Planning to study abroad? Here are seven effective financial budgeting secrets

New Delhi: Engaging in studies abroad presents a genuinely enriching experience that expands students' academic horizons, and nurtures independence, resilience, and cross-cultural sensitivity. Moreover, it unlocks access to a wide-ranging global network of connections and enhances career opportunities through the showcase of adaptability and a global mindset.

In 2022, the count of Indian students seeking higher education abroad reached a six-year pinnacle, with over 7.7 lakhs embarking on their educational journeys overseas. This upsurge in opportunities brings forth new challenges, necessitating students to be well-prepared in embracing and efficiently managing multiple responsibilities.

Studying abroad entails grappling with various responsibilities such as navigating new currency systems, grasping the local cost of living, and adjusting to different spending patterns. While these challenges may seem daunting, they offer a valuable opportunity for students to hone their financial management skills. By mastering effective budgeting techniques and making informed decisions regarding expenses, students can cultivate financial prudence, laying a strong foundation for future success.

Here are some helpful budgeting strategies that can empower students to confidently navigate the financial trajectory of their study abroad journey.

Work on a realistic budget

To formulate a budget, students should start by identifying their sources of income, which may include earnings from part-time jobs, financial support from family and friends, or scholarships. Once they have a clear understanding of their incoming funds, they can proceed to estimate their various expenses, encompassing items like tuition fees, accommodation, food, travel, transportation, books, and personal expenditures.

To create a practical budget, it is vital for students to be realistic about their expenses. This entails considering the cost of living in the country they intend to study in and accounting for potential unforeseen costs. Armed with a comprehensive picture of both their income and expenses, students can develop a well-structured budget that will assist them in maintaining financial discipline and staying on track throughout their academic journey abroad.

Here are some valuable tips to adhere to your budget while studying abroad:

Keep track of your spending: Regularly monitor your expenses to understand where your money is going and make necessary adjustments. This will provide insight into where your money is being utilized and enable you to make necessary adjustments when required.

Set clear financial goals: Define your financial objectives during your study abroad journey, as having specific goals will help you remain focused and disciplined. Knowing what you want to achieve financially will serve as a guiding path to keep you on track.

Practice mindful spending: While being in a new and exciting place, it's easy to overspend. Stay conscious of your expenditures and stick to your budget.

In addition to the above, consider these budgeting strategies:

Make the most of student discounts: Many businesses offer discounts for students, so inquire about them whenever you shop or dine out.

Cook meals at home: Eating out can be expensive, so preparing your meals at home is a cost-effective way to save money.

Opt for public transportation: Public transport is a more budget-friendly option for getting around compared to taxis or ride-hailing services.

Stay flexible: Be prepared for unexpected situations and be willing to adjust your budget accordingly.

Exercise mindfulness in your spending habits: Being in a novel and thrilling environment may tempt you to overspend, so it's crucial to stay mindful of your expenses and adhere to your budget.

Always be prepared for unexpected expenses: Whether it's going out with friends or embarking on short trips, having a portion of your budget dedicated to these occasions will help you navigate such situations smoothly.

Budgeting can be a challenging task, but it is crucial for students who wish to study abroad without accumulating debt. By following these tips and strategies, students can create a well-structured budget that will help them manage their finances effectively and fully enjoy their study abroad experience.

Allocating a sensible amount of money to each category and diligently monitoring your spending are vital aspects of budgeting. Additionally, it is essential to prepare for unforeseen expenses, like social outings with friends or impromptu short trips. Being prepared for these situations will help you maintain financial stability and avoid any financial surprises along the way.

Having a bank account abroad

Having a local bank account in the country where you are studying abroad offers several advantages when it comes to managing your finances. Here are some benefits of having a local bank account:

Convenience: A local bank account provides greater convenience in accessing your money. You can use a debit card for purchases and withdraw cash from ATMs easily.

Security: Your money is more secure in a local bank account, as it falls under the regulations of the country you are studying in, which may offer stronger protection than your home country's regulations.

Access to banking services: Having a local bank account grants you access to various banking services available in the country, including online banking, mobile banking, and bill payments.

Avoiding foreign transaction fees: By using a local bank account, you can avoid foreign transaction fees that might be incurred when using your overseas bank card.

If you are considering opening a bank account in the country you are studying abroad, here are some things to keep in mind:

Research different banks: Conduct thorough research on various banks in the country to compare fees, services, and features. This will help you find the one that best suits your needs.

Check the requirements: Different banks have varying requirements for opening an account. Some may require a local address, while others might have a minimum balance requirement.

Prepare documentation: To open a bank account, you will need to provide necessary documents such as your passport, visa, and proof of address.

Opening a local bank account during your study abroad journey can greatly assist in managing your finances and simplifying your life. By following these tips and choosing the right bank, you can open an account that aligns perfectly with your requirements.

Work on a proper savings plan

Warren Buffett once shared invaluable advice, “Do not save what is left after spending but spend what is left after saving”. This wisdom holds particular significance for students studying abroad.

When studying in a foreign country, it becomes crucial to prioritize saving money. Not only does this help in handling unexpected expenses, but it also aids in repaying educational loans after graduation.

