Studying or settling abroad figures at the top of most millennials’ wishlist. Moving overseas is associated with better work opportunities, financial stability and therefore better lifestyle. Fortunately, many aspirants are able to achieve all these and more.
But dreams come with challenges too. Most Indian students prefer US or Europe for advanced studies. When they are residing there, they have money in rupees in their bank accounts but they have to spend in euros or dollars. Managing finances in your chosen country, if you are not earning in that currency, could be a daunting task. Of course, with time, they do learn to tackle that. A few students and couples share their finance management experiences with us.
DISPARITY IN CURRENCIES
Simply knowing currency values and conversion rates is not enough. For those who have newly shifted to a foreign country, it is very important to plan out well the monthly expenses. But in the initial days, one does compare the two currency rates.
Mahi Kittur, who is pursuing MS at the University of Paderborn in Germany, tells us how she used her money wisely. Says she, “Due to the disparity in Indian and German currencies and the high living costs there, before buying anything, I would convert the expenses into Indian currency and see if it was worth spending that much. I would spend only on essential requirements. A good chunk of my money goes towards the room rent which is 350 euros, meaning almost Rs 25,000. Add to that the money spent on transport and groceries. So it was pretty tough to manage initially.”
Dharti Deshkulkarni, who pursued MS in Ireland and is currently working as a User Experience Designer in the US, says apart from the new culture, handling finances in foreign currencies also takes some time and skill. “We Indians have a mindset of converting dollars or euros into rupees because that is the only way we can relate to money. One small water bottle costs around 1.5 euro, which is more than Rs 100. For me, it was tough to think of spending that much money. It was when I started working as a lab assistant that I understood the balance between earning and spending in euros. So I was conscious, but not stingy, when it came to paying for food and basic requirements.”
But if you thought only students have to worry about the expenses in the host country, think again. There are many working singles and couples who are in the same boat. Debolina Sikdar worked as a Quality Manager at a bank in India before moving to London with her spouse in 2017. She is currently working as a Business Solution Analyst in an oil industry company. During her stay in India, she felt the rent she paid in Mumbai was high, but after moving to London, she realised the level of disparity. She explains, “If I convert the same amount of money I am earning here in Indian currency, then it would be six times more along with London City Allowance, which sounds nice. But out of my total salary, around 40 per cent goes into taxes and when it comes to rent, I pay around 10 times more than what I used to pay back home.”
“In India,” adds Sikdar, “A Basmati Rice packet costs around Rs 70-80 for a kg but here, the same, when converted into rupees, would come to Rs 250. Only when one lives and earns here, does one realise the level they must match up with.”
So the simple solution, says Abhishek Patil, who is working as computer electronic engineer in the US, is not to convert your expenses into Indian currency. When he moved to Georgia to pursue MS two years back, he spoke to a few Indian seniors at his university to get clarity on expenses. “The first thing my seniors told me was to never think of conversion as it would restrict me from buying basic and essential necessities. The feeling of disparity will always be there if you think the money is coming from India. Once you start earning in the same currency, the disparity is settled,” he says, adding that this is not the case only with students, but even with tourists.
LEARNING FROM MISTAKES
With the differences in the currency values, there are possibilities of miscalculations, buying products out of impulse or getting groceries in bulk quantities leading to wastage, which too is a kind of loss. Deshkulkarni shares an incident on the same lines. “I had been to a local store and bought a bunch of bananas for one euro. I thought they were of good quality, but they weren’t fresh at all. That’s when I realised I need not buy anything, just because it is economical.”
Patil and his roommates in Georgia too had their share of miscalculations which taught them to shop for local foods in small quantities rather than stock huge. “Initially, every month, one of the roommates would go with seniors to buy groceries for everyone and the bill was divided later. Since we would go once a month, we bought groceries in bulk and stored them. First few days, we would cook but after the course got hectic, we would order food to save time. After a few days, vegetables in the groceries would go waste though lentils and pulses weren’t a problem. Once we noticed the wastage, we started getting groceries in limited quantities. We opted for more locally available vegetables,” he says.
