How To Manage Your Finances While Living in the US

Most international students dream of studying in the US, but few have the opportunity to actually make it a reality. And without a doubt, it’s an exciting and fun experience. There are things to look forward to, like world-renowned academic programs, athletic opportunities, and legendary reputations. But it is also easy to lose track of your expenses and find yourself graduating with a mountain of debt if you are not careful.

Living far from home can be both thrilling and stressful, but it also means you are responsible for yourself. While this can be overwhelming when you’re moving to a new country, it is also something you can learn to do. It’s important to take some efforts to prepare financially before you start school because money is one of the main sources of anxiety for students. Here are a few ways you can get financially ready.

1. Plan a budget

A budget goal is simple – ensure you have enough money to cover your costs and that more money is coming in than going out. Although budgeting might sound boring, it is absolutely critical that you do it. With daily practice, you will soon discover how this can be a helpful tool. Moreover, it doesn’t have to be super time-consuming or complicated. A budget is a summary of your assets, income, and expenses, including:

  • Savings – The amount that you have on hand to cover the costs of your year ahead.
  • Income – Money from a scholarship, received from family members, or earned through a part-time job.
  • Fixed expenses – Things you have to pay for each month like rent, utilities, internet and cellphone charges.
  • Miscellaneous expenses – Flexible costs that can range from basic groceries to money you spend on recreation.

Set a monthly limit on how much you can spend for these categories and see if you can stick to it.

2. Manage credit carefully

It is common to use credit cards over cash in the US, but as a college student, you should be prudent with it. Make sure you don’t build up an overdraft by only using what you need and setting up a repayment plan as part of your budget. An automatic plan is a great way to ensure you cover your minimum payments by the due date.

3. Create an emergency fund

Life is unpredictable, and you must prepare for emergencies and avoid unexpected debt. Get in the habit of setting aside a part of your paycheck into a savings account. Most people go for 10% because it is a good benchmark and easier to save. Whether it’s an essential car repair, a pet illness, or something major, you must be ready to pay it off. You will pay interest and fees if you rely solely on credit to help you through an emergency.

Those paying off debts can start small and put in 5% of what you get into a savings account. You can expand your emergency fund once you have paid off your debt and begin to earn more money.

4. Make use of offers and discounts

One of the best ways to save on expenses is to use the many discounts and offers available exclusively to students. You can find these on-campus and elsewhere. Your student status may get you savings on food, transit, technology, shopping, insurance, cell phone contracts, and more. If a discount isn’t posted, make sure you enquire with the concerned authorities to not miss out on any offers.

5. Watch out for scams

With the advancement of technology, we have been able to reap many benefits. But there are also a number of threats to watch out for. Threats posed by scammers have only increased over the years. Scammers take advantage of young people living on their own, and it’s therefore important to protect yourself, your money, and your information, especially online.

Be mindful not to click on links from unknown emails, entertain texts from random numbers, share your account information with anyone you don’t know, or share information over public WiFi.

College is the ideal place to learn about financial management and build habits that will help set the stage for financial success for the rest of your life. When you have stable spending and saving habits, you can work toward bigger goals, like paying off student loan debt, traveling, and saving money for future milestones.

Even when you move away from home, you will be able to meet new people who can offer help when you need it. School counselors, professors, and student advisors are committed to helping students manage classes, anxieties, financial stresses, and social pressures. So if you ever need help, just reach out to those in your college, and you will receive some useful advice.

To explore your financial plans in the US, start a co-design conversation with Gradstar.

Date Published: Sep-04-2022

Our Dream Makers are expert listeners, educators, career consultants and student supporters. They co-design your study abroad experience with you to empower you to reach for the stars. Because dreams deserve a helping hand.

About the author

This blog was written by Gradstar Global Education.