Numerous methods exist to save money while studying abroad. You can consider getting a part-time job, preparing meals at home instead of dining out, and taking advantage of student discounts.

Moreover, practising mindfulness in your spending habits is essential. This entails keeping track of expenses and ensuring that you do not overspend.

Accumulating savings during your study abroad period puts you in a favourable position upon graduation. Having funds to cover unforeseen costs and repaying education loans promptly becomes attainable.

It's important to recognize that innovative savings and income plans are not solely the responsibility of parents; students must actively participate too. By spending and saving wisely, students can ensure timely repayment of education loans.

Here are some additional money-saving tips for your study abroad journey:

• Set a budget and adhere to it.
• Keep track of your expenses.
• Exercise mindfulness in your spending.
• Consider part-time job opportunities.
• Cook meals at home instead of eating out.
• Take advantage of student discounts.
• Look for free or low-cost activities.
• Seek assistance from your school or university if needed.

By incorporating these tips, you can effectively save money while studying abroad and set a strong foundation for your financial future.

Plan to manage both medical and health-related expenses

Prioritizing your health and safety while studying abroad is of utmost importance. This entails being mindful of the new weather conditions, dietary practices, and lifestyle adjustments you may encounter. Additionally, having comprehensive health insurance coverage is crucial to handle medical emergencies or unforeseen situations.

Here are some valuable tips to stay healthy and safe during your study abroad experience:

• Obtain health insurance that covers you in the country where you are studying
• Familiarize yourself with local weather conditions and dress appropriately
• Be cautious of unfamiliar foods and make wise food choices
• Prioritize sufficient sleep and engage in regular exercise for overall well-being
• Be informed about the local healthcare system and know how to access it in case of an emergency
• Ensure your vaccinations are up-to-date for added protection

By following these guidelines, you can effectively maintain your health and safety while studying abroad. Furthermore, having adequate health insurance is vital for various reasons:

• Medical expenses in foreign countries can be costly, even for minor treatments
• Health insurance can provide financial assistance for medical care during emergencies
• Some plans may cover travel and transportation expenses to and from hospitals
• Health insurance grants peace of mind, knowing you are protected in case of unexpected medical events

By recognizing the significance of health insurance and incorporating these safety tips, you can enjoy your study abroad journey with confidence, knowing that your health and well-being are safeguarded.

Avail of student discounts and benefits

Being aware of and utilizing student-specific discounts and benefits in the host country is highly beneficial for students studying abroad. Various establishments, such as restaurants, movie theatres, and transportation services, often provide discounted rates exclusively for students. Obtaining international student discount cards can further enhance these advantages, granting access to a diverse array of discounts and deals on different products and services. By taking advantage of these offers, students can save money on everyday expenses and effectively manage their budget during their study abroad journey.

Earn while you learn

Many students who study abroad often opt for part-time jobs to supplement their income and cover expenses. Engaging in such work can provide valuable work experience, help build new connections, and earn extra money.

When searching for a part-time job while studying abroad, several factors should be considered:

Alignment with interests and schedule: Choose a job that aligns well with your interests and doesn't overly interfere with your studies.

Legal work: Ensure that you are legally allowed to work in the country where you are studying.

Fair wage: Look for jobs that offer fair wages and avoid exploitative situations.

You can explore various avenues to find part-time jobs while studying abroad:

College or University: Check with your college or university's student employment offices for on-campus job opportunities.

Local businesses: Look for part-time job openings in local businesses to connect with the community and make new acquaintances.

Online job boards: Utilize online job boards that list part-time job opportunities in different countries.

Once you secure a part-time job, time management becomes crucial. Balance your work commitments with your studies, ensuring your academic pursuits remain the top priority. Honest communication with your employer about your academic schedule is important.

Finding and working a part-time job while studying abroad can be rewarding, offering a chance to earn extra income and gain valuable work experience. However, effective time management and prioritizing your studies are essential for a successful experience.

Here are additional tips to aid you in finding and managing a part-time job while studying abroad:

Start early: Commence your job search early, as the best opportunities tend to get filled quickly.

Flexibility: Be open to adjusting your working hours to accommodate your academic schedule.

Networking: Connect with other students who have part-time jobs to learn about potential openings.

Seek help: If you face difficulties finding a job, consult your academic advisor or the student employment office for guidance.

By following these tips, you can enhance your chances of finding an excellent part-time job that complements your study abroad experience.

Plan how to repay your loans

If you have taken out student loans, begin repaying them as soon as possible to minimize interest accumulation. Even during the grace period, making small contributions can significantly reduce long-term interest costs. Responsible loan repayment builds a positive credit score, which is crucial for future loan approvals like mortgages or car loans.

Moreover, studying abroad can instill financially prudent habits as you manage your own finances. Learning to make wise spending decisions and saving money will be valuable skills throughout your life, regardless of further study abroad plans.

Don't let financial concerns deter you from studying abroad. By following these tips, you can manage your finances effectively, maximizing the benefits of this incredible opportunity for personal and financial growth.