NYU London Money and Budgeting Before You Arrive in London (December 2016)
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Transcript of NYU London Money and Budgeting Before You Arrive in London (December 2016)
Guidance on how to draw up a budgetand how to use the NYU London Excelbudget spreadsheet.
FEATURES ADVICE
Student Budgeting when incollege
What is the cost of livingin the UK?
DECEMBER 2016
MONEY AND BUDGETING:BEFORE YOU ARRIVE IN LONDON
Just what is the cost of a loaf of bread?How much money should I plan tobring over?
IINFORMATION
WELCOME TO LONDONBy Chr i s Sh ia
Dear students,
My name is Chris Shia and I work in the ResLife team here at NYU London. I have a background inEconomics and Finance and I am interested in money management and budgeting. As a bornand bred Londoner I have gathered a wealth knowledge of living in London and moneymanagement is always something that any Londoner or visitor should have at the forefront oftheir minds as it can really impact on your time in the UK's 'Big Smoke'.
Any student studying away for a semester or for a year should adequately prepare for the manycosts associated with studying abroad. London is well known to be an expensive city but it is alsoa place that has an incredible number of ways you can save money and spend less, many whichare little known to visitors. At NYU London, we will be providing you with local knowledge on howto keep your costs down throughout your time in London. However, there are some things thatyou can do BEFORE you arrive in London and there is also specific information to be aware ofsuch as the cost of living, which will be useful when creating a realistic budget. We will providemore information about how you can save money in London in the coming weeks and when youare in situ in the city itself.
Join the Spring 2017 NYU London Money Saving Facebook groupfor ongoing tips and advice
THE COST OF LIVINGIf you would like to get an idea about how much certain goods and services costs in
London then visit Numbeo (www.numbeo.com), a user contributed data website. All the
costs are in the local currency (£) but they are relatively reflective of the cost of living and
you can even compare the price differences with your own city including New York City.
You can quickly see that certain things in London cost a lot more than elsewhere
although some results may surprise you.
DID YOU KNOW?
in the UK and Europe all
retail prices include taxes
so that is the final price
that you will pay at the
cashier.
PAGE 1 BEFORE YOU ARRIVE
Many people get confused when discussing the strength of a currency. The nominalvalue of a currency has NOTHING to do with its strength and it is rather arbitrary. Theway to analyse a currency's 'strength' is to compare a currency's worth in relation toother currencies over a period of time. The fluctuations in currencies makes goingabroad more or less expensive than it would have been previously. If your homecurrency strengthens against another then with all things being equal you will be ableto buy more goods and services in the country you would like to visit. You have morepurchasing power! What really makes a place 'expensive' or 'cheap' is the cost of living inthat place. This is what students should focus on when going abroad. So when someonestates that the Pound is worth more than the Dollar you will know exactly what to say!
Economics101: Is the
Poundstronger than
the Dollar?
PAGE 2 BEFORE YOU ARRIVE
COSTS IN LONDON
One can spend a lot on eating out in London but the city has an array of restaurantssuiting all budgets. Obtaining a diners card like a Tastecard (www.tastecard,co.uk),
which you can get for as low as £30 can save you a lot on eating out, making eatingout worthwhile and affordable. There are of course cheap eats like PrixeFixe (http://www.prixfixe.net) where you can get a good quality 2 course set meal for aslittle as £10.90. Alternatively, you can opt for a more typical restaurant like Ciao Bella(www.ciaobellarestaurant.co.uk) where pizzas or pasta can cost £8/£9. ‘Greasy spoons’(similar to diners in the US) also exist like Cafe Kozzy (http://tinyurl.com/jkqpn9p) thathave a limited presence online and where one can eat for around £4 or £5.
Expect most restaurants to automatically add tip (10-15%) onto the bill although this isonly discretionary. Be aware that London has a high amount of expensive eatingestablishments and you will be challenged (with our help) to seek out the good valueplaces if that is what you are looking for!
