Budgeting for International Students
One of the most important aspects of studying overseas is budgeting. It is important for students to be aware of their finances and spending habits, and this becomes even more important when the students are far away from home and their usual support system. Use the following tips to keep on top of your budgeting needs.
Creating a Budget
The first step in creating a budget is to sit down and map out both your income and expenses. First identify all your sources of income, including scholarships, loans, money from your parents or summer jobs, and savings. Next you will have to calculate your expenses. Make a list of all your fixed costs, such as tuition, rent, utilities, and phone bills, and when they'll come due. Then factor in infrequent expenses, such as books and course materials. Finally you'll have to consider your regular expenses, such as food and entertainment. It is generally a good idea to keep track of all your expenses for two to four weeks using a student budgeting worksheet or a program like Excel.
After you've calculated all the necessary information, it's time to compare your income and expenses. Add up your total income and subtract your total expenses. Obviously, your expenses shouldn't exceed your income. If they do, look for ways to cut back. Find unnecessary expenses that you can live without, such as eating out and buying new textbooks, and try to cut those down as much as possible.
Needs vs. Wants
Expenses can be broken down into two groups: needs and wants. Things like utility bills, rent, tuition, and food are needs that you cannot avoid. You'll need to factor those things into your budget first. Then you can determine which of your “wants” expenses you can afford to keep and which have to go. Chances are, once you realize how much you're spending on needs, you'll be less tempted to spend money on wants.
It's important not to deprive yourself completely. Students who are all work and no play will burn out quickly. Try to set aside some money each month for something fun, like nights out with friends or bigger excursions. Particularly if you are studying in a new country, you'll want to have the resources to go out and explore, or for souvenirs.
It is always important to expect the unexpected. Try to set aside some “just in case” money, to be used for emergencies. Things like car or computer repairs can crop up unexpectedly, and it's always good to have some money laid by just in case. If you don't use it, that just means more savings that you can use later.
There are several things you can do to cut back on your expenses. Try following these tips to help keep you under budget each month:
- Take advantage of free or discounted events and goods. As a student, you will have plenty of access to free or discounted food, shows, and entertainment. Whether it's a student discount at a movie theatre, or a school event that provides free pizza, there are plenty of “freebies” that you can take advantage of if you just keep your eyes open.
- Try renting textbooks instead of buying them. It's cheaper and you may be able to find coupons for free shipping.
- Split expenses with your roommate. Talk before you move in about who will be bringing what, and come to an agreement regarding food and shopping.
- Plan your meals around what coupons you can find. You don't want to miss out on a fantastic deal just because the item didn't happen to be on this week's grocery list.
Budgeting can be an intimidating process, but if you keep on top of all your expenses and regularly assess your spending habits, you’ll find that it’s easier than you might expect.