Sometimes out of peer pressure, the youngsters end up paying for things they don’t intend to consume. Surya Naidu Sarvepalli, a student pursuing a Masters in Analytics at Massey University in New Zealand, learnt how saying no is important. “Earlier, when people invited me to have coffee with them during breaks, I would buy a cup of coffee thinking it would be mandatory. Since I am not a coffee person, after a month, I started feeling the pinch and decided to only accompany them and not drink the beverage. I regret spending $5 on a coffee which I didn’t really enjoy. To be able to say no against the peer pressure was something that made me conscious,” he says.
GETTING FAMILIAR WITH NEW BRANDS
While staying in a different country, getting familiar with new brands and products can be a subtle challenge. At such time, Indian groups around the globe on social media can help you choose from among the pool of various brands. Sikdar shares an experience how social media came to her rescue. “A lot of trial and error had to be done to learn about new brands and products. For instance, we spent some money on trying out different brands of ghee but they didn’t go well with our palate. So I put a query on Indian social media groups on ghee brands. I got various suggestions that helped. With the presence of such online groups, things get easier,” she points out. She also adds that since she couldn’t find any brand equivalent to Indian tea, she opted for Jasmine tea that is popular in London. “This way, you save money, instead of experimenting and spending unnecessarily,” she informs.
Smiriti Srivastava, a student pursuing MS in Nanyang Technological University in Singapore, seconds Sikdar. She too relied mostly on social media and online product reviews instead of buying and regretting later. “Social media is extremely powerful. The online influencers reviewing the products gave me a good idea about the culture there and what I could use. Also, some suggestions from university friends and even local people helped in learning more about new brands. So I bought only what I thought was right for me,” Srivastava says.
Megha Gaonkar, who works as an IT professional in the US along with her spouse, adds that the segregation of organic and inorganic products in stores helped them save money as they knew what they wanted and only bought that. Adding to it, Sarvepalli says that with more supermarkets in Wellington, there are options galore and that could confuse you. But he didn’t get hassled by it. “With limited options in Indian stores, we end up trying more brands from supermarkets. Here, I wouldn’t go with absolutely unknown brands. I would rely on suggestions by friends and that way saved money,” he says.
MANAGING AS A FAMILY
Finance management in a different currency involves a long term plan. A single earning member instead of two generally tips off the balance. In most cases, with the shooting rates of rents, daily groceries, occasional tours and emergencies, more earning members are needed in the family. Explaining this concept, Sikdar says, “When you are living in a family abroad, it is quite expensive as the load will be on only one person, if one of them is working on contract basis, like in our case. Further, the daycare for babies is around 350 pounds a month which is steep. So before having a baby, we plan to buy a house as it would make sense to pay off the loan EMI instead of spending money on expensive rents.”
For Gaonkar who is earning along with her husband, it is easier to balance things. She says, “With two earning members, we see to it where we can save more, without being stingy. As far as starting our family is concerned, since we both are miles away from our folks, we will be on our own. I might ask my mother to come for a few months but later mostly it’ll be a hired help or daycare looking after the baby. Starting a family won’t be an issue but only once we are done paying our educational loans.”
Then one has to account for the taxes that are cut from your salaries, says Deshkulkarni. “Even when you are earning in dollars, a major hit comes through the taxes. Since my husband and I both are earning, one takes care of the bills and the other’s income goes for savings or is splurged on occasional trips.”
She also adds that one has to really think well before starting a family. “As we don’t have a family or an immediate relative here to depend on, we will be fully dependent on nannies and daycare which are expensive. For the same, substantial savings are required,” she points out.
Srivastava agrees. “Savings and buying a house are very important apart from investing in good family policies in Singapore banks. Indeed proper research in terms of family plans and education for kids provided by the government, can lay a strong foundation for the future.”
So there are challenges in living abroad but youngsters are prepared to take them head-on. Money matters, and so does mindful living.
