Madhu Suresh (right), Vignesh Venkateswaran (centre) and Ethan White are preparing to go to college abroad and learning the basics of managing money on their own. Image Credit: Pankaj Sharma/Gulf News

Madhu Suresh will be leaving for college in the US in about two weeks. But as much as academics, she is excited and anxious about learning to manage her expenses independently.

She, however, had a taste of handling money on her own last year when she attended Harvard Summer School for seven weeks. In the second week she lost her wallet, which fortunately did not have a lot of money in it but it contained her debit card.

"It was a bit of a chaotic experience as I cancelled my debit card and had to repeatedly call lost-and-found," says 18-year-old Suresh, who describes herself as frugal when it comes to money. A graduate of Dubai College, she will be pursuing psychology as a major at the University for California, Berkeley, where the annual costs will be about $54,000 (Dh198,180).

Like Suresh, many UAE-based young women and men will be starting college abroad this fall and for the first time, have to be more surefooted when it comes to their spending habits. After all, it's a lot more complicated than dealing with pocket money.

Although their fees and expenses are being paid for by their parents in a majority of cases, the students still have to budget their expenses and take responsibility for their actions. College life brings it own pressures — not just the demanding curriculum, but also distractions, some good, some bad, which could have financial implications.

Peer pressure

Vignesh Venkateswaran, also 18, is heading for Imperial College, London, to study mechanical engineering, and knows that he has never been given as much money as he will be when he goes to study abroad.

"So I am expecting it to be a challenge as there will be temptations which I will have to learn to resist," says Venkateswaran, who feels that college life is the ideal arena to learn how to manage money, which he will have to do for the rest of his life.

Anja Gullerfelt, 18, acknowledges that when growing up she had a lot of freedom when it came to spending. Sometimes she says she does feel guilty about spending her parent's money, and not being able to finance her own leisure expenditure.

She feels dealing with personal expenses at the beginning of her college life will be the same, though she says she is not the one to succumb to peer pressure.

But along the way Gullerfelt, who will be pursuing economics and politics at the University of Warwick in the UK, says there will be "somewhat" of a change in spending habits and lifestyle. Parents of the outbound children have been discussing and preparing them for this day and in some cases for over a year.

In the Suresh household, her parents have been advising her over the years on how to manage her money, more so nearing her departure to university.

Departure to university

But they are quite confident of her ability to manage expenses. Suresh has been managing her expenses for the past year and has recently started using a credit card. She was also showed how to track her expenses into different categories such as food, grocery, entertainment, medical and others — using Excel, a practice her mother thinks is positive and expects her to use in college as well.

Suresh's parents also used last summer at Harvard as an opportunity to open bank accounts for her, which came with an ATM card and a cheque book. She learnt to use these facilities during this stint.

Suresh has also picked up tips for saving smartly and using a budget as well as the pros and cons of a credit card — "good for convenience but bad as it is really easy to not be aware of what or how much you spend."

Among the tips her mother Nalini, who runs a consultancy, shared with her include:

  • Carry less cash when you go out — so you get to spend less;
  • Learn to say ‘no';
  • When you are about to yield to temptations, spend 10 seconds asking yourself why you need it and check if your answer would convince your parents;
  • Have a budget, especially for weekends and fun;
  • Smart buying — wait for end-of-season sales or discounts.

However, Nalini points out "it is a moot point about the environment's effect, which we need to respect."

"We shall like her to work out a budget — a budget that both she and we are comfortable with and use this as a tool to fund her account. We shall be funding her in line with her budget. As soon as we find that she needs [more] funds, we will request her to share with us the expense and help her tackle the issue."

The challenge for Gullerfelt, says her mother Ylva, a homemaker, will be the need to shop for groceries and consumables, which until now were taken care of by the family.

The parents of Ethan White, who is moving to Art Institute of Vancouver to study media and recording studies in Canada, have had discussions with their son on how to keep an eye on expenses.

Necessary things

"We calculated all of the expenses per month that we could think of and wrote them down — rent, utilities, spending, groceries and miscellaneous. But I also intend to work part time while going to school to try and pay for as many of my expenses as I can while having plenty of spending money," says White, 18. He is currently working at Atlantis Aquaventure Waterpark on the Palm Jumeirah for pocket money.

In their discussions, Venkateswaran's parents advised him not to be miserly when it comes to spending on necessary things like food and medicine. But for all else he should be aware while spending.

