Studying abroad is an exciting experience for a student. Along with studying with international students and earning a globally recognised degree, a student also gets exposure to other cultures and their living standards. However, staying away from home may demand financial responsibilities. In the lack of appropriate money management, students may struggle with their survival and basic needs such as food, rent, and daily commute.
For every student, money management is a crucial skill to ensure smooth survival in any country. Moving abroad for further studies can be exciting, but it also comes with the challenge of managing money. In the absence of financial management, students may experience stress and unnecessary debt.
To help every international student, here are 7 money management skills. This blog helps you learn essential money management skills and make the most of your journey abroad.
Must-Have 7 Money Management Skills for Students
Create a monthly budget.
Ensuring smooth money management requires the appropriate management of monthly cash flow. It doesn’t require any expertise beyond basic management. How can you create a budget as an international student? Follow the basic rule:
- 50%: Allot 50% of the money for your living expenses such as rent, groceries, maintenance, utilities, and other daily needs.
- 30%: Budget 30% of the money for flexible spending, such as travel, shopping, dining, and other fun activities.
- 20%: Leave 20% for your financial goals such as debt, savings, and investments.
Use Google Docs and Excel spreadsheets to create a budget and analyse the money spent on the given criteria.
Open An Account At The Right Bank
Banks are mostly keen to gain more international student accounts and thus may offer certain benefits or discounts to open an account in their bank. While choosing a bank to open an account with, check for their reputation, ease of online banking, and the interest offered.
Additionally, a few banks may also offer discounts or cashbacks when shopping from specific stores, so make sure you make the most of it. By using contactless payment services, it becomes easy to pay for things, but don’t forget to keep track of your spending. Wherever you spend, try not to go beyond the allotted budget. You can consider the following factors while considering a bank to open an account with:
- Understand your needs, such as bill payment, cash withdrawal, receiving salary, etc.
- Compare fees and interest: Before opening an account in any bank, check for their monthly or annual fees, overdraft charges, and interest rates. You can leverage comparison websites such as Go Compare, Money Saving Expert, and others.
- Accessibility and convenience offered by banks online and offline.
- Eligibility and documents: Banks ask for proof of identity, such as a driving licence, passport, or biometric residence Keeping the documents ready beforehand will smooth the process for you.
Leverage Student Discounts
Being an international student comes with a lot of benefits and exclusive discounts, so secure your student ID card with you at all times. The discounts may not appear to be huge in the beginning, but it becomes an important number by the end of the year.
Movie theatres, restaurants, shopping centres, or insurance providers are some of the places that provide a student discount. Having a keen eye can also help you get cheaper flight tickets, and you can enjoy many such discounts here and there.
Find A Part-Time Job
If you are an international student, you may not have enough time to work full-time or off-campus, as many universities may not allow that. Still, you can choose to work on-campus following certain limitations.
Also, know that there are work-hour restrictions in other countries, such as 20 hours per week or so, to not affect the international student’s visa status. With efficient time management, you can easily manage 20 hours of work every week. During breaks, you can also opt to work full-time for up to 40 hours a week.
These jobs can be a great way to have a side income and a platform to make new friends.
Avoid Unnecessary Expenses
Avoiding extra expenses and impulsive buying can be an effective money management skill. Buying things impromptu can affect your financial management and restrain you from saving money. In the long run, learning to avoid unnecessary expenses will make you learn how to save money rather than spending it on a whim.
Another pro tip that can help you is to carefully consider the subscriptions that are not a necessity. Whether it is a Netflix subscription or a phone plan, try finding a cost-effective plan that fits your needs as well as your budget.
Record Every Transaction
As abroad students, we often forget to track our expenses, and that leads to financial mismanagement. This can become a challenge when missed often. Create a sheet or record all the transactions on your phone; this will help you understand what areas you are spending the most on and need to have control over. This will also give you an overview of altering or transferring the budget based on requirements.
Start Saving and Investing
Decide your financial goals on the basis of a timeline. Divide it into short-term, mid-term, long-term, and emergency funds. This will assist you in allocating resources based on your needs, such as a property down payment, buying a vehicle, or any emergency issue, such as an accident or health crisis. By planning, you can overcome difficulties that could have affected your future and even your present.
Contact a finance advisor if you feel muddled about savings and investments. Saving is crucial when you start a job; it may look like a challenge, but slowly it becomes a habit and turns into a huge amount. This amount can later be used when needed.
Final Thoughts
Money management isn’t about being perfect with MS Excel or Google Docs but about developing a few habits early before bad patterns take over. Money management skills for every international student begin with a real budget, not too delusional and not too underperforming, just based on real numbers and needs. Open an account and don’t hesitate to ask your university’s international student office for help.
Being an international student, money management may not be easy during the initial days, but once you get it into your habit, it offers long-term financial stability.
Bonus Tip: Keep an Eye On Currency Exchange Rates
If your family sends you your monthly expenses, don’t feel overwhelmed, as traditional banks often hide the exchange rates and quietly deduct them from your account. Keep an eye on the deducted costs and ask for clarification if something doesn’t add up.
Before you transfer money, compare your bank’s exchange rates with those of other banks.
FAQs
Money management means managing your finances. International students need to have skills such as budgeting, setting financial goals, recording expenses, and saving.
No, students don’t have to pursue any special course or certification. They only need to keep a watch on their spending and stay organised.
Staying abroad can be challenging when talked about money management skills. It helps students have balanced transactions and saves them from stressing, while also allowing them to focus on studies.
You can start by listing your monthly expenses and categorizing them into fixed expenses (rent, food, electricity), flexible spending (shopping, travel, etc.), and financial goals (short-, mid-, and long-term). Allocating a specific percentage of your monthly budget to these categories will help students stay financially organized.
