As international students, it can be hard to plan a budget for your first few weeks in a new country – there will be many one-off expenses, social events, activities and societies to join, and things you’ll want to buy for your new home. It’s not easy to know what to expect, and how to create and manage a budget.
When living on a limited budget as most students do, it is very important that you manage your finances properly. Here are some steps you can take today to help you better manage your living expenses while studying in Canada:
1. Start tracking your money
Keeping receipts and records of your own expenditures can be handy. The important thing is to record what you are spending as soon as possible to keep your records accurate. You can do so using an excel worksheet or download an app on your mobile phone. In the beginning of this exercise, you just want to see where your money is going towards. After a while, you want to start analyzing which one of your previous expenditures was good or bad. There will likely be a few surprises when you see the results of your tracking, especially if you are like me and tend to spend money on things I really don’t need. You are probably spending more in some areas than you think–small expenses can add up quick. Next time that you buy something, ask yourself if whatever you are buying is really something you must have or need.
2. Set up a spending plan
To manage money properly and get ahead financially, you need to spend less than you earn. Record your sources of income and WHEN you receive them. Then determine how much of your income is spent on monthly expenditures and necessities (such as rent, food, and phone plan). Making a short list of all the payments you must make each month to come up with that number. After subtracting the cost from your income, you can plan how you want to spend or save any remaining funds (if there’s any!).
3. Cut your spending
After tracking what you are spending on for a month, you will likely be able to identify some areas where you can cut down on your spending, keeping your budget on track. When creating your budget, remember to plan for irregular bills and set aside some money for unexpected expenses. Make sure you review your budget every few months or whenever there is a significant change in your income or spending.
4. Save money
Now that you know where your money is going and you’re spending less than you earn, you can start saving. To get ahead financially, you need to set aside a percentage of your money. If you are just starting to manage your money, you probably are not used to setting it aside and usually just spend it as you make it. Maybe you want to set aside money for travelling. Start saving money in small portions now and you’ll see the results in the near future. If you have the tendency to impulse buy, you can leave your card at home to avoid buying unnecessary things. If you have credit card debt, you can save money by calling your credit card company and asking for lower rates. The best way to save money on credit card bills, though, is to pay them off as soon as possible. Once you start managing your money, you will find out that it makes other parts of your life easier as well.
5. Share expenses with roommates
In my case, I have to share my house with two more students. We know there are things we all need to use/like to eat (ex. Eggs, dish detergent, dryer sheets) and we could save money if we shared some of those expenses. The idea is that you save by buying things in larger quantities. What we did was to create a calendar with dates and what items we had to purchase per month and we would take turns buying those items.
I hope these tips are helpful. Do you have any other money-saving tips to share? Or do you have some questions about living expenses for international students in Canada? Let us know in the comments below!