There are quite a few supermarkets near to the residence halls with Iceland(www.iceland.co.uk) and Lidl (www.lidl.co.uk) catering for the budget conscious, Tesco(www.tesco.com) and Sainsbury’s (www.sainsburys.co.uk) being ‘low to medium cost’and Waitrose (www.waitrose.com) more ‘mid-to high cost’. For your own perspective,
do have a look at the comparison website mysupermarket (www.mysupermarket.co.uk)
that lists and compares the prices of products sold in several UK supermarketsincluding those mentioned above. Most supermarkets also deliver to your door so youmay be able to seek out the best deals by shopping online. It is worth noting thatgroceries in the UK and Europe tend to ‘go off’ or ‘out of date’ quicker than groceriesbought in the US, which is food for thought!!
EATING OUT
SUPERMARKET (GROCERY STORES)
PAGE 3 BEFORE YOU ARRIVE
COSTS IN LONDON
Going out to bars and clubs does not come without a price in London. Alcoholic andnon alcoholic drinks are not particularly cheap and entrance fees can make it anexpensive night out. However, London is famous for its pubs and these tend to becheaper than bars. Entrance fees to bars/clubs can vary; there are the more glamorousnight spots like Mahiki (www.mahiki.com) where you can expect to pay up to £15/£20entrance fee or establishments like Drink Shop & Do (www.drinkshopdo.com) wherethere is often no entrance fee! You do not, however, need to tip the bar staff! Goingten pin bowling costs around £6.50 per game and watching a movie at the cinemacan cost between £6-10 for a student ticket although sometimes offers can reducethese costs.
Public transport is expensive and walking to nearby places is best. A single London busfare is £1.50, which is more economical than taking the Tube. A a single Tube fare (withyour Oyster Card) is £2.40 if you want to travel between two Central London stations. Itwill cost more to travel further out to places like Heathrow Airport (off peak/peak; £3.10-
£5.10). Purchasing an annual 16-25 Railcard (www.16-25railcard.co.uk) for around £30 willgive individuals 1/3 off on off peak single Tube fares meaning you will only pay £1.50 foran off peak single Tube journey in Central London. Travelcards (including daily) are alsoavailable at a discounted price. More on all of this to come on the Facebook group.
Traditional London taxis or black cabs (www.tinyurl.com/zjf96jt) are very expensive soonly use them if necessary. If you need to catch a taxi you may consider avoiding thetraditional black cabs purely for cost reasons and opt to catch a ‘mini cab’, which haveto be pre-booked. Below are two good options where students can download and usetaxi apps. An Uber cab (www.uber.com/cities/london/) can be requested through theuse of a smartphone. There are always first time user voucher/promo codes that youcan input into the app. You can also download an app called Kabee(www.kabbee.com) that allows the user to pick from a variety of private cab firms andyou can sort by the cheapest fare so this is also a good option. You will of course needwifi to connect to the apps once you arrive at the airport but Heathrow has free wifi sothat should be easy.
GOING OUT
LOCAL PUBLIC TRANSPORT
PAGE 4 BEFORE YOU ARRIVE
COSTS IN LONDON
Travelling in Europe can be expensive, especially in the major countries and citiesalthough there are variations. Be aware that some countries actually have a highercost of living than the UK but most will have a lower cost of living. For example, youcan often book a very low cost flight to Sweden or Norway but once you get there yourcosts can quickly mount up. Eastern Europe can often offer the budget traveler goodvalue. Choose where you go carefully. Priceoftravel (http://tinyurl.com/6o2jn68) givesone an idea of the variation in the cost of living in places across Europe.
Below we have an illustrative example of the cost of a typical weekend trip to Europeby air in terms of getting there and back to London:
A return trip to Berlin flying with Ryanair with an outbound date of Thursday 15thSeptember 2016 departing at 7pm with the return date of Sunday 18th September2016 at 9.55am will cost £44.25 if bought today (with an online search carried out onJuly 30th 2016). Note that the price will likely increase nearer to the departure date.
This ticket does not include any hold baggage (you can carry one piece of handluggage) and no extras like pre-selecting your seats.
A coach return ticket to Stansted Airport from King's Cross will cost £15.
