When you think of student lifestyle, budgeting isn’t exactly the first word that comes to mind.
Between society events, rowdy nights out and a general lack of experience over how money works, many students don’t get the hang of it until second or third year (Economics students are a notable exception, but then they basically study how to manage money). So how the hell are we supposed to manage money when we don’t even really understand the currency? While a year abroad can be a life-affirming experience, it can also be ruinous.
Don’t look at it like a holiday
But it doesn’t have to be so bleak! The first thing you need to do is let go of the “holiday mentality” and do it quick. For those who are unfamiliar, it’s essentially when you rationalise buying something expensive because it would be cheaper than at home. This is fine if you’re there for a few days and just plan to buy souvenirs, but you’re living here now, and you have to account for essentials like food and phone bills. Be prepared to think of your new currency as your only currency.
The next thing you need to do is get a bank account ASAP. Most English accounts charge £2-£5 on each transaction while abroad, even if you notify them. This might not sound like a lot, but that pack of sweets you had to have that night? Yeah, that’s pretty expensive now. The only way you can get around this is having a no-charge card, which some banks do offer. But even if you do have access to this, I strongly recommend taking out an account – most are free to open and close, it’s a new experience and you won’t have to keep such a keen eye on your finances!
Budget, budget, budget
The next thing you’ll have to do is draw up a list of monthly costs that you know you’ll have to pay – rent, bills, phone costs, etc. It’s unlikely you’ll have a job, so you’ll simply be working through your student loan and grants. By making a note of how much you’ll have to spend before you get your next instalment, you’ll be able to spend more wisely when it comes to things like travelling and socialising.
I know this has all seemed pretty savings-focused. But don’t spend it all living like a hermit! If you have access to an interest-free overdraft, now’s the time to use it. Because realistically, you’re not going to be able to do what you’re doing for a while after, so you might as well make the most of it, right? And this usually works out better than a credit card, which usually leaves you with interest charges, even if they’re only minimal. Ultimately, while you should try to stay within your means, don’t worry if you end up a little outside them, and have fun!
Do you have any tips on how to budget on a year abroad? Let us know in the comments below!
Photo: anurag agnihotri / Flickr
Warwick Editor for Career Camels and Deputy Comment Editor for The Boar.