Creating a budget for your upcoming ESL program is no easy task! While it may not be the most fun part of preparation for your trip, it will give you – and your wallet – the comfort of knowing that your English language program is not only possible, but also economical!
Step 1. Where is your money coming from?
Before you begin to make your budget, it is important to think about the income you plan to receive for your English language program. Do you plan to receive financial aid or scholarships, is grandpa going to give you a few bucks for your program, or do you have a job which you put all the proceeds into your “English Abroad” funds? Write down the list of inflows of funds you plan to receive and we’ll quantify them later.
Step 2. What do you need to budget for?
Once you have thought of your income, next it is time to think of your expenses. Not only do you have the program and flight fees, but you may plan to do other extracurricular activities. Do you plan to travel? Are you a night owl planning to go to all the nearby clubs, bars, and restaurants? Are you going to buy a gym membership? How is housing and food covered? These are important questions to ask yourself as you keep track of how much money you have, how much money you plan to spend, and how much you should have left over at the end of your English language program.
Step 3. How does the cost of living compare in your host country?
Now that you’ve got a few ideas on what items to include in your personalized budget, it is now time to think about the cost of living of where you are going. If you are going to a big city, be prepared to find items and activities more expensive. It is a good idea to investigate standard costs in your travel destination as rates can vary extensively from your home country to your host country. Think about these differences before creating your budget. Your English language school may be able to help you by providing an estimate of costs in the area.
Step 4. How to manage the exchange rate volatility?
So you are planning to travel overseas to learn English? Whether you plan to use the English Sterling, US Dollar, or Australian Dollar, the exchange rate may impact your budget and finances. Let’s first discuss, “what is an exchange rate?” An exchange rate is the value of one currency compared to another. There are many factors that may cause fluctuations in the value of the currency including interest rates, inflation, political environment, and the state of the economy. There are two types of currencies: pegged, and free floating. In either case, the exchange rate will fluctuate on a fixed-basis based on the value of another currency (pegged) or will fluctuate in value due to market forces (free floating). While we do not want get into the nitty-gritty of what factors influence the exchange rate, you should know that the conversion rate varies moment by moment, day by day, year by year. If you will be traveling to another country that uses a different currency, chances are you will be affected by the ups and downs of the exchange rate so plan appropriately and accommodate any fluctuation in the highs and lows. Check out the following currency converter to see what the real exchange rate is:
Step 5. How to create a budget for your ESL program
Now that we’ve discussed the important inputs into your budget, you are now ready to create your spreadsheet with your information. Remember, your results are only as good as your data so be mindful and detailed. First you’ll want to open up the spreadsheet we’ve created for you:
You will notice that based on this spreadsheet, the information is divided into expenses and savings so that you can budget accordingly. Be aware that some categories may not pertain to you, while in other cases you may need to include other information based on your circumstances. When you include your expense and saving information, you will notice that the spreadsheet will automatically calculate your total savings and total expenses. At the bottom of the budget spreadsheet, you can also see if you have any additional savings (or expenses!) beyond what you have already budgeted for.
Additionally, to keep track of your savings and purchases, you will notice that there are two columns for you to project your future costs versus your actual costs. Be sure to calculate all of your inputs based on the same exchange rate.