Once you reach Berlin Schonefeld Airport you can take the local metro into the city fora very reasonable €3.20 (£2.66). The total door to door cost in this example of gettingfrom the dorms in Central London to Central Berlin and back is £64.57. Addhostel/hotel and sightseeing/entertainment costs to your trip budget and you willsoon see how many trips you might realistically be able to make whilst you are inEurope.
Have a browse at websites like www.hostelbooker.com to get an idea about the costof budget accommodation in Europe.
*The above costs will of course vary depending on when you book your tickets, whereyou want to go and even which airport you will be flying to and from.
TRAVEL IN EUROPE
Making a budget is never an easy thing to do but it is something that is very advisable to
carry out. It takes some willpower and effort but it can help you plan for the things that
you want to buy and the activities you want to do. There are three sub-sets of students
when it comes to money management:
1) The lucky few who have no real money concerns and have easy access to lots of funds.
2) Those who are very careful with incomings and outgoings and who organise their
daily spend based on their budgets.
3) Those whose budgeting comes out of necessity as they have spent their entire
student loan on eating out several times a week or going on weekend trips to Europe
every weekend leaving perhaps £20 to spend a week for the rest of the semester.
You definitely want to avoid being in this third category of students. Even if you think
you fall into the first category and you do not feel the need to worry about money, you
still should as this will teach you how to have money with great responsibility and that
money will not always necessarily come easy in life. Knowing how to budget is a vital
skill that you will develop whilst you are a student and in post university life.
PAGE 5 BEFORE YOU ARRIVE
MAKING A BUDGETWHAT STUDENT ARE YOU?
There are some things that you need to
think about when constructing a
budget. Think carefully about the
periods of the semester where you will
be spending more like Spring or Fall
Break or at the start of the semester.
Special occasions such as birthdays may
also affect your spending. You should
set aside enough money in anticipation
of these occasions. You can also expect
to have money coming in at certain
times such as when your student loan
comes through into your bank account.
The amount on money that you will
need to budget for will depend on what
type of person you are so be honest
with yourself. You will know whether
you are an impulse buyer or someone
who carefully thinks about each
potential purchase. When creating a
budget you should know that it is a
flexible plan rather than something
more concrete. Nevertheless, think
Students are provided with a workable Excel
Worksheet titled ‘Student Budget Worksheet
NYUL’ that will help keep a track of your
income and expenditure and allow you to
work out your projected budget. The
worksheet has instructions on what you need
to do and is aimed at the really serious
student. It should be updated frequently
before and during your stay. At first look it
can seem a little intimidating but it is
designed to capture all the possible costs
that may occur. There will be a workshop
during orientation that will go through it in
detail so don't worry if it looks a little
daunting. The worksheet will be posted soon
on our Money Saving Facebook group.
PAGE 6 BEFORE YOU ARRIVE
MAKING A BUDGETWHAT DO I NEEDTO THINK ABOUT?
about having a contingency fund available for
all of those unexpected costs. Get a real grip
on what you are spending and how much
you are spending on a regular basis.
You should also be able to work out how
much income is coming your way.
HOW CAN I DO ABUDGET?
So, you plan on studying abroad at NYU in London, and want to open a bank account?
The first question you should ask yourself is-should I bother? If your bank has a
partnership with a local UK bank, like Bank of America has with Barclays, then perhaps
it is better for you to find out the conversion rate between £ and $ your bank charges,
and whether you will incur any transaction fees on purchases within the UK/Europe.
Moreover, it is vitally important to understand how your credit card (and ATM
withdrawals) will work abroad, as you will probably want to travel around during your
time at NYU London. What follows is my story, of how I opened a local student bank
account, my two cents on the process, and basically why, if at all, you should go for it.
Since I arrived in London for a full academic year, it was crucial for me to open a local
bank account. Why was it crucial? Well, for one, my bank in the US, Citibank, does not
have any partnerships with local banks in the UK (Citibank works in the UK, but more
as an investment bank). Moreover, stashing the amount of cash it would take to sustain
me for an entire academic year at my dorm room may not be the smartest thing to do.
