How to budget as an international student

Budgeting is not the most exciting topic, but financial well-being is critical to your overall university experience.

Recent research commissioned by financial education resource Blackbullion found that nearly half of students have considered dropping out of university or deferring by a year because of financial barriers, which has only been exacerbated by Covid-19.

Some 75 per cent of students surveyed were worried about finances and 67 per cent said that financial anxiety affected their mental health. Being away from friends and family, and with the extra costs of studying abroad, international students can often feel this more acutely.

Having a budget doesn’t mean your money is sorted, but it does mean you have a plan to sort your money. A budget to track your income and expenses is how you monitor money coming in and going out; you know where your money is rather than wondering where it went. Here’s how you can optimise your finances as an international student. 

1. Know your numbers

Record all your regular monthly expenses such as rent, bills, food and subscriptions to get an idea of your average monthly expenses.

Then, write down any money you receive regularly each month – any parental contributions, earnings and student loans. If your income varies month to month, split this across the whole year, including earnings from a seasonal or term-time job, to arrive at an average income amount.

Then subtract your expenses from your average income. This gives you the starting point to understand how much you have left when you subtract all your necessary payments.

For international students, it’s also important to factor in currency exchange rates if you receive regular funds from overseas, because fluctuations can occur.

2. What’s the outcome?

If you have money left over each month, that’s great. I advise paying more into any outstanding debt to clear it faster or setting up a savings account.

A savings account is a wise idea for international students because it can help with unexpected expenses – an emergency flight home, for example.

Most students tend to spend more than they are receiving.  This is quite common, and some of the following tips will help you understand how you can manage this. 

The cost of studying at a university in the UK
The cost of studying at a university in the United States
The cost of studying at a university in Germany
The cost of studying at a university in Canada
The cost of studying at a university in Australia

3. Adjust your budget

If you are regularly spending more than you receive it’s time to sit down with your list and find ways to cut down on your spending. Tough, I know. Perhaps you have a monthly subscription you could cancel or you are able to share grocery shopping with your flatmates to save costs?

Cutting out things only goes so far, however. From housing, food and transport to books and social activities, most expenses can be trimmed but not wiped out to zero. So, be honest with yourself about what you should spend on and where you can save. You may want to set a monthly limit for each category and aim not to overspend.

I recommend the 80/20 rule for students. By spending 80 per cent of your money on things you need and 20 per cent on things you want, it will become clearer which expenses can be cut to keep your budget balanced and under control.

If you find yourself in persistent deficit, it’s worth reaching out to your student services team for additional guidance.

4. Increase your income

While Covid-19 put an end to many traditional student jobs – from hospitality through to retail –all these opportunities will hopefully return. In the meantime, many entrepreneurial students have started small businesses selling homemade products or online tutoring services.

However, I wouldn’t recommend prioritising paid work over studies; try to find flexible work that will fit in around your university work. 

As an international student, it’s important to check what the rules are around working on your student visa before taking on any jobs alongside your studies. You can find this information through THE Student’s guides to student visas in the UK, US, Australia, Canada and Germany.

To minimise additional stress and pressure, I’d suggest you look for part-time or casual work if you genuinely need the money and it relieves pressure elsewhere. Don’t overload your schedule and remember to keep your eye on the goal – doing well at university.

Budgeting is the core of almost all money matters. By setting a clear plan for your money, you’re not just organising your finances, you’re putting yourself back in control of your financial well-being.