Charles Dickens expressed the importance of a budget in his book David Copperfield when he wrote:

Annual income twenty pounds, annual expenditure nineteen six, result happiness.
Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.

More than 160 years later, those words are as relevant as ever, especially if you are about begin a new chapter in your life of studying abroad. It’s the experience of a lifetime, as living in a foreign country is an education in itself. The value of learning to budget your expenses in a different currency will add a new dimension to that experience.

Expenses must be planned to study in college or at a university, and here, we hypothesize the exercise for study in the US. Before we consider the cost of study, it’s important to distinguish between direct and indirect costs.

Direct costs are, as the term suggests, directly related to education: tuition, books, and any special fees. Indirect costs are more flexible and encompass everything else. The priority should be to take care of direct costs.

Funds for direct costs should be from private or family sources, scholarships or loans. The ideal sources of college funds are scholarships and grants, because they do not have to be paid back. So apply for every scholarship that you’re eligible for.

If you have exhausted your sources of funds that don’t need to be repaid, consider a student loan to cover your remaining direct costs. But as an international student, you are not eligible for low-cost loans sponsored by the US government. However, organizations such as Sallie Mae offer private credit-based student loans that may be available to you under specific conditions.

Always remember that you are granted a student visa on the assumption that you will be financially independent while studying abroad. Hopefully, you’ll never need a loan if you budget for contingencies (more on this below), and use the money only in a real emergency.

Once you’ve worked out the direct costs, plan for indirect costs, which are primarily your living costs during the study period. The vital component here is accommodation. After you get your admission offer, your university’s housing office will send you information about on- and off-campus housing. If you plan to live off-campus, you’ll need to arrive there well before classes begin, to search for something suitable.

Above: The Bowman-Carter residence hall for women, Cornell College, Iowa (photo by _dew_incognito, used under CC BY 2.0 licence)

Off-campus housing costs vary depending on the institute’s location. In the US, costs are typically higher in urban areas than in rural ones, and higher on the East and West coasts than in between. Off-campus apartments are often unfurnished, sofactor this into your budget when deciding where you’ll live. Consider sharing an apartment with a roommate, so you can split the rent. 

Above: Campus connector bus with the University of Minnesota’s ‘M’ logo (photo by Michael Hicks, used under CC BY 2.0 licence)

Some institutions offer a free or subsidized shuttle bus service on campus and in the surrounding area. So picking a home in the right location could help cut commuting costs. As an international student, you may want to budget for the airfare home during the holidays. Book early to get a cheaper fare.

Meals are an important part of your budget. Universities generally offer meal plans, so weigh the options based on your schedule and preferences. After the day is over, it’s best to eat at home, rather than at a restaurant, to curtail your expenses.

Above: College football game (photo by Jim Bauer, used under CC BY 2.0 licence)

Life is incomplete without entertainment, sobudget for movies, snacks, concerts and short trips to visit friends. Your student activity fee will let you attend many events for free or at special student rates, such as plays, seminars, movies, and sporting events.

Another way to save is to buy used textbooks. You may be able to get these on campus or online. Make sure you get the edition recommended for your course. Your student health centre will be able to advise you on low-cost health insurance plans for international students.

Above: Coin-operated laundry (photo by davitydave, used under CC BY 2.0 licence)

Other expenses to budget for include a mobile phone, clothes, laundry, and internet. After you factor all this into your budget, calculate 10% of the total, and set it aside as a contingency fund. So for a total budget of Rs. 5 lakh, for example, it would be safe to add Rs. 50,000 for contingency. Use this only in case of an unforeseen emergency.

As for credit cards – ugh! Do you really need one? The cardinal rule is to use it sensibly, if you must have one. Injudicious use of a credit card will rip your budget into tatters. Use it solely for emergencies. Pay off the entire balance at the end of the month. Be sure you understand the interest rate, because that may dissuade you from owning a credit card!

Managing your finances sensibly will help ensure that your tenure as an international student is one of the most momentous experiences of your life. Without money worries, you will feel free, and your focus will be where it should be: your studies.

Above: New York City Public Library (photo by vincent desjardins, used under CC BY 2.0 licence)