And in general, you don’t want to have a large sum of cash lying around. If you are here
for just one semester, like most NYU students, then you still need to think about the
same issues as I have, and figure out whether you are in a similar position as I was.
After understanding the need to open a local bank account, I had to surpass some
difficulties. The main problem is that I am a non UK or EU national (if you are an EU
national, you might have more possibilities and an easier time opening a general
account, and perhaps even a student account). So, I had to do a bit of research as to
which bank would allow me to open an account with them. The best available option
PAGE 7 BEFORE YOU ARRIVE
OPENING A BANK ACCOUNTA PERSONAL ACCOUNT: OR DAGAN (NYU LONDON FALL 2016 RA)
Continued in the next page
(and possibly the only realistic one) was to open a Basic Account with Barclays
(http://www.barclays.co.uk/basic-current-account). If you plan on studying at NYU
London then a Barclays Basic Account is likely your best option. And to be completely
honest, you don’t really need a student account; the main difference between the two is
that you can have a no-interest, no-fee overdraft with a student account. Nonetheless, I
was able to open a student account through nothing but sheer luck.
First, I did the crucial mistake of scheduling an appointment at the Barclays branch,
instead of on the phone/online. If you are here for spring semester then you probably
have nothing to worry about regarding scheduling an appointment with the bank in
advance. However, if you are coming to London for the fall semester, I would highly
recommend you schedule an appointment to open an account with Barclays at least 2
weeks in advance of your arrival. You need to keep in mind that many UK full time
freshmen students start their college experience in London in late September / early
October; and they all know better than to wait for the last minute to schedule their
appointment with the bank. If you do decide to schedule your appointment from a
branch, then you MUST have your passport and a proof of study/residence in the UK.
The latter can be obtained from the amazing staff at the Student Hub ([email protected]),
located in the 6 Bedford Sq. Campus. You MUST give your residence address of the
dorm you were assigned to, and not the 6 Bedford Sq. address (which will be the usual
address to report for shipping and deliveries).
The appointment process is very straight forward. You MUST come to your appointment
slot with a valid passport, your Biometric Residence Permit (if you have one), your CAS
letter, and your proof of residence/study in the UK. The bank clerk will ask you some
basic questions, you will answer them, and voilà you have a local UK account and a
debit card on its way to your residence.
PAGE 8 BEFORE YOU ARRIVE
OPENING A BANK ACCOUNT
Continued in the next page
PAGE 9 BEFORE YOU ARRIVE
OPENING A BANK ACCOUNT
Decide whether you want to open a local account in the UK
The simplest, and proven option is to open a Barclays Basic Account
Scheduling can be done over the phone, or in person at any branch
Schedule your appointment two weeks in advance of you arrival
SCHEDULE YOUR APPOINTMENT
OPEN A UK BANK ACCOUNT
Ask Student Hub staff for a ‘proof of residence/study in the UK’ letter,addressed to the bank of your choice – either in person, or by email
Have your passport, CAS letter, ‘proof of residence/study in the UK’letter, and Biometric Residence Permit (if you have one) with you
No conversion rate and no transaction fees
Enjoy many services within the UK that require a UK debit / credit card
BENEFITS
GATHER ALL REQUIRED FORMS
May help you get a monthly mobile provider contract cheaper andoffers more benefits than a prepaid (pay as you go)
Be able to receive UK wages
In my opinion, probably not. You can walk to many places and the card
(http://tinyurl.com/qbgrde6) is only good for those who want to buy a weekly or longer
Travelcard. Possibly a better and more relevant option is to purchase a 16-25 Railcard
(www.16-25railcard.co.uk) for £30 and you can use this to get 1/3 off on off peak single use
Tube fares and discounted Day Travelcards (www.16-25railcard.co.uk/help/faqs/46/).
Do note that all students on arrival at the dorms will receive a regular London Transport
Oyster Card with credit when they check into their halls of residence. You can buy one at
the airport on your arrival to the UK if you choose to take the Tube to your residence hall
as you can still return it (and get back your deposit) or just keep it as a spare.