"We also told him to be careful of his possessions since world-over, people are not as honest and safe as in Dubai," says his mother, Meenakumari, who is a finance general manager with a private firm in Dubai.

The reality is financial slip ups are likley to happen to such young students when living on their own. "I think I will learn from my mistakes I will make," says Suresh. "As a college student I have to be independent and be able to take responsibility for my actions."


Joys of earning while studying

Four years back about this time, Umika Pidaparthy (above) was preparing for college in the US and this meant starting to tackle her finances on her own. When growing up, she saw her parents being conscientious about spending.

However, she admits, she was not as clear on how monetary transactions through financial institutions like banks worked. "So, yes my parents did sit me down and have ‘the talk'," says Pidaparthy, who graduated with top honours in sociology and journalism this May from Emory University. They paid for her education. But given that she was not so learned about finances at the start, she seems to have acquitted herself well.

When the time came to start managing her own savings, Pidaparthy says she was concerned as to how she would go about it. "Next to my newly-made American friends I probably seemed a little less experienced about handling finances."

When she was home for holidays, her father and she would sit down to go over her expenses for the semester. "I was definitely expecting you to spend much more," her father would say. It was the summer after her first year when she got a paid internship as a features writer for a magazine in Dubai that Pidaparthy started saving.

"I started maintaining a savings account in Dubai in addition to the checking account I had in Atlanta," she says. "I also signed up for finance management software like to track my savings and budget my spending."

And when in the US Pidaparthy got herself a part-time job on campus to pay for her personal expenses.

"You could say that I decided to get the job because I felt responsible for my expenses," she says. "I wanted to pay for myself in any way I could. Also, it is a very American thing to work while in college."

Also, she adds, there is really nothing like cashing in your paycheck and seeing the numbers in your bank account go up a notch. "I literally swelled with pride when I bought those pair of heels I wanted with my own money."


  • Pay tuition at one go every semester. Wire transfer every month can be quite expensive because of the transfer charge. n Always keep track of your bank account. Check it often or after you pay a big amount.
  • When going out shopping carry a certain amount of cash and stick to it so that you know exactly how much you are spendingn Sign up for a free personal finance management software which is pretty secure. You can set a certain amount as a budget say for "Movies" and if you exceed that amount it sends you a warning email so that you can cut back. n Sign up for rewards at stores. A lot of supermarkets and stores abroad have a reward system. They are usually free and if you sign up for them you can save a lot on common items and get a certain amount of cash back. So definitely take advantage of these.n Anywhere you go, ask for student discount. It never hurts and you'll be surprised because you can get some amazing deals from meals to movies just by showing a student ID card.n If you have a smartphone, download apps like Foursquare, Groupon etc. that give discount coupons for certain restaurants.You can also look for coupons online and print them out before you head out. As a student you have to be smart about this. After all you are living on a student budget which is not easy, so look for a deal wherever you go. n Beware of money-making schemes and also check all documentation for working part-time.

Limits, rights and responsibilities

Steve Gregory, managing partner, Holborn Assets in Dubai, advises that in any event it is best for parents and the child, who of course is a young adult by now, to agree on limits and rights and responsibilities.

In fact, Gregory says, a substantial number of local students studying in their home country will do so with little support from their parents and may work their way through university.

One of his daughters was a weekend soldier while at University in London, and benefited from fitness, enhanced education, superb sports facilities, horse riding and diving and parachuting in foreign countries, and also gained, what Greogory described as, "a maturity beyond her years at graduation". Her achievements secured her employment from the first interview she attended after graduation.

As general advice, he says, parents and their child, the student, should investigate all sources of financial help, whether grants, loans and employment possibilities. Many companies sponsor gifted students financially during their student days. Scholarships and bursaries may be available.

"I feel sure most students google their universities of preference and visit them long before making a final decision," says Gregory. "Of course financially they need to survive wherever they go, but student life is not about how much money parents have, it's about how to find the best solutions for all of the needs of each individual student."

Where home country governments (state loans to students are the cheapest, though not all will lend to students) are financing loans, students get low interest rates and long repayment periods starting after graduation. "Of course if students take loans to finance their study, it will have an impact on their financial life possibly for many years in the future, especially if they fail to find well paid work on graduation. The choice of degree course is most important, since employers are more likely to employ certain graduates rather than others," says Gregory.