Starting university in a foreign country came with many firsts for me. It was my first time living apart from my family, relocating to a different country, and, most importantly, managing my finances. As a student, saving money might seem quite daunting, given the high cost of living, tuition fees, and rising inflation. However, there are various methods you can utilize to lift the fog of uncertainty when it comes to keeping costs to a minimum.
Make a list of your monthly expenses.
This can even be done using traditional pen and paper. I can almost hear the audible gasp. I know, I know, we aren't in the olden days anymore, but it still hasn't become that rare of an occurrence. Alternatively, this could also be a spending log or an Excel document. The next step would be to categorize your spending into 'fixed' (meaning if I don't pay these, I'll become homeless) and 'variable' (like the urge to splurge your entire life savings when your favourite items are on sale) expenses.
50/30/20 rule
The 50/30/20 rule can be a good template to start with when entering the unknown territory of handling finances. This requires you to divide your monthly income into three categories - 50% for your 'needs', 30% for 'wants', and the last but most important 20% goes into savings. You can tweak these numbers to make it more personalized. For example, a more significant amount might be going into the category of 'needs' if you're living in a relatively more expensive area.
Cash flow
You can build your budget around times when you know there will be cash flow into your account. For example, it could be a scholarship or bursary funds, salary from a part-time job or when your parents send you some money (we've all been there). This can help you formulate your plan in such a way as to ensure that you have enough insight from the start on how to manage your spending for the rest of the month.
Make use of student discounts.
This is the best way to cut down on your spending. Students aged 18-26 can obtain an ISIC card and enjoy numerous perks. You name it, from getting discounts on public transportation tickets to deductions on groceries purchased. Check out the article by Dana, a Study in Czechia ambassador, to learn more about excellent student discounts in Czechia!
These methods help you identify where you might be spending needlessly, and they can also help you procure a plan that makes you less likely to spend more than you have. If you want to purchase something that can throw you off your budget, reflect on whether its acquisition is necessary or if it's something you can put off for now. Spending recklessly on more than a few nights out with friends and surviving on bread for the next two months is probably not anyone's idea of 'living your life to the fullest'. This also brings me to my next point – try cooking your food as much as possible. Planning your meals out can be an effective way to cut costs. Not to mention, you are more likely to eat healthier, too. It is just a win-win situation.
As much as I may have come across as a miser in this article, I wanted to conclude with an important reminder. Sticking to a budget can feel like getting all the fun sucked out of life itself but remember, it is just a tool to help you achieve your objectives. You can also make the whole process more enjoyable. Celebrate your successes in controlling impulsive spending and staying within your budget by rewarding yourself. This will make this seemingly exhausting work seem much more enjoyable. So, embrace the power of budgeting and seize control of your finances today!