PAGE 10 BEFORE YOU ARRIVE
FREQUENTLY ASKEDQUESTIONS
Is it worth getting the18+ Student OysterCard beforehand?
Of course you should bring some British Pounds in cash with you but the bulk of the
money that you will access should be available for you to obtain on demand when you
are in the UK. The best (and cheapest) way is to use a credit card, for ATM withdrawals
and/or store purchases. You will likely need frequent access to cash as not all places will
accept cards, especially in mainland Europe.
The big question is do you know how your card fees work? You should seriously think
about getting a credit or debit card that has zero or low foreign currency
exchange/transaction fees. Do note that it can take up to a month to receive a card so
apply for any new card early! Intrepid traveller Rick Steves explains this more
comprehensively (http://tinyurl.com/jbe33wy) and addresses what questions to ask your
bank before you go and how ATM fees work. Some past students have mentioned the
Capital One 360 Card as one card that has no transaction fees but there are others
available too. Have a look at this article from Nerdwallet (http://tinyurl.com/h9nxth4) that
compares what cards are available but do be aware banks constantly change their terms
and conditions so make sure you have the most up-to date information. It will be well
worthwhile obtaining a card that has no foreign ATM fees and foreign transaction fees as
it could save you a few hundred dollars over the course of a semester so spend some
PAGE 11 BEFORE YOU ARRIVE
FREQUENTLY ASKEDQUESTIONSWhat is the best wayto take money over to
the UK?
time with your research although you should apply as soon as you can. For example, if
you withdraw £100 from an ATM in the UK and the bank fee for ATM withdrawals is 3%
then you will be charged £103 in total, which will add up quickly if you do this frequently.
It is also safer not worrying about card fees too as you will not need to take out huge
chunks of cash at a time.
Note that some UK retailers (mostly online) do not accept swipe cards (chip and pin
cards are used in the UK) or a card with a foreign address so if possible try to ask for a
chip and pin card from your bank otherwise carry some cash with you at all times. Do
also try to get any cards in your own name (not your parents) as retailers may ask for I.D
and also inform your bank that you are going to be using their card abroad.
You can watch a short video by the BBC about cutting credit card fees when abroad
(http://tinyurl.com/zpkw6a4).
The BIG Print: We do not specifically endorse or recommend specific credit card
companies or financial products. We inform you of your choices and also provide you
with information that previous students have indicated may be useful to know. We
encourage students to check all of the terms and conditions including all the possible
fees that may be levied as financial institutions often change their fees regularly.
PAGE 12 BEFORE YOU ARRIVE
FREQUENTLY ASKEDQUESTIONS
You may find it difficult to open a UK bank account if you are studying in London for less
than 6 months. A Tier 4 visa (international students who are studying in the UK for more
than 6 months must obtain this visa) should be enough as evidence to open a UK bank
account. For those students who are only coming for one semester it is advisable to look
into the possibility of opening a US bank account that has reciprocal agreements with
UK banks, e.g. Bank of America and Barclays (http://tinyurl.com/o7wuaob). The
advantages are lower commission rates on the cost of withdrawing money from UK ATM
machines although this may still not be as cost efficient as obtaining a credit or debit
card that has little or no fees, as discussed above. It is also worth contacting HSBC Bank
(there are several branches in New York City) about the possibly of setting up an account
called the ‘HSBC Passport Holder’ as HSBC has many branches in the UK. You can also
open a basic account in the UK where you will be able to deposit your money and
receive bankers drafts from overseas (a charge may be made for money transfer). You
may be given a cash card and chequebook with which you will have access to your
money. One such account is through Barclays through their Basic Current Account
(www.barclays.co.uk/basic-current-account) that are available to single semester
students although they have changed the structure of their account recently but most
students should have no problem opening this account.
PAGE 13 BEFORE YOU ARRIVE
FREQUENTLY ASKEDQUESTIONS
Q) How can I set up a bankaccount in the UK and are thereUK banks that have a reciprocalrelationship with a US bank?
