Study Smart, Spend Less: 5 Savvy Tips to Save Big Bucks Abroad!

Published on June 21, 2024.

How do I save money while studying abroad?

Understanding the ins and outs of money matters is a big part of being a college student, especially when you're studying abroad. It's like learning a whole new skill set that can make your life a whole lot smoother. For international students, this learning curve is even steeper but equally important. So, in this guide, we're going to break down everything you need to know about saving money while studying abroad. From budgeting basics to smart spending tips, we've got you covered.

Let’s dive straight into it-

BUDGETING

We can’t discuss saving money without mentioning budgeting. While it may seem obvious, having a robust budgeting system or habit is always wise.

So what is budgeting anyway? It can broadly be defined as the process of calculating how much money you earn or save during a particular period of time, and of planning how you will spend it. In simpler terms, it's about understanding your expenses and organising them to achieve specific goals. Essentially, budgeting streamlines planning, saving, and expense control, making it easier to manage your finances.

The steps involved in creating a budget include:

Determining your timeframe and setting goals: Writing down your savings goals is the first step in creating a plan to make them a reality. A budget will also help you prepare for unexpected expenses and obstacles. While budgeting involves challenging decision-making, setting goals makes the tough choices easier.
Finding a budgeting tool that works for you: Some people prefer the simplicity of pen and paper, while others use software programs. A classic option is Excel or Sheets, which require some expertise but are manageable to learn. There are multiple budgeting templates available online too. Many apps are designed to help with daily budgeting, offering features like visual data representation of expenses and simple user interfaces for easy tracking.
Identifying your income and expenses: For a student, income includes allowances, part-time job earnings, or other sources. Expenses cover textbooks, transportation, food, entertainment, personal items, and bills. Identifying and tracking income and expenses is essential to budgeting. Being aware of your finances can lead to more mindful decisions.
Subtracting your expenses from your income to see if you have money left over or if you have a shortfall, and making any needed adjustments: Combine your income and expenses to create a budget. This involves comparing total income with total expenses to see if you have a surplus or a deficit. If you have a surplus, you can meet your savings goals for the month. If you have a deficit, you need to increase your income or reduce expenses by prioritising needs over wants and making smarter decisions.

Budgeting is not just a one-time event. You’ll need to track your spending over time and update your budget as needed. Moreover, there are multiple approaches to budgeting and saving up money for your specific needs and goals. One widely used approach is the 50/30/20 budget rule. For students, this rule simplifies money management into three parts:

50% for Needs: Spend half of your after-tax income on essential expenses like rent, groceries, utilities, textbooks, and transportation. If this exceeds 50%, look for ways to cut costs, like sharing accommodation or using public transportation.
30% for Wants: Allocate 30% for non-essential spending, such as dining out, entertainment, shopping, or leisure activities. You can still enjoy these extras while staying within your budget by being mindful of your choices.
20% for Savings: Dedicate 20% to savings and investments. Start with building an emergency fund for unexpected expenses, then consider saving for future goals like travel or further education. Even small amounts add up over time, so it’s always smart to prioritise saving regularly.

Of course, this can look different for every student based on their circumstances and goals, but the main aim is to be intentional with our expenditures. Other common budgeting methods include zero-based budgeting, envelope system budgeting, and pay-yourself-first budgeting.

However, remember that no matter what approach you take, the end goal is to meet your financial objectives, such as saving up a specific amount of money. While budgeting lays the foundation for savings, it’s important not to get too carried away. Focus on making it an easy habit and a core part of your routine rather than treating it as a chore or obligation. This way, you’re more likely to appreciate both the process and the goals, and you'll learn more about managing your finances naturally.

EDUCATE YOURSELF

Financial literacy is crucial for anyone who cares about their finances and goals. In today's world, almost everything is affected by money, so it makes sense to be well-educated and aware. When you are financially literate, you build the essential foundation for a smart relationship with money. Understanding this is especially important for international students, as it directly impacts their ability to save and be mindful of their decisions. Being knowledgeable about how money works in the country where you're studying and spending a significant amount of time is wise.

Taxes play a big role in this. Different countries have very different rules and policies when it comes to international students and taxes. In all the three countries - the USA, UK and Canada, international students and scholars on student visas/study permits must file taxes, depending on various factors like their residency status, whether they earn an income while studying in the country, and also the income level. By knowing the tax rules in their host country, students can make smarter decisions to maximise their savings.

