How Not to Go Broke While Studying Abroad

By Jacob Parackal

Thanks to globalisation, the best universities in the developed countries are being swarmed by students from all over the world – students are crossing their national boundaries to educate themselves in a global environment with the dream of becoming a global citizen.

Universities as well as national governments are offering various facilities to them in terms of scholarships so that the truly capable students can get the best opportunities for studying abroad. When the bright part for the students is that a lots of opportunities and avenues are available to them to help them study abroad, there is still the problem of the high cost of education, which has particularly proven to be a big hindrance for students coming from weak financial backgrounds. 

If you get a chance to study abroad, you may manage to arrange the college fees, but still, the cost of living while studying in US or European countries is always an issue of significant importance. Even if the college fees are paid, but you cannot manage your limited resources prudentially, you may have to abandon your dream run midway before touching its finishing line.

Here are some tips that will help you manage your limited financial resource while studying abroad:

• The first and foremost thing is to prepare a budget, and if possible, collect the information about the most common and essential expenses from someone who is already studying or has studied in the same university or at least in the same country. Your budget should be divided into two parts depending on the information you have collected and depending on the facilities that your scholarship will provide you at free of cost.
  • The first part of your budget should be for essential expenses that you have to incur while studying abroad, like monthly cost of:  Food, lodging, clothing, tuition fees, study materials, travelling, telephone, utilities, health insurance and essential personal expenses
  • The second part of your budget should consists of the expense for recreation, site seeing etc.

• The first priority is of course meeting the minimum basic requirements as listed out in the essential expenses part of your budget. Get a detailed analysis of the expenses, and after computing the total, compare it with the finance that you will be provided with. While thinking about the source of finance, always check the amount that you are going to get in your hand as disposable income per month after deducting tax (some scholarships or financial assistance are often taxed based on the policy of the country), or after deducting the exchange fees (the banks or the financial institutions acting as the exchange houses often charge fees when exchanging one currency into other).

• Always make sure that that you add an additional percentage to the total of the expenses as calculated by you, because of the price fluctuations in the market. This contingency fund will make sure that you will never run out of your fund while meeting the necessary expenses while studying abroad. After comparing the total budgeted expenses with the amount for spending in your hand, you can see whether you have some extra income to spend towards the items listed in the second part of your budget.

• One important thing you have to remember that, before spending on your recreational activities, if there is any surplus after meeting the essential costs, it is better to set aside a percentage as saving, because you never know when some extra bucks will be needed for your educational purpose. It may happen that you have to go for some extra tuition to have a good grip on the subject and that could be very essential to get a good grade in your exams.

• Safekeeping of money is another important thing. Take utmost precaution in keeping cash (it is better to carry a bare minimum amount of cash as per the requirement of a single day as planned in advance) and in using the ATM.

• While using the ATMs or bank accounts for retrieving money, it is better to keep a day to day track for the transactions you have made, so as to ensure that no mistakes have been made by either party to the transaction. Moreover, this habit will help you to stick to your budgeted expenses also.

• Shopping is one item you have to be careful about. A properly planned shopping can save you a good amount of money. Before you go for shopping, collect reliable information about the exchange rates prevailing on that particular day (exchanges rate fluctuates each and every day) so that you can check whether you are getting the right price (in terms of the home currency of that country). If a top rated service is not an essential one, it is better to find a discount shop. 

• When using public transport, if possible and permitted always try to use your student ID to reduce the cost of transportation a bit.

• Always try to pay bills within the due date or you may have to bear an extra as fine.

• Always check the number of times you can use your ATM card without any additional charges. If additional charges are to be paid when the card is used to withdraw money from the ATMs of other banks, avoid using those ATMs as much as possible.

However, in this discussion I have has not touched upon the expenses involved in banking transactions or how to monitor the exchange rate in the best possible manner. It is always better to take a careful note of these factors also, as sometimes the exchange rate offered by various banks or the service charges of various banks differ widely and can impact your finances considerably.

Whatever, may be the budgeting or planning, one thing is important and that is that the implementation of all these planning ultimately depends upon you. Moreover, you have to be flexible to cope with unforeseen expenses that you may not have budget for. At the end of the day it is your determination and not always the judicious use of financing, that will help you to reach your goal of having the best degree from the best possible college.

Contributing Blogger Jacob Parackal is a 2011 alumnus of Hult International Business School. He has more than 4+ years in strategic consulting for top MNC companies. He is currently the co-founder of  ‘Select My Tutor’ and runs its operations. Cover image Courtesy newbeatsocial.com