Yes there are other ways to have access to finance and students can consider making
international money transfers into their UK bank accounts such as the one from Barclays
as discussed above and therefore have instant access to cash (void of any transaction
fees) when on the street in the UK. Using Transferwise (https://transferwise.com), a peer-
to-peer money transfer platform that has no 'hidden' costs (unlike many banks) and it is
something to seriously consider as a method of having access to finance in the UK. For
further exploration you can read this article (http://tinyurl.com/jz7blsb) about losing out
on fees when making international transactions.
PAGE 14 BEFORE YOU ARRIVE
FREQUENTLY ASKEDQUESTIONSAre there any otherways to transfermoney to the UK?
Do I need a visa towork in the UK?
Yes. Hopefully you have received plenty of information about this already but you must
have a Tier 4 visa in order to work in the UK. You will be restricted to a maximum of 20
hours a week as part of the visa conditions. The current minimum wage for 18-20 year
olds is £5.55 and £6.95 if you are 21-24 years old. Don’t forget the taxman will want some
of your earnings too.
Generally no. There are several reasons:
1) You should first find out from your professors exactly which books are essential to buy
and which are ‘nice to have’,
2) You may be able to borrow them from the special NYU section at the Senate House
Library near the Academic Centre,
3) In general, textbooks in the UK are significantly cheaper than in the US,
4) At both Guilford and Byron residence halls there are plenty of textbooks that previous
students have left behind for you to take for FREE although it is first come first serve!
Have a look at www.amazon.co.uk to find more about how much textbooks cost in the
UK.
PAGE 15 BEFORE YOU ARRIVE
FREQUENTLY ASKEDQUESTIONSShould I buy my
textbooks before I cometo the UK?
Do consider bringing over an ‘unlocked’ mobile phone. You may need to get your phone
unlocked whilst you are in your home country. With an unlocked phone you can insert a
local UK sim card into your phone and use the local network, therefore paying local
rather than international calling fees. Another option would be to bring over a dual sim
phone so that you can keep your home call plan whilst you use your UK one alongside.
Again we will refer to our good friend Rick Steves (http://tinyurl.com/nedlgro) for more
details about everything you need to know.
Luckily mobile phone costs in the UK are generally low. Many students take out sim only
deal bundles with GiffGaff (www.giffgaff.com), Lebara (www.lebara.co.uk) or Lycamobile
(www.lycamobile.co.uk/en) as they are competitively priced. All three companies use a
main UK mobile phone network like O2 or Vodafone.
PAGE 16 BEFORE YOU ARRIVE
FREQUENTLY ASKEDQUESTIONS
Should I get my mobilephone unlocked?
Yes. Read up on how cashback websites like Topcashback (www.topcashback.co.uk)
work as this will be a very good way of claiming back money that you spend on goods
and services bought online in the UK (including hotels and online grocery shopping).
You can then withdraw your cashback ‘pot’ into a PayPal account even after you have
left London. More details will be given when you arrive so don’t worry if you do not get
the point of them right now. Ebates (http://www.ebates.com) is the US equivalent and
so may be able to get saving right away if you need to purchase flights, accommodation
and other goods and services.
PAGE 17 BEFORE YOU ARRIVE
FREQUENTLY ASKEDQUESTIONS
Is there anything Ishould read up on now ?
Are there items that Ishould bring
over which might not beavailable in the UK?
One may not be able to find everything in the UK but is available in your home country.
Think about what you just cannot do without whether that be a particular type of
shampoo or some prescription drugs.
I hope you have found this guide useful. Do remember that NYU London will be
providing students with a lot more money saving and budgeting advice in the coming
months so do not despair.
We look forward to seeing you all soon. In the meantime if you have any further
questions about money and finance in the UK then you can connect with me:
Email: [email protected]
Facebook: https://www.facebook.com/groups/1809098949333197/
See you in the Spring, Chris
Join the Spring 2017 NYU London Money Saving Facebook group for tips and advice
PAGE 18 BEFORE YOU ARRIVE
CLOSING WORDS
Please note that NYU London does notendorse any venues, products, websites or
services mentioned here.