Budgeting is a crucial area for many international students. This may be the first time they have had to manage their own money, they may have higher costs than at home, they may have a large sum of money they need to manage over a long period, and they may not understand what costs they will incur in a new country. International education practitioners should understand how to help international students navigate these challenges and manage their money more effectively by creating and following a budget.

This topic will discuss the following key themes, which reflect areas than can be stressors for new international students:

• cultural influences on international learners’ financial management

• common budgeting issues for international students
• how to help students budget, save money and find discounts
• where to find resources and support.

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The Hofstede (1997) model is a way of understanding the culture of a country based on its cultural values. The model can provide a useful framework for understanding how cultural differences influence how international students manage their money. 

A key cultural value that may influence financial management is “power distance”, which defines how social inequality is perceived and accepted in different cultures. In high power distance cultures, children are raised with a great emphasis on respecting elders, which is carried through to adulthood. This may result in young people from high power distance societies having less experience exercising independence, initiative-taking and care in their financial management. Students from these countries may also be more vulnerable to financial exploitation and be less likely to report financial problems if they fear it may risk their immigration status.

You can view power distance indices for countries around the world here. Consider your international students’ cultural context if students are having difficulties managing their money. How might their home country’s power distance be influencing their behaviour?

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Below are some common budgeting issues that other practitioners report their international students have had, along with some ways that you can help support them.

3.1 Underestimating the cost of living in Aotearoa

One of the most common issues for international students is not understanding how expensive their life in Aotearoa will be, and therefore not budgeting accordingly. Many students may simply assume the cost of living here is similar to their home or other countries they have visited, without researching costs in the particular location and institution where they will be studying. Recent student surveys have identified cost of living is one of the key negative aspects of their experience in Aotearoa.

Here are some ways that you can help students prepare for the cost of living here:

• Encourage students to talk to other students at your institution or family/friends here about how much things cost before leaving home.
• Refer students to NauMai NZ ‘What things cost in NZ’ and Numbeo for up-to-date comparisons of cost of living around the world.
• Students may come from countries where the cost of basic items (e.g., food) does not vary a lot among shops, or through time. Make sure students understand that in Aotearoa, the price of a product can vary widely depending on where you buy it, and prices can change week to week. Help them find cheaper places to shop and teach them how to shop for discounts and sales.
• Make it clear to students that there are regional differences in cost of living. For example, Auckland and Wellington have very expensive accommodation, but cheaper international food markets than regional centres. Heating bills will be much higher in winter in the South Island and Wellington than further north. If you can, give students good, up-to-date and honest cost of living information on your website. 
• If you have a budgeting support service, encourage students to use it, especially if they arrive in summer and need to prepare for winter.

3.2 Underestimating the cost of transport

Another common budgeting problem that new international students have is not understanding the costs of transportation in Aotearoa. For many students, public transportation here will be more expensive and less reliable than it is in their home country. In regional areas in particular, older students may find they need their own car. 

To help students prepare for these differences:

• Make sure students understand what forms of public transportation are available and how easy they are to access (e.g., what areas they service and how frequently services run). 
• Be realistic in your communications about whether students will need their own vehicle, and what they will need to budget for their transport needs.
• At orientation, let students know what discounts they can get on public transport by using their student ID or other discount card.

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3.3 Facing unexpected costs

Postgraduate students arriving with families are particularly prone to facing a variety of unexpected costs when they arrive. For example, families from warmer climates may need new shoes and winter coats. To support these students:

• You might consider starting an online group for postgraduate students with family, where new students can ask questions (even before they arrive), and current students can post advice and experiences.
• Make sure students understand that if they rent, they will need at least 2-4 weeks bond, plus 2-4 weeks of rent in advance. This can put a substantial stress on a student’s budget if it’s not anticipated and budgeted for.

3.4 Not opening a bank account before arriving

Most New Zealand banks will allow students to open a bank account from their home country before arriving here. This can be helpful for many reasons, as a bank account is often necessary for students to rent accommodation, find a job, and more.

Here are some tips to help prospective students understand why opening a bank account in advance can be helpful.

• Students may not understand that they can’t just walk into a bank here and expect to open an account immediately. Make sure they know that if they don’t open an account before they arrive, it may take several weeks to get an appointment and open an account. 
• Also make sure they know that many places in Aotearoa are now cashless, so having a debit or credit card will be very useful. Depending on where they are from, this could be very different to what they’re used to at home.
• Banks will require proof of address to open an account. For students who will be staying in a hall of residence or other campus accommodation, you should provide them with this documentation. It is more difficult for students who will be flatting or renting, but many banks will accept a letter from an education provider stating that the student is enrolled and will be studying at your institution. If you provide this service, make sure your students know this, so they don’t think proof of address is a barrier to opening an account.
• See NauMai NZ for more information for international students on banking options in New Zealand.

