Studying abroad is not cheap, especially when it comes to living expenses. You might be able to plan your detailed and estimated monthly expenses, but in practice, students often spend more than they should. To counter this problem and risk not having any money by the end of the month, financial discipline should be reinforced!
How to Maintain Financial Discipline
Discipline in making financial decisions should be buttressed by understanding the indispensable status quo. If you are a student who allocates £1200 per month, then you could not spend more than the allocated number as it would disrupt your monthly spending, eventually disrupting your allocated cost of living for months to come. Therefore, it is essential to categorise and create a budget for your spending.
The Method to Budget Expenses
To be financially disciplined, you would have to follow a budgeting plan that would ensure how you are going to allocate the monthly sum of money. The average cost of living in the UK is approximately £12,000 per year, divided by 12 months, the monthly cost of living should be around £1000. This sum of money would mean differently to each student, some might say that £1000 would be enough, but some wouldn’t as it all depends on the way they allocate their daily budget.
If you have a tight budget and are in fear of overspending it, one of the methods to control your spending is through the 50/30/20 plan. It entails using 50% of income on needs, 30% on wants, and 20% on financial goals from your overall monthly expenses. Sticking to budgeting will ensure that you don’t squander your money on unnecessary goods and consumptive behaviour, guaranteeing that your maximum monthly expenses are met.
Don’t rely on Debt!
Opting for debt is the easy way out when students are entangled with money-related issues. Uber, Deliveroo, Just Eat and other applications make it incredibly easy to instantly purchase goods and pay later. Flexible payment methods utilising Buy Now, Pay Later (BPNL) loans or credit cards could be an easy way out for students who are prioritising what they want rather than what they need. These payment mechanisms make students susceptible to budgeting oversight as they provide an imagined additional money that could be paid back for months to come.
In reality, both BPNL and credit cards could mislead students to underestimate the value of money they have in their monthly spending. It is also customary for debt to be multiplied over time, thus if you are unable to pay back the money that is owed to the creditor, debt could have a snowball effect that could cost you multiplied interest rates, making your living cost in the UK more expensive.
All-in-all, to avoid overspending, you would need to refrain from spending your money for unnecessary things that would jeopardise your monthly budget. The 50/30/20 budgeting plan will never work if you are incapable of setting a cap on your spending. Thus, self-restraint should be the key to maintaining financial discipline as you would have to comply with an allocated monthly budget.
Do you want to know more about similar tips on living in the UK? Contact our team in finding out more.