Pursuing higher education opportunities abroad will offer aspiring learners access to well-known universities and renowned scholars and professors. Along with all the excitement, moving away to study also comes with significant responsibilities. You will have to become independent and learn various money management tips to avoid common financial mistakes. Here is a quick guide on financial mistakes to avoid as a student.

Key highlights:

• Top 10 most common financial mistakes made by students
• How to overcome common mistakes in financial planning
• Tips for saving money for students

Top 10 most common financial mistakes made by students

Making common money management mistakes can lead to terrible consequences. You may end up struggling to pay your tuition costs or have to find a less-than-ideal place to live to stay afloat. Let's explore the top financial mistakes you should avoid.

Top finance mistakes students must avoid

1. Forgetting to budget

Not creating a budget is one of the most common mistakes in financial planning. Without a budget, you can lose track of your spending and struggle to make ends meet. Create a detailed budget that covers everything - your tuition, accommodation, food, transportation, and fun stuff like weekend outings. Ensure you stick to it and avoid spending your money too quickly.

2. Spending without saving

It's tempting to celebrate your newfound independence by spending on entertainment, dining out, and shopping. However, spending all your money carelessly without saving can leave you struggling to manage sudden expenses such as laptop repairs.

Also Read: What should students know before studying in Ireland

3. Forgetting to create an emergency fund

Life is unpredictable, and emergencies can arise at any time. An emergency fund enables you to deal with sudden changes in your situation. Students can build emergency funds to help pay the EMIs on their education loans during emergencies such as the pandemic. The fund will enable you to continue paying your EMIs.

4. Not purchasing health and travel insurance

Many students do not realise the importance of having health and travel insurance while studying abroad. These policies help cover unexpected medical expenses and recover the cost of replacing lost luggage or a stolen passport.

5. Forgetting about student discounts

As a student, you can use your official student ID to enjoy discounts on everything from transportation to electronics. Most countries offer student concessions, enabling you to purchase coffee, laptops, books, groceries, and more for less. Forgetting to carry your student ID and not asking for available discounts can lead to higher spending.

6. Not finding the right accommodation

Students often choose between on-campus housing options and shared rentals. Dormitory costs often cover additional expenses like electricity, water, transportation, and internet. Generally, they are the most affordable. However, some cities may also have affordable rental options for students. Not looking for enough accommodation options is one of the most crucial financial mistakes to avoid. Give yourself sufficient time to evaluate your options and get the best deal to save.

Also Read: What students must know about IELTS 2024

7. Not exploring part-time jobs

Universities abroad allow students to pursue part-time job opportunities both on and off campus. You can find a way to earn some cash to help cover your expenses and support your lifestyle.

8. Eating all your meals out

One of the most common financial planning mistakes to avoid as a student is not thinking about your meal cost. Eating out, even at the canteen, every day can add up. If you have the space in your room, try cooking basic recipes that keep you nourished and full.

9. Not opening a local bank account

A local bank account in the country where you're studying can save you from hefty foreign transaction fees and make managing your finances easier. So, the first thing you can do once you fly abroad is find a local bank close to your accommodation to open a bank account.

10. Missing EMI payments

Several young learners use loans for students to finance their higher education. However, missing EMI payments can lead to penalties, increased interest rates, and a negative impact on your credit score.

Also Read: 5 tips for international students to boost their financial well-being

How to overcome common mistakes in financial planning

Understanding and acknowledging these money management mistakes is the first step towards avoiding them. Before you head abroad, ensure you thoroughly research the estimated expenses and budget accordingly. You should also track currency exchange rates and transfer money to your local account when the rates are favourable.

Tips for saving money for students

As a student, you can maximise your funds by finding smart ways to save money. Some of the best ways to save money include:

• Using public transport instead of taxis and private cars
• Cooking instead of eating out
• Avoiding a shopping spree and overspending

Financial planning will ensure you enjoy your student life. To fund your higher education independently, you can opt for a student loan. At Avanse Financial Services, we offer education loans with several benefits such as quick loan sanctions, 100% finance and more. For more information, please feel free to contact us.