so the ratio above might not work for you. Therefore, carefully decide on the ratio based on your current situation. For example, if you study in London, it will be really hard to allocate 40% for the rent and bills, so perhaps you’ll need to adjust your savings ratio. Don’t be too hard on yourself and don’t forget that you should still aim to live comfortably.
4. Use digital platforms
If you think that you have overspent and need help to control it, you can use a digital or challenger bank, such as Monzo, Monese, Revolut, etc, which are quite popular in the UK. These banks allow you to set budget for each type of expenses, arrange locked “pots” (pot is a place to save your money), and set direct debit for your savings. Controlling and saving money becomes easier with these features.
Now, as you are devising your strategy based on the above points, you can try some of the handful tips below to save (and gain) extra money:
- Leverage your student status
Being a student gives you a lot of perks, including student discounts. Many retailers in the UK offer these – all you need to do is ask. Even better, the UK has something called UNiDAYS, a discount website for university students that offers abundant deals on products and services, which would help you save extra pennies. It’s free to sign up as well!
2. Get on the loyalty/membership card train
Another pro tip would be to get loyalty cards. I had a bunch of these that really helped me save while in the UK, such as the student rail card that gives you 30% off on train tickets and the National Express young person card that slashes 20% off of your bus fares. In Coventry, UK, you can even get discount if you travel after 6pm and in group by bus.
3. Shop at cheap groceries
My advice: buy your food in the groceries rather than minimarkets. In the UK, Aldi and Asda are two grocery stores that offer the best price. Buy a bigger size for things that you will use frequently, such as shampoo, bath soap, and oil, since it will be cheaper for you. Frozen veggies and meat are always cheaper than fresh ones, but please don’t always rely on these. Mix them with fresh ingredients. If you’re lucky, you could have half-price meat from pieces that will expire on the same day.
4. Earn extra money
While studying, it’s a good idea to broaden your experience with work and earn extra cash. In the UK, there are a lot of websites that you can visit to discover part-time casual or formal jobs, such as Unitemps, Amazon, and Syft. I used to work part-time in the UK and it helped me cover my travel budget. While it is doable to do part-time jobs in the UK, don’t forget that you still need to prioritize your study.
So there you have it, my practical tips on how to manage your finances while studying abroad. Hope you find this useful!
A version of this article has been published on the author’s personal blog https://laurensiairma.wordpress.com/