While studying in a foreign country, one of the challenges faced by students is with regard to managing their day-to-day and monthly expenses. Unlike being at home, most students who go abroad for higher studies do not have their parents or relatives to advise them on what and where to spend money. Therefore, keeping this in mind, Student Cover, in this blog, tries to provide its readers with certain tips and guidelines that would help them manage expenses while studying abroad. They are as follow:
1. Measure your expenses – The first step towards solving a problem is identifying it properly. The same applies with budgeting. If you can count it, you can control it. A student has to spend on a number of things such as food, clothes, room rent, travel, mobile & power charges, books and stationery etc. every month. Some of these expenses are essential as well as recurring in nature while others are not. Measuring the cost not only helps one get a fair idea about how one needs to spend in a month, but also find ways to save money.
2. Set budgetary Limits – Just like the government which sets spending and saving limits, an individual too must set a spending limit at the start of every month. One should outline the things that he or she is going to spend on, set aside the amount to be spent, and ensure that he or she does not end up spending more than that. Another good thing about having a monthly limit is that in case one ends up spending more on one of the items, he or she can cut down expenditure on the other to make up for excess expenditure.
3. Explore cheaper alternatives – One of the easiest ways to save money is to explore the cheaper alternative for products. Buying cheap, it doesn’t always mean buying low quality products. Following are the steps to be taken for specific things:
a. Clothes – One can get the same product at a lower price from a discount store, online sale or
if purchased in bulk. There are a number of online stores that specifically sell clothes at discounted rates to students.
b. Books – All books need not to be bought afresh. These can be borrowed or bought second
hand from seniors or from shopping websites. One can also borrow books from library to meet their requirements.
c. Gadgets & Equipment – Various websites such as Ebay let people sell their used gadgets to new customers. Students can make use of such opportunities to buy products at lower price. They can also make use of various end of season sales for that purpose.
d. Daily utilities – Those items that come in day-to-day use cost lesser if purchased in bulk from discount marts and during discount sales.
The real trick lies in identifying such opportunities to save money. This applies equally to eating out and travelling options. Wherever possible, try to find those eating joints or modes of travel that cost less.
4. Borrow the required amount – Those students who take education loan to pursue higher education often make the mistake of asking the lending institution to disburse the entire sanctioned amount to their account in one go. One should understand that such institutions do not charge interest when the loan is sanctioned but start charging interest only when they are disbursed. Hence, there is no need for the student to have money in his or her account to pay the tuition fees for 2nd or 3rd year in the first year itself. This will lead to piling up of interest on the loan for 3 years.
5. Manage your lifestyle – How much one spends in a month depends on the kind of life that one leads. Being a miser is not advisable but so is spendthrift. There are times when one might have to spend money while being in a group, such as going to movies, pubs etc. However, one should earmark that such expenses in advance and not indulge in overspending. One way of controlling the expenses by identifying those expenditures that are essential and those that are not. The non-essential expenditures can always be delayed or postponed till the time one has enough savings.
6. Get insured – The cost of healthcare in countries like the US are very high. A health insurance is not only advisable but also mandatory for international students who go to the US for higher studies. However, most students focus more on saving money in the cost of premium than on the cost of treatment. A cheap health plan may cost less but it might offer limited coverage and higher out-of-pocket expenditure. It is therefore essential for students to purchase those plans which offer higher coverage at reasonable cost and have very low out-of-pocket expenses.
For example, Student Cover’s Elite insurance plan for students provides unlimited coverage at under $1,400 per year, has deductible of just $100 and co-insurance coverage of 90% of medical bill. Besides that, its out-of-pocket maximum limit is just $3,000.
In addition to health insurance, students should also purchase travel insurance while traveling and get their items such as laptops, mobile phones etc. secured through an appropriate property insurance plan.
7. Save for the rainy day – As mentioned earlier, regular spending should only be made on essential items and delay in non-essential spending. This will lead to a situation you have a contingency fund for to be used in emergency situations like requirement of an immediate medical attention or unforeseeable but essential spending. These expenses, at times, might run into thousands of dollars. Therefore, every month, one should set aside knowingly or otherwise a few hundred dollars for emergency expenses.
8. Follow rules, obey the law – Unlike many third world countries, first world countries take the rule of law very seriously. Violating rules or law could lead to heavy penalties or even a jail term. It is therefore essential for a student to get acquainted with the law of the land and not indulge in acts that could invite financial penalty. A heavy fine could wreck one’s monthly or even annual budget plan.
9. Don’t keep too much cash in hand – Now a days, cash or credit cards are accepted almost everywhere. Therefore, one need not carry a lot of cash to pay for day to day expenses. However, this also doesn’t mean that one should solely rely on cards for payments. There might be times when one might need to dole out cash for making certain types of payments. Therefore, one is advised not to carry more than say $50 or $100 in his or her wallet. With large sums of money, one also faces the additional risk of getting mugged or robbed in the streets.
10. Get things from home country – Often, the cost of certain items such as laptops, books and even clothes in one’s home country is much lower than the same purchased in the US. One can save a lot of money by purchasing them in their home country than buying them in the US. However, before one rushes to the store, one should check the prices in the US, compare them with the price in their home country and then take the purchase decision.
Let’s Wrap Up!
Managing expenses requires proper planning and execution. For that one has to first measure his or her expenses, prepare a monthly or weekly budget and stick to it. One can also save money by looking for cheaper alternative options for anything that he or she buys. It is also advised that students should follow a simple lifestyle and not overspend. Getting insured and setting aside money to meet emergency needs also helps a student to manage expenses.
Disclaimer: The content of the blog is based on personal research of the write. Readers’ discretion is advised. Neither Student Cover nor the write will be held responsible for any wrongful interpretation of the content of this blog.