When it comes to banking, choosing the right bank is crucial. Look for accounts that don't charge monthly fees and have low fees for international transactions. Considering online banks can be beneficial too, as they often offer better rates and fewer fees for international transactions. This way, international students can manage their finances conveniently and save more effectively while studying abroad.

MAKE USE OF RESOURCES

School Resources

You're already paying to attend college and access top-notch educational resources, so now is the time to put them to use! Take full advantage of your college library to secure resources and academic work that you might otherwise need to pay for. This also includes utilising the school gym and health centres, which may be available for free or at a reduced price. Additionally, check out whether there are cultural or entertainment events subsidised by your school. Although these offerings differ from school to school, it’s beneficial to familiarise yourself with the resources and benefits available to you as a student.

Student Discounts

As a student, you are often eligible for numerous discounts and benefits, which can help you save a notable amount of money in the long run. Typically, you just need to show your student ID card in-store. For online purchases, you may need to sign up for a student discount service, which verifies your student status for retailers. Make it a habit to carry your student ID wherever you go, as you never know what discounts you'll be entitled to!

Consider Used/Rented Textbooks or Online Sources

Switching to online sources, renting, or buying used textbooks offers a sustainable and budget-friendly alternative to purchasing expensive textbooks each semester. With undergraduate students spending significant amounts of money annually on textbooks, these options provide easy ways to save. By comparing prices, considering previous editions, and utilising campus library resources, you can effectively manage your expenses while accessing necessary course materials.

Public Transportation

Compared to cabs and personal vehicles, public transportation is an ideal choice for college students. It offers a more affordable option and helps students save money in various ways. Many colleges provide free or subsidised transit options, allowing students to travel around campus and the surrounding area without additional costs. Beyond financial savings, some students find that public transportation can also save time, as they can use their commute to catch up on reading or homework!

EARNING YOUR OWN MONEY

Naturally, the best way to save more money as a student is to earn more or increase your income. However, the choice to work while studying depends on various factors, such as the demands of your coursework and your ability to meet the hours specified by an employer.

If you’re able to work part-time during your studies, it can be a great way to pave your path into the workforce. This can help you build an essential network and skills that will assist you later. Not only does working part-time enhance your CV and open doors to new opportunities as a graduate, but it also gives you a better understanding of how the working world operates and teaches you a sense of responsibility.

Students have various options for part-time work to earn extra income while studying. On-campus jobs, such as library or teaching assistant (TA) roles, offer convenience but are competitive. Off-campus positions, like office work or waiter/waitress roles, provide a broader range of opportunities and may require commuting. Additionally, part-time online jobs offer flexibility and convenience, allowing students to work remotely and tailor their schedules around their studies.

Furthermore, it's essential to consider the regulations established by each country regarding international students' employment opportunities on their student visa, as well as the policies enforced by their respective universities. In the UK, US, and Canada, international students on student visas generally have similar work permissions, allowing them to work up to 20 hours per week during term time and full-time during school breaks.

It's also crucial to acknowledge the diverse standards of minimum wage across various countries. In the UK, the current minimum wage varies depending on age and whether the worker is an apprentice. As per the latest reports, it ranges from GBP 11.44 (INR 1216) for those aged 21 and over to GBP 6.40 (INR 680) for apprentices. In comparison, the average minimum wage in the USA is USD 7.25 (INR 603) per hour, while in Canada, it stands at CAD 17.30 (INR 1056) per hour.

SCHOLARSHIPS AND FINANCIAL AID

Scholarships and grants offer vital support for students to manage their finances effectively throughout their academic journey. Contrary to popular belief, these financial aids aren't just for new students; returning (second year and so on) students also have access to various funding opportunities.

Institutions and private organisations often set aside funds specifically for returning students, recognizing their dedication and academic achievements. These aids can be based on financial need or academic merit. Merit-based scholarships typically require students to meet specific academic criteria, such as maintaining a certain GPA. Achieving these scholarships may involve submitting applications, writing essays, and obtaining letters of recommendation.

On the other hand, bagging scholarships and financial aid during the first year of college, while admission, is quite the head start. Not only does it help with immediate financial burdens, but it also lays the groundwork for long-term financial stability.

However, we understand that with so many options to consider and criteria to meet, it can get overwhelming very quickly. At Tads Education, we understand the importance of finding the right financial aid programs that align with each student's unique circumstances and aspirations. Our team helps students identify relevant opportunities and navigate the application process, from A to Z. Join us at TADS Education and let us help you go through this journey on a much smoother road!