Gen Y Speaks: What studying in Singapore taught me about personal finance
Going abroad for work or studies for the first time can be a daunting experience, especially if you are young and haven’t had the chance to see much of the world before. I arrived in Singapore in late 2015 at age 16 from Indonesia to pursue my GCE A-Levels.
Going abroad for work or studies for the first time can be a daunting experience, especially if you are young and haven’t had the chance to see much of the world before.
I arrived in Singapore in late 2015 at age 16 from Indonesia to pursue my GCE A-Levels. It has been four years since that first day, when I anxiously waited for my Student Pass to be issued.
Now, I am a second-year Singapore Management University undergraduate. Daily life here has indeed become easier and it is amazing to feel like I have planted some roots, despite my struggles and doubts.
Much of getting settled down to life in a foreign country has to do with managing money matters.
DOLLARS, NOT RUPIAH
Many fellow international students fall into the trap of always converting their expenses back to their home currency. While this might be a natural thing to do, this mindset can result in overspending or underspending.
Take for example how I bought mobile data in my first few months in Singapore. I went with the packages I thought would match how much I spent on data each month in Indonesia. Since Rp 70,000 was how much I paid for data back home, that would be about S$7 in Singapore. It only got me about 1-GB of data to use for a whole month, which was highly inadequate.
I had tried to replicate my spending amount in Indonesia, which was misguided since data plans in Singapore are much more expensive.
I was better off reevaluating the available data plans based on their value and suitability to my lifestyle here. After measuring my Internet usage, I gauged that a 3-GB plan per month was a reasonable choice, seeing as I am able to access WiFi at school, work, and home.
The nature of currency exchange is that it is never fixed for long, so spending in local currency according to how much you think it is worth in your home currency is futile.
THE 50-30-20 BUDGET
Growing up, I never had regular allowances. I also did not go out much as a kid due to my innate shyness, so holding more than a few notes at a time for long was something I was still uncomfortable with at 16.
Imagine going from that to being able to access the only foreign bank account in your family. That one account holds all the money to cover school fees, utility expenses, groceries, and so on.
I was completely at a loss on how to handle this money because I never had the chance to learn how. I didn’t even understand the difference between the ATM card and a credit card.
One of the best solutions to this is budgeting.
The 50-30-20 rule is a good place to start. It suggests we spend 50 per cent on needs, 30 per cent on wants, and setting aside 20 per cent on savings.
Of course, this is not always possible if you don’t have a fixed allowance or if there are certain periodic big bills that are unavoidable.
In such a situation, be more flexible and adjust according to how much there is each month after the necessary expenses have been paid.
Adaptability is key to living abroad. It is also important to have some cash left from each month in case of emergencies.
I realised this when I unexpectedly fell ill with tonsil infection in 2016. It was during my junior college years and I was relieved I was able to pay for my treatment at the clinic with the money I had set aside for rainy days like this.
Keeping tab of your budget and spending need not entail keying into an Excel sheet every night.
There are now many useful and intuitive mobile apps that do the work for you, such as Seedly and Spendless.
The latter has helped me keep track of my expenses by allowing me to create a family budget, which my three siblings and I share. This means we can see each other’s expenditures, encouraging us to examine our expenses more critically and see budgeting as a team effort.
If you are an international student, you would most likely carry some debt, such as a loan you took out from a bank for your studies. Even though study grants awarded by corporations do not require monetary repayment if all conditions are met, the recipient would still incur a ‘debt’ in the form of an employment bond.
These are things that one has to keep track of, and not rely on your guardian or parents to do so for you. It is advisable to know for certain how much your debt is, so that you can take measures to pare down your debt.
DON’T COMPARE YOURSELF TO OTHERS
Living abroad, it is easy to become jealous of fellow international students who have greater spending power. Think students who frequent cafes without a second thought.
I have been in such a situation many times. Forcing myself to resist spending hundreds of dollars on a ticket to watch a Trevor Noah stand-up show was painful. Seeing some friends buy tickets to concerts once every few months made me feel that life was really unfair.
I have since realised that this kind of thinking is unwise. If you constantly compare yourself to others, you might risk jeopardising your financial position and racking up debts to sustain a certain lifestyle.
One misconception about international students is they are “filthy rich”. The stereotype that we all live in luxury is real and evident from the usual ignorant questions directed at us, such as: How many companies does my father own? How big is the house I live in?
It also makes a mockery of the actual financial stress international students face too. For the record: No, I do not get driven to school in a Ferrari and do not have three helpers at home.
I have learnt to not be bothered by such questions and focus on my own financial planning based on my own means, habits, and goals.
The best part of living abroad is being independent, or at least learning to become so. This requires good knowledge of personal finance.
Find out what is the difference between credit cards and debit cards. How does insurance work? What about housing and investing? One does not need a degree to learn all these — read up on personal finance concepts, join a club or workshop, or find a community to learn with.
By continuing to learn and upgrade ourselves, we will be more confident and capable of handling life’s uncertainties, be they financial matters or otherwise.
ABOUT THE AUTHOR:
Grace Suwidar is a second-year student at Singapore Management University's School of Social Sciences. She is also a student trainer in the Citi-SMU Financial Literacy Programme for Young Adults, which aims to equip those aged 17 to 30 with essential personal finance knowledge and skills to give them a firm foundation in managing their finances.