Money guide for a child 5,000 miles away from home by Priya Sunder

It’s been a month since you left home to begin your undergraduate programme in London. You are consumed in an eddy of emotions—excitement, trepidation, worry, hope and joy. You said your first month had been “like drinking water from a firehose!” Pulsating city, demanding curriculum, international friends, clipped English accents, freshman parties, morning jogs along the Thames, heated debates in Hyde Park…. Life is coming at you fast and furious.

As you embark on this new journey, some things will change irrevocably in your life. The familiar routine of school, home, family and friends will give way to unfamiliar challenges and unbridled freedom, not to forget unwashed laundry and cold, insipid dinners.

And yet, some things will remain comfortingly monotonous when you come home for vacations—your bright, cheery room in Bengaluru; your dad’s inimitable bisibele bath; the familiar dampness of Leo’s (your golden retriever) nose, as he nuzzles against his favourite family member.

What will also remain is the financial wisdom you have imbibed over countless dinner table conversations.

You may already know this but this is the first time you are handling money independently, so indulge me in sharing this money charter with you. It will help you navigate the next 3 years, so you emerge financially anchored.

Make a monthly budget: It seems awful to impose restrictions when you have just earned liberty. However, a spending plan will put you in control of your money. You may not know the extent of your expenses right away, but 3 months of record keeping will help form a pattern.

Create bite-sized goals: Break down your annual budget into monthly and weekly goals and stay within those limits. Note down essential and non-essential expenses. Buying healthy food or a good mobile plan is essential. Buying a fancy phone is not. Spend on discretionary items only if there’s money left over from essential spends. Even then, don’t buy on impulse. Hang on to that desire for a week. If you still can’t get it out of your mind, go for it.

Control costs: Text books are expensive and college bookstores may not be the best place to buy them. Ask your seniors if they can sell their books for a reasonable price. Else, check websites like Amazon for deals. You can even download books on your iPad. Figure out the best meal plans. Avail student discounts on clothes, gym memberships, transportation, movies, concerts and festivals.

Set up a savings account: Choose a bank with the best interest rates, preferably near your campus or apartment. You can avoid travel expenses this way. Check for monthly fees and penalties. Move only what you need from savings to checking account each month, because savings earns you better interest. Automate this process, if possible.

Check your balances: Do this each week to ensure you are not exceeding your spending limit. Note down your ATM withdrawals. In an age of electronic transactions, unchecked expenses will catch you unawares. You must know what is being deposited, withdrawn and spent.

Say no to credit cards: Credit cards are avoidable debt. Delayed card payments create huge red flags for creditors. A bad credit report impacts your ability to borrow for a long time. If you must have a credit card, use it only for emergencies.

Buy a piggy bank: Put your daily change into it. Empty it out each quarter and deposit it in your bank. You’ll be surprised how much you have accumulated. Similarly, save all your bills and receipts in a shoe box. It will help you tally expenses with your ATM withdrawals, bank statements and expense sheet.

Start saving: We are funding your education today, but you will need to fend for yourself soon. Put away some money towards your future. I know it’s a long haul and you haven’t even started your first job. But if you saved Rs2,000 each month during the first 3 years of college, you can accumulate more than a crore when you retire. Small savings grow to colossal sums because of the magic of compounding.

Don’t loan money: If your friend does not repay you, you will lose both money and friendship. Ranjini, your cousin studying at Carnegie Mellon, says that if you are eating meals with friends or sharing a cab, don’t hesitate to split the fare; almost everyone is in a financially tight situation and will understand. You even have apps like Venmo and Splitwise that help you divvy up the bill. Do not give your credit or debit cards to your friends, and do not share password details with them either. Keep your cards, passport and other important documents in the portable locker in your room.

Find a job: Reach out to your university and other organisations for campus jobs or internships. Even though education is your top priority, working and earning will teach you financial discipline and provide a fillip to your job search when you graduate.

The next few years may well be the best years of your life. You will lose and yet discover yourself in so many different ways. As you weave your way through this Potteresque wonderland, remember you are not alone. I’m here to encourage and empower you to take charge of your financial future. That, in turn, will inspire you to be the change you want to see in your daughters.

Priya Sunder is director, PeakAlpha Investment Services Pvt. Ltd