Post by Bruna Oewel, GIC Peer Mentor 2021
With so many details to check before starting graduate school, it can be hard to make time to check your finances. Balancing your budget is key to make sure you have a smoother experience in graduate school.
You may have already talked with other students or visited websites such as Expatistan to check the cost of living in Irvine. If you can get an idea of how much things cost before moving, that’s great! Some of the previous articles in this blog can give you an idea about that, as well as other tips!
Ways to Manage your Budget Long Term by Muhammad Twaha Ibrahim
Ways to Manage your Budget Long Term by Blanca Rodriquez
Here are some of my tips:
Track your expenses:
As you get settled into your new home in Orange County (OC), the first step for your financial health is to keep track of your expenses. A lot of things might have a different cost in the OC area compared to where you lived before, and other information you got regarding costs might not completely match your reality.
You will have some one-time expenses, such as the security deposit of your new home and furniture. You might buy a car, or need to buy a textbook, so it is good to think in advance about your future needs and set aside savings for those expenses. Consider talking to your mentor and other people in your program to learn if there are particular expenses to prepare for.
Pay special attention to expenses that will be recurring. Start writing down everything you bought, the cost, and what it is for. I recommend keeping track of it on a spreadsheet, that will help you in your next step (budgeting).
Set up a budget:
Write down your expenses, and in what category they are, right after you buy something. If you do it later, you may end up forgetting it. Categories can be “groceries”, “restaurants”, “clothes”, “pets”, “laundry”, and so on. Since you probably don’t want to (nor even have the time to) spend too much time tracking your budget, you could let an app do that for you. You can use them even if you do not have bank accounts, or do not want to connect your accounts to the app. Here are some free options:
Peak Money (only for iOS)
If you do not have a bank account and are interested in opening one, check out this article.
Savings and financial goals
Once you start budgeting, you are going to figure out how much you usually spend on a given week or month in certain categories. You will also figure out how much you actually need to spend on your basic needs if you disregard all non-essential expenses. Based on how much you need to live, you can start an emergency fund.
The emergency fund is savings that you need to have to survive for a minimum of 3 to 6 months. It is really important to start saving for emergencies as soon as possible, so you can always be prepared for anything unexpected. Once that is set up, you can start saving for other goals.
You might need to buy more furniture for your home, you are maybe considering buying a car, and the plane ticket for your home country could be very expensive. Saving for all of that can be complicated, and could be almost impossible if you are living beyond your means. That is why budgeting will help you. If you include saving for those different goals in your budget, you should be able to achieve your financial goals soon.
Consider getting a credit card
If you do not follow your budget and tend to spend more than you earn, a credit card can be dangerous. Consumer debt is a big problem, and it is easy to fall into the trap of “free money” from credit cards. On the other hand, you can start building your credit history, which could help you long-term with lower interest rates if you have a high credit score. Credit history is one of the things that are considered in your credit score, so starting to use a credit card as soon as possible could help.
In addition, payment history and credit utilization ratio are even more important than credit history for your credit score. So make sure to always pay your credit card on time and in full every month. To do that, follow your budget and do not spend more than you have.
— If you would like to get more financial resources, or if find yourself in financial difficulties, check https://ssi.uci.edu/resources-scholarships/financial-resources/