How To Manage Finances In The UK

Studying in the UK is an exciting adventure; however, students mostly encounter challenges when managing their finances. This is because the cost of living in the UK, especially for international students, is very high. Thus, it makes students ponder on how to manage finances in the UK. 

Fortunately, we’ve taken it upon ourselves to address this challenge, providing tips and strategies to manage finances in the UK. Therefore, if you are finding it hard to manage your finances as a UK international student, utilize this article to the end. Rest assured, this guide provides detailed tips and strategies on how to budget and manage your finances. Without further delay, let’s get started with it! 

Understanding What Student Financial Budgeting Is

Student financial budgeting is a plan to amend the rate of expenditures like rent, food, tuition, etc, ensuring their financial stability during school sessions. It involves crafting a detailed financial plan while considering the rate at which money comes into their account. Thus, it helps student spend per their revenue.

Budgeting finances is one of the important things students, especially international students, should learn before resuming school. However, many students fail to see the importance of the skill.

Nevertheless, it’s worth noting that managing your finances as a student provides numerous benefits, including mental and financial stability. Moreover, keeping track of your finances and expenses will reassure you that you are spending on the necessary things you need to survive in school.

International Student Expenses In The UK

Compared to local students in the UK, international students are prone to spending more. This is because they tend to spend extra money on expenses such as Visas, tuition fees, and many more. Nevertheless, here is a general view of what international students will be spending. From relocating to and staying in the UK, here is what you need to know:

Primary international student expenses in the UK

Using the word primary, we meant the essential or compulsory things that you’ll have to spend on as an international student. Identifying these primary expenses is one of the first steps to creating a plan on how to manage finances in the UK. Now, let’s take a look at the primary expenses:

• Visas
• Tuition fees
• Rent
• Foodstuffs & Groceries
• Bills & subscriptions
• Transport
• Course materials 
• Health Insurance
• Salon expenses 
• Clothes, dresses, shoes, etc.

Secondary international student expenses in the UK

Here is a list of things student spend money on, but they are not of much importance. Regardless, understanding and knowing the expenses is part of the procedures for managing finances in the UK.

• Night-out expenses 
• Eating out 
• Cinema tickets
• Festivals expenses
• Gym membership 
• Amazon, Prime, and Netflix Subscriptions 
• Travelling expenses
• Hotels expenses
• Gifts and Charity
• And Many More!

Read Also: Finding Student Accommodation in the UK as a student

How To Manage Finances In The UK As An International Student

Now to the main question, how do you manage your finances as an international student? 

Here, we’ve provided the best practices for managing finances in the UK as an international student. So, let’s get started:

1. Identify Your Source of Income

One of the best practices for managing finances in the UK is sourcing a stable source of cash. Identifying your source of income enables you to create a realistic budget and plan for the future. By understanding how much money comes in, you can seamlessly budget for your needs and wants.

2. Track Your Dept-to-Income Ratio (DTI)

This involves managing your cash inflow and the money you plan to borrow. Better said, it involves calculating and dividing your average cash inflow by the depth of your payments, ensuring that your income will suffice for the debt. Moreover, the best practice for this approach is ensuring that your debt is 20–35% of your average income. Thus, this ensures that after clearing off your depth, you are left with at least 65% of your income to cater till the next alert.

3. Set Important Financial Goals

Many students tend to set unimportant goals upon getting to school. This mostly happens with international students; they would want to buy and try almost everything out because they are new. However, this isn’t a good financial plan. It’s important to know that your primary purpose for going to the UK is to study and not to explore the cities. Therefore, your financial goals should focus on essential expenses that will favour you academically.

4. Stick To Your Financial Goals

Setting a goal is one important approach to managing your finances; but what is the point if you don’t stick to it?

For effective financial management, one has to stick to the plan; because the plan has been made to guide you financially. Therefore, going out of plan may result in a financial crisis where you might go broke and sometimes have to borrow to sustain yourself.

5. Join Referral Programs

As an international student studying in the UK, joining referral programs proves to be a valuable strategy for managing finances. This approach provides products and services at a discounted rate for the referrer. In addition, it also serves as a source of revenue for students, especially those who are not financially buoyant.

6. Seek Student Discounts

Seeking discounts is another strategy for managing finances. In the UK, most stores sell at discounted rates for students on anything they are purchasing. However, a university-issued student ID is required to verify that you are a student.

In addition, you can also find products at discounted rates on online market platforms. These platforms most often offer discounts of up to 60%.

7. Bus Pass

In the UK, a bus pass is a ticket that allows individuals to ride a bus for free. Therefore, getting a bus pass will sort out transport expenses, allowing you to save money for other things. 

However, applying for a free student bus pass can be challenging, especially for an international student. Nevertheless, Here is a quick guide on how to get a free bus pass as an international student in the UK.

8. Adjust your budget

Consider making adjustments to your budget. This means cutting short your budget and spending on what you are greatly in need of. Among the things you can cut short are:

• Monthly subscription: you could cancel or share the subscription with friends to save costs.
• Accommodation: Perhaps you love staying alone, you can adjust by having a roommate(s).
• Transport: You can book a cab with your friends and divide the price among yourselves. Also, chances are you and your friends own a car, you can both use one car, reducing the frequent purchase of fuel.
• And many more!

9. Scholarships and Funding

There are numerous scholarship programs available for UK international students. Utilizing these scholarship programs will aid in financial support. Most scholarship grants cover all financial needs during studying. Therefore, as an international student, researching and applying for these opportunities is one of the best tips for managing finances in the UK.

10. Increase your income

Consider increasing your income by finding part-time work. In the UK, there are tons of part-time jobs that international students can try without having a downfall in their studies. However, as an international student hoping to work while studying in the UK, there are a few things you should take note of:

1. Check your visa regulations to ensure they allow you to work
2. Consider finding out if your institute allows students to work
3. Search and apply for jobs that won’t affect you academically

There are more rules and regulations governing international students’ eligibility to work in the UK. You can consider visiting GOV.UK for detailed information.

Read Also: British Culture: How To Adapt As An International Student

In Conclusion

Managing finances in the UK is one of the biggest challenges international students face while studying. This is because they fail to understand how to manage finances, as it requires a careful plan and smart decision-making. 

Nevertheless, navigating through this article, we are certain that you are equipped with the knowledge to manage your finances. However, it’s important to know that there is no reason to set a goal if you don’t stick to it. Therefore, to ensure an effective outcome on financial budgeting, ensure you stick to your goal.