Want to be smarter with your money while studying abroad? Here are eight money mistakes international students make and how to avoid them.
If there’s a conversation you shouldn’t veer away from, it’s money talks. With prospects of international education on the way, finances must be a top priority.
It’s no mystery that studying abroad comes at a premium cost. There are staggering tuition fees, plus a steep cost of living. All these expenses demand you to apply smart solutions to budget your money.
Sadly, some international students fall into mindless spending that budgeting becomes only an afterthought. They make money mistakes that depending on the scale, might take a lifetime to mend.
Here are eight money mistakes students make and how you can avoid them:
Setting a Budget but Not Committing It
International students often set their financial goals but fail to commit to them. To solve this, you must set a realistic budget that fits your lifestyle.
You don’t have to be too restrictive on your spending. But remember to always be wise about where you put your money.
Here are a couple of tips to create a budget you can stick to:
- Create a list. It can be on Excel or Word, whichever you’re most comfortable with. Make a table outlining your sources of money. Add another table listing down your expenses. Ensure that each table has a dedicated area to mark the total of each. Compute how much you’ll have left and use it as savings.
- List down your financial priorities. Always put education-related expenses at the top like your tuition fees. Follow it with your necessities such as food, rent, and utility bills. Your travels and excursions can be in the latter parts.
Buying New Study Materials and Textbooks
Why buy new materials when you can get preloved ones? Some former students sell their old textbooks to new students. Look out for these offers as they always offer the best deals.
Don’t know how to find some? Follow some tips below:
- Join university groups online (e.g. Facebook). Create a post asking that you’re looking for certain textbooks. Other seniors might see it and offer you a cheap rate for the books.
- If the cost of the used materials is still too steep for you, haggle. These students are trying to get rid of their textbooks anyway, so at least haggle for half the asking price. If not, meet halfway because a brand-new item will totally be pricier.
Lack of Awareness in Foreign Exchange Rates
Foreign exchange rates can be a complex and confusing issue. But for international students to receive and send money back home, this is vital.
You must gain at least a basic understanding of how the foreign exchange rate works. This can have a significant effect when sending or receiving money to or from your home country.
There are a lot of ways to surpass the challenges of confusing exchange rates. Here are some of them:
- Use money wire networks like Flywire to pay for your tuition. As a rule of thumb, you must always choose a transfer service that allows you to send money in any currency.
- There are money transfer networks that allow you to send and receive money anywhere in the world. The fees here are typically lower than at traditional banks so you might want to try them out.
Not Evaluating Meal Options
Meals make up the majority of a student’s expenses. However, many forget to evaluate their options when it comes to food.
Some universities offer great value meals for students staying on campus. You can also refrain from eating out frequently and make your own meals if possible.
Apart from these, here are a few more meal-saving tips to try:
- Plan your meals on a weekly basis. This way, you can make a single trip each week to the grocery store. Get every ingredient you need so you don’t have to make second trips.
- Treat yourself! There’s no trouble eating out once in a while with your friends. Just make sure that you have the extra cash to pamper yourself.
Buying Items on Impulse
Impulse buying is anyone’s greatest financial sin. Buying things, especially costly, impractical ones on a whim, is never a good idea.
Make sure to buy your necessities first. If there are some extras, you can use them to treat yourself.
Can’t seem to control your shopping habits? Let’s help you out with the following:
- Shop with cash. When you see the amount of money you have, you’ll have less impulse to spend it. Of course, you must only bring the amount that you need for that day. No need to bring any extra.
- Make a shopping list. This way, you can concentrate on only the things you need to get your shopping done. Be strategic with your list as well and place the most important ones at the top.
Overlooking the Advantages of Student Discounts
International students often forget to take advantage of their student status to get discounts. Make sure to get a discount card such as an ISIC to get student perks on food, travel, and more.
Here’s how you can maximize student perks while you’re abroad:
- If you have an ISIC, browse through their website to see where you can use your card. You can filter through the results from travel to entertainment and food.
- If you don’t have an ISIC, you can simply ask the store staff if they offer student discounts. They usually do. Make sure to take advantage of that as well.
Lending More Money Than You Can
If you can lend money to someone in great need, it’s a noble and generous act. But if you lend beyond your means, you’re pushing yourself into financial trouble.
Be honest about the amount you can lend or don’t lend at all. Only make an exception when you know you have other sources of immediate cash.
Don’t get stuck in this situation by doing the following:
- Introduce your friend to other methods of money-saving. Or maybe help them out with a fraction of what they need.
- Tell your friend that you’re willing to lend but not right at the moment. As mentioned, just be honest about it. You’re both students, so they’ll understand that you have expenses of your own.
Spending More Than Saving
Remember to exercise financial control while studying abroad. Save more than you spend so you can have money as an emergency fund.
On a more realistic note, your monthly budget may already be at its limit (for tuition and living expenses). If that’s the case, there’s no need to feel guilty about having little savings. As long as you can survive (and enjoy) during your stay, an effort to try is enough.
Try some of these tips out:
- Save before you spend. It’s a common rule in finance management but it can really be life-changing once you live by it.
- Be your own financial advisor. Tell yourself to be more disciplined when it comes to managing cash. Turn yourself into a trustworthy finance guru.
Many international students make financial mistakes while studying abroad. Fortunately, there are many easy ways to avoid these. Read more tips on money management for international students here at MSM Unify.