After living in London for three months and looking forward to another six, I have learned some very valuable things about money and saving. In preparation for this year, over the last few years I have done my best to be frugal so as to save enough to have a good time abroad. I quickly found out my methods would fall short; I couldn't simply save up and assume I would have enough. I have to make a budget.
It is nearly impossible to stick to a budget in the first few weeks, as you are finding out just how much things cost. I didn't really know how much I would be spending on food until I started to go grocery shopping in my second week here. I now know that I spend, on average, about seventeen pounds a week on groceries, and then some extra when I eat out. It was harder still in the beginning because I didn't have a UK debit card set up yet; being here on a long-term program, I knew it would be useful to set up a bank account, so eventually I did. Before, I would just take cash out of Barclays (Bank of America has a partnership with Barclays so that when you use your B of A card at a Barclays ATM there is no transaction fee) and carry some around with me. In a way that is worse than carrying a debit card, because you see how much cash you have in your wallet and you think, "look at all this cash I have! I have plenty! So I can spend it!" Not true. As we all know, money does not grow on trees, and cash does in fact run out when you spend it. Shocker! Now that I have a debit card, I put a certain amount in my account every time I top up, and I simply aim to use it as little as possible (this is not always easy, but it is a policy that has worked in general so far). My spending has definitely slowed down from the beginning of the year, as I looked at my American bank account and remembered the existence of the exchange rate, which tends to hover around $1.60-$1.70 per pound.
Realising I cannot spend as much as I thought was a wake-up call; it will benefit me because it forces me to reconsider my priorities in the way of entertainment. I don't want to spend money on things I don't want to do because that is a waste; my experience will not be muddled with memories of bad films, bland cuisine and underwhelming travel destinations. Kind of like the word limit we have on essays here, it forces me to keep only what's really important and leave out the fluff. Keeping my priorities in order, I am beginning to think about my budget for 2015; How much will I spend on dining out? Entertainment like plays, movies, and museums? Travel? Where do I really want to go? What is the cheapest way to do it?
Living abroad is forcing me to examine my finances more closely than ever before, which I think is going to prepare me quite well for adulthood. Sure, DC may seem dirt cheap to me compared to here when I return, but that doesn't mean my habits will go away. After nine months of fierce budgeting, I will continue to consider my priorities and save as much as I can. The time for me to start paying off student loans feels like it's approaching faster than it was two years ago in some sort of scary temporal doppler effect, and I anticipate being glad I was able to hone my personal budgeting skills sooner rather than later.