3.5 Not knowing where to go if they need immediate help

Undergraduate students on a student visa should arrive in Aotearoa with adequate funds, as required by Immigration New Zealand. However, some international students may still encounter financial difficulties while they are here for various reasons outside their control. It’s important that students know what support is available, and that they don’t feel they have to manage their financial difficulties on their own.

• Many institutions have a hardship fund, or offer other forms of financial support (e.g., supermarket vouchers) to help students experiencing temporary financial difficulties. Be sure students know what support you offer.
• If you have a budgeting support service, encourage students to use it, preferably before they are in crisis. If your institution does not have this service, refer students to another trusted service such as MoneyTalks or one of the other services listed here that provides free, confidential budgeting advice.
• See the Financial Challenges topic for more information about supporting international students through financial difficulties. For secondary school students, an effective pastoral care system will encourage learners to share anxieties in relation to finances. These anxieties may relate to the student’s own management of money or to their parents’ changed circumstances.

3.6 Not having the right insurance

A critical part of budgeting is having the right insurance so you can be sure that you can cover unexpected expenses. Before students arrive, make sure they have adequate information about what insurance policies they may need (e.g., health, care) and what potential costs they need to be prepared to cover if they don’t have insurance. Medical care in particular may be much more expensive here than in their home country.

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4.1 Budgeting tools

For many international students, this may be the first time that they have had to look after their own money. Working out a monthly budget is particularly important if a student is managing a large amount of money that has to last for a long time. You may need to support them to create and use a budget so they can manage their finances effectively.

Here are some budgeting tools you can share with students:

• NauMai NZ has great budgeting advice and more resources for students.
• The NZ Retirement Commission/Te Ara Ahunga Ora, a government-funded, independent agency, offers financial advice and tools through their programme Sorted, including an online budget planner: Sorted – How to start a budget.
• MoneyTalks has several simple budget worksheets and provides free, confidential budgeting advice.
• This article also has a list of the essential and non-essential costs faced by most international students, so students know what to include in their budget.

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4.2 Saving money and finding discounts

Helping students identify ways to save money and find discounts is a great way to help them budget and to relieve financial pressure. Here are some student discounts that you could make international students aware of during their orientation:

• Student ID: Simply presenting a student ID can unlock a raft of discounts on everything from food to public transport and movie tickets. Suggest that students show their ID when buying tickets somewhere new, in case there is a discounted rate.
• Students’ associations and clubs often offer discounts for members. There may be a small sign-up fee.
• StudentCard is New Zealand’s best-established student discount membership scheme. They have negotiated discounts with dozens of big-name retailers as well as smaller local businesses. A card costs $20.
• ISIC card has many discounts on everything from travel and tours to books and language apps.
• UNiDAYS is free for tertiary students to join, and offers discounts on online fashion and health and beauty.
• StudentBeans is another scheme for tertiary students with some deals for online shopping. It does not include many local businesses, but does include major retailers.
• Banks: Most major banks offer some kind of tertiary account package. The specifics (and eligibility criteria) vary but often include fees-free accounts, discounted loan rates, and interest-free overdrafts. Westpac offers a student account package that can include a New Zealand account in a student’s home currency. ASB also offers to package its tertiary account with foreign currency accounts for international students.
• Phone & internet: Some phone and internet service providers offer deals with a student ID or StudentCard. Be sure to tell students about the many free Wi-Fi spots throughout the country in public libraries, cafes and other public spaces.
• Technology: Apple and Microsoft offer discounts on products for students on their websites. Samsung also has a student discount scheme with deals of up to 50% off RRP. Many institutions offer Microsoft 360 for free to students, so be sure to let your students know if this is the case.

This Stuff article has a range of other discounts that students can find in all the major centres and some regional ones.

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This topic has helped education practitioners understand how to help international students create and follow a budget, as well as ways they can save money. You may also want to read the Financial Challenges topic to learn more about helping international students manage their money.

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Thanks to Unmesha Veetil (WinTec) and Simone Freeman (University of Otago) for their extremely helpful contributions to this topic.

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Geert Hofstede, Cultures and Organizations: Software of the Mind. 1st edition, McGraw-Hill USA, 1997

Managing your money | NauMaiNZ