Mission to Save Money (Part 1): My experience of budgeting

It is a well known fact that your finances are not infinite whilst on your year abroad, and whilst on the one hand we would all like to spend our money on travelling or going out and enjoying ourselves every evening, on the other we feel a strong sense of responsibility. So we have to spend wisely in order to pay the rent, buy our weekly shop and, above all, not have to call our parents a month before returning home to ask for a loan, making promises to repay them somehow, sometime. Let's be honest: that's never going to happen.

The fundamental issue with Erasmus is that the funds received from the institutions will theoretically only cover your rent. They are definitely not sufficient to cover the rest of the average student's outgoings; travel costs, bills and food. One solution could be to ask for help from your family; you commit to paying for your own food, bills and travel costs, whilst your parents help by paying your rent. Most of the time this is what happens, but it seems that, usually around twenty years old, a threshold is reached and with it comes a sense of responsibility and an unwillingness to ask for or receive help from parents, instead wanting to manage everything alone.

And this is where your budgeting ability comes in.

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You have to find a strategy to spend your money wisely and stay within your monthly budget. It's easy enough to say, but what about doing it?

Firstly, you have to bear in mind that your expenses will vary hugely depending on your destination. You can be the best budgeter in the world, but if you are going to be living in one of the major European capitals, like Paris, Berline, Lisbon, Barcelona, the cost of living will be much higher. Obviously the financial aid you receive from the university will reflect your destination.

I must say that I was very lucky with my Erasmus experience. The cost of living is very low in Coimbra, a small city in Portugal, and this helped me a lot. I had a lot of expenses to begin with and initially I was filled with desperation. I was pretty sure I would have to live on bread, pasta in broth and salad for the majority of my stay. Fortunately, by following a few little tricks, I survived, managing to find the balance between necessary expenses and leisure.

Speaking from the perspective of Italian universities, it really is difficult to start your year abroad with money in your pocket. Often the monthly contribution will be given to you a month into your stay, sometimes even two months in, so unfortunately until then you will have to rely on your savings or help from your family.

My first step was to buy myself a pocket diary in which I would write my monthly expenditures as well as the day-to-day.

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Unfortunately, your first month of planning will probably be difficult; you will find yourself incurring a lot of (unexpected) expenses. For example, if you are fanatical about cleaning, you will have to buy cleaning products for your room, or stocking your home with items that are missing; pots and pans, plates, sheets and bed covers... It all depends on what you find - or not - when you arrive at your new home. I would always advise you to check with your host before you go if possible.

Almost as soon as I had arrived, I worked out what my fixed monthly expenses would be, on top of rent and bills - for me this included public transport and gym membership. Once I knew that information, I was better able to understand how much money I would have to spend on variable expenses. I divided my pocket diary into two columns: leisure and provisions. I would then note down everything I spent each day, enabling myself to keep an eye on my outgoings on the micro level.

In terms of food, it is difficult to establish your budget in the first couple of months as you are still working out which supermarkets are cheapest, what you want to buy and how much. From my experience, after two months experimenting, I was able to establish a good budget for my food shop.

Ultimately, the goal of all this "homemade" planning was to be able to put as much money aside as possible for the things I wanted to do for me: travelling, going out with friends in the evenings or even shopping. The amount you will want to spend on these activities will be significant - as it should be. You don't want to put a limit on these kinds of expenses, that would be absurd! You might organise an unexpected trip with your new friends, buy more souvenirs than you expected, go to a concert or buy a round of drinks for your friends one evening. The point of Erasmus is to enjoy yourself and to experience life - and you can't put a price on that.

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For these expenses, use your senses of judgement and responsibility to guide you. If you don't have those senses yet, now might be a good time to think about learning them!

You will almost certainly have access to a debit or credit card; paying by card is definitely more convenient but it also has it's disadvantages. Paying by card and not physically touching money can give you the impression of having a lot more than you really do, and that you are spending less than you really are. Regardless of the amount you are paying, you will never have a true perception of how much you are really spending.

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You would notice the difference between paying €30 in cash for something compared to paying €30 by card. In my experience, it's a good idea to keep your card spending under control by using an app on your phone or computer.

There will be some purchases that you can't make by card, for example buying a coffee at a bar or something from a market stall. If you do have to withdraw cash, you will almost certainly have to pay commission and/or a withdrawal fee. Initially, I made the mistake of withdrawing between €10 and €30 at a time, and each time the bank charged me €2.50. I soon learned that the best way to avoid this was to withdraw a larger amount each time, thus avoiding simply throwing money away in the form of a withdrawal fee.

So this is my practical and, I hope, useful advice on how to manage your expenses and saving money whilst you are studying abroad!

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