Monday, July 28, 2014

How to...Finance and Budget Your Year Abroad

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This how-to guide is the first in the series of Year Abroad Fortnight - a fortnight of articles focusing on all the different aspects of the study abroad experience.

Money makes the world go around, money doesn't grow on trees, money doesn't buy happiness but it helps, I could go on. We all know the drill - money runs the show, especially as a student when money is usually in short supply.

And as much as I advocate studying abroad, it does cost some mullah. 

But fear not, your year abroad will go smoothly - or at least for the financial part - if you implicate some forward-planning and budget wisely.

9 times out of 10 (not an official statistic, just one I'm throwing out for the hell of it) students miss out on funds, grants and bursaries available to them because they weren't aware of it. And I know for certain that my year abroad finance woes could have been eased a bit by enforcing a few budgeting rules.

So learn from my mistakes and check out how I funded my year abroad and my tips for budgeting your year abroad/study placement/whatever it may be:

(NB. As this advice is mostly from personal experience, it will have a British focus but some of the tips will be applicable regardless!)

How I funded the year abroad

Student Loan
The obvious resource but make sure to leave plenty of time to sort it out (it involves filling out even more forms for Student Finance England, joy.) But good news, you get an increased student loan to take into account the extra incurred costs.

Of course it's pretty difficult to fund yourself solely on your year abroad so I also had:

Erasmus Grant
If you're from the EU, studying in an EU institution or doing a student internship in EU but outside of your home country (that's a lot to take in one sentence) you are eligible for the Erasmus grant. It is non-repayable, non-means tested and quite possibly the easiest bit of paperwork you will ever have to fill in for free money. I got about €300 per month but the amount varies each year (usually €250 a month). Your university should be able to help you out so make sure you apply for it!

When interning in Paris, I got my intern's salary (€430 a month). It wasn't a huge amount - especially in Paris - but it contributed to my finances.

It took me years 8 months to receive what was owed to me but after jumping through every bureaucratic hoop French administration could throw at me, I got €720 worth of CAF benefit. For those who don't know what CAF is, it's the French equivalent of housing benefit and somehow foreign students are eligible for it. The moments when you want to scream in a infuriatingly indifferent civil servant's face are worth it when you finally get it. And again, it's free money, cannot complain about that.

Savings from summer job
The summer before I jetted off to France, I made sure to pay off my overdraft and get some savings stacked up. The savings were enough to pay off my debt, pay for my return flights to Colombia and dip into them every now and then when my bank accounts were low.

Student Overdraft
OK slightly controversial, I know, I shouldn't be advocating getting into debt. BUT, it is interest-free and I consider the year abroad to be an investment so I spent my overdraft allowance pretty much guilt-free; it allowed me to travel around South America at the end and I don't regret it for a second! I'm just paying it off now instead plus, I have all the memories when I (slightly) wince at my bank balance. You may even be able to extend your overdraft allowance, so butter up your bank manager and sweet-talk them into giving you more room to (financially) breath.

Finance and Budget Tips

Try and find as many sources of income as possible
You will have the obvious ones like student loan and your university may have various grants and bursaries on offer. But, try looking for trusts in your local area or contacting businesses. Are there benefits like CAF you can claim? Are you able to reimburse costs such as travel expenses?

Something I definitely didn't do and should've done. Spreadsheets are your friend in this case and tot up all your living expenses costs and income. Work out a daily/weekly/monthly whatever works for you budget accordingly, leaving a margin to have enough money spare for when unexpected costs are incurred.

Ask for student discount
As expensive as Paris was, it was a great place to be a student especially when doing a proper excursion as the majority of time, you could claim under 26 discount or even get in for free. Find out all the free and cheap things to do for when money gets tight.

Part time job
If time/visa obstacles allow, there are some part time jobs that are suited for foreign students. In Paris, there were loads of positions for au pairs and more and more need to learn English for professional reasons so an English language tutor is also a viable choice - you can also charge a good hourly rate too (€15-€20). The usual bar/waiting jobs also apply in this case too and it's a chance to meet more people as well as making a cheeky bit of pocket money too.

All that being said...

Don't be stingey
That doesn't mean let your budget go to pot but when certain opportunities arise ie. drinks with friends, a night out, a weekend trip, don't always hold back. The huge amount of opportunities to get out and see another part of the world are invaluable, unforgettable experiences so don't let your finances get in the way of your year abroad experience.

What are your top tips for budgeting a year abroad?

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