The M*ney One [Part Four]: Budgeting Basics

If you haven't checked out part one of  The M*ney One, how to pay for it all, you can here and part two here. You can find my last post here. You can also see the Ultimate List of Resources here.

   Firstly, I would like to express my gratitude to all of you. Since starting this little website just a month ago, the amount of love and feedback I have received from my friends and family both here on the internet and in real life has been insane, especially on these articles about money! Thank you. Without further adieu, here are my biggest suggestions for budgeting abroad, or actually, in general.

1. Freelance Budgeting/Know How Much You Make (Fighting the Bank Account *Cringe*)

   If you are implementing some of the money-making tools I have outlined here, you freelance, or you are on an hourly pay schedule, then your income varies month to month. With freelance income like this, the biggest budgeting tip is to use the money you made from the month before. It takes some set up but ensures that you always know how much you have. It's a little confusing, so let me know if you have any questions. Bear with me here.
   While you are doing your freelance gigs, you can adjust your budget to fit the amount of money you actually have for the following month, thereby preventing you from going into debt. Let's say you land in Busan in August with $500. Split that in half. $250 to get settled now and $250 for September. Then, you can build your September budget around the $250 you know you have set aside for September. Stick with your $250 dollar budget even though you are making money from freelance gigs, that income is for the following month.  If you make $500 in September, while you're on your $250 budget from August, you now know you can make your October budget based around that new $500 income. If you only make $50 in October, you know that you should set aside some of the September income to supplement October's income. Better yet, make sure that you include as much emergency savings as possible in your budget. Once doing that initial split in August, you will be consistently working off of the stable income from the month before, instead of spending as you make and falling short by the end of the month. In short: Make. Budget. Save. Spend. Adjust. Repeat.

2. Let's Talk Priorities (Taurus Sun + Food= Trouble)

   Let's talk about when you actually arrive at your destination. Even if you barely scraped the money together to pay for the flights to your host country, now you're there and you're going to have to spend even more. So what? If you are studying abroad, your program very likely includes room and board. Take advantage of everything included, you're paying for it! Find out the best times to eat in the dining halls, spend quiet time in the library, enjoy scenic walks around campus. For those of us who have hosting institutions, excursions will likely be our biggest expense. I will talk about the smartest ways to save on the tourist attractions in another article. If you are not studying while you're abroad, minus whatever rent you pay, your biggest expense will likely be food. With food expenses, be smart, not spontaneous. Plan your meals, and make sure to always have a snack or small, non-perishable meals with you so that you don't get tempted to spend money because you are hungry.
   My biggest tip on saving money on food is to only eat out socially. This mantra especially works when you're not going out every day because you're in a new country and don't know anyone yet. The idea is, only eat out when you have a friend who suggests eating out (it's me, I'm the friend), if you want to take a professor out for coffee, or there's some sort of exchange mixer that will allow you to meet new people attending your university or institution for the cost of appetizers or drinks. When I first moved to university for undergrad by myself, this idea helped me save money and make new friends. Listen, I wanted Starbucks so badly, whenever I struck up even the smallest conversation with someone in class, I would always ask them if they wanted to go get coffee with me, and I made some pretty good friends that way. Plus, I got my venti passion tango lemonade with seven pumps of classic sweetener guilt free. Yum.

3. So, Ms. Know-It-All, How Do You Budget? (Please Please Don't Ask Me About That Excel Proficiency I Put on My Resume')

   People often forget their financial goals when spending a large amount of time abroad. More so, they maintain the poor financial habits they developed at home that just don't stand when they go abroad. I will elaborate on this in a different article but having a stationary budget, whether you are hourly or salary, is dangerous. Even if you are getting paid the exact same amount every month, playing around with your budget allows you to challenge your financial goals. Invest more one month, have a dinner party and spend more on groceries the next, beef up the emergency fund the next, pay more than you owe on a credit card or mortgage after that. Challenge yourself and don't get too comfortable in your perceived financial stability.
   My biggest financial goal while abroad is... to not get behind on my financial goals while abroad. This means adding more to my emergency savings, investing more into my Roth IRA, and keeping credit card debt down to the suggested 30% across all cards while I am in Busan. The key to maintaining your financial health while abroad is to budget. My favorite budgeting app is Mint, which keeps track of your (free) credit score, all of your accounts, calculates your net worth, and makes suggestions to improve your financial health. You can track all your purchases against your set budgets and add cash purchases and income as well. My favorite thing? Tracking the patterns of your spending so that you can adjust your budget and reminders about upcoming bills (No hard feelings, Spotify). As an hourly employee, the biggest downside to the Mint app is that it doesn't allow for bi-weekly budgeting, though it does offer monthly, bi-monthly, annual, and one time only budget categories.
  If you would like to have a printed version of your budget, I would suggest using one of the several free template add-on options for Google Docs. Many of them have an excel-like budgeting template that does the math for you and gives you the chance to see where you could be saving some money. Like Mint, these templates usually budget per month, but you can change the monthly headings to bi-weekly ones if that gives a better financial snapshot for you.
   If you are old enough to have a life abroad, you are definitely old enough to start investing for your future. For beginning investing, using apps like Acorns helps put small amounts away into an investment account of your choosing, starting at just $1 a month. The amounts do add up! Please be aware, though that programs like these have received a lot of criticism. If you already have a 401k or similar retirement account through work, make sure you are taking advantage of any and all of the matching options your employer may offer. You more often than not have to ask explicitly for the 401k employer matching. If you already have a Roth IRA or similar retirement account through another agency, make sure you meet with an advisor before you go abroad, to ensure you and your advisor agree on what type of mutual funds or stocks your money should be put in and get an idea of what your portfolio looks like before heading off.

No matter where your finances are when you step foot onto your destination, living abroad does not have to get you further behind in your financial growth or cause you to ruin your financial health in the name of your new life. Using these tips, you should be able to live the life you want abroad, while also getting to where you imagined in your overall financial life.

Good Luck
Myaia

Thumbnail Photo by Chris Lawton on Unsplash
Hi, I'm not affiliated with Spotify in any way, I just love the student discount! Also not affiliated with Starbucks, just admire their marketing and culture cultivation! Those drinks are so damn good. Also, not affiliated with Mint or Intuit, though I do use TurboTax to do my taxes. Not affiliated with Acorns and have never used it personally.