nyu london money and budgeting before you arrive in london (july 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?

JULY 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

BEWARE OFLITTLE

EXPENSES; ASMALL LEAKWILL SINK AGREAT SHIP

BENJAMIN FRANKLIN:

p. 35

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.

Any student studying away for a semester or for a year should prepare for the many costsassociated with studying abroad. London is well known to be an expensive city but it is also aplace that has an incredible number of ways you can save money and spend less, many littleknown to visitors. At NYU London, we will be providing you with the local knowledge about 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 Fall 2016 NYU London Money Saving Facebook groupfor tips and advice

https://www.facebook.com/groups/1085422734852394/

1 The Cost of LivingHow do I know the cost of living inLondon and is the Pound stronger thanthe Dollar?

2 The Costs in LondonA run down of the major costs of living inLondon

5 NYU Student SurveyPrevious data given by past studentsabout what it actually costs to study inLondon

6 Making A BudgetAll the information you need aboutdrawing up a budget plan for theupcoming semester

8 Frequently Asked QuestionsMany common questions asked bystudents before they arrive in London

16 Closing WordsHow to join the NYU London MoneySaving Facebook group and how tocontact us if you have any questions

BEFORE YOU ARRIVE

Jessica Wildeshares how to

overcomewriter 's block.Story on p. 20

CONTENTS''You've got to tell your money

what to do or it will leave'' Dave Ramsey

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?

http://www.numbeo.com/cost-of-living/city_result.jsp?country=United+Kingdom&city=London


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 (we will tell you how to do this when you arrive)

can save you a lot on eating out, making eating out worthwhile and affordable. Thereare of course cheap eats like Little Bay (www.littlebayfarringdon.co.uk) where you canget a 3 course meal for as little as £13 whilst an opera singer belches out some classictunes whilst you eat. Alternatively, you can opt for a more typical restaurant like CiaoBella (www.ciaobellarestaurant.co.uk) where pizzas or pasta can cost £8/£9. ‘Greasyspoons’ (similar to diners in the US) also exist like Cafe Kozzy(http://tinyurl.com/jkqpn9p) where one can eat for around £4 or £5 for a meal and havea limited presence online.

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 withTesco (www.tesco.com) and Sainsbury’s (www.sainsburys.co.uk) being ‘low to mediumcost’ and Waitrose (www.waitrose.com) more ‘mid-to high cost’. For your ownperspective, do have a look at the comparison website mysupermarket(www.mysupermarket.co.uk) that lists and compares the prices of the products sold inseveral UK supermarkets including those mentioned above. Most supermarkets alsodeliver to your door so you may be able to seek out the best deals by shopping online. Itis worth noting that groceries in the UK and Europe tend to ‘go off’ or ‘out of date’

quicker than groceries bought in the US, which is food for thought!!

EATING OUT

SUPERMARKET (GROCERY STORES)

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 expense and walking to nearby places is highly recommended. Asingle London bus fare is £1.50, which is more economical than taking the Tube. A singleTube fare (with your Oyster Card) is £2.40 if you want to travel between two CentralLondon stations. It will 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 £30 will give individuals 1/3 off on off peak single Tube faresmeaning you will only pay £1.50 for a single Tube journey in Central London. Travelcards(including daily) are also available at a discounted price.

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 you caninput 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 and you can sort by thecheapest fare so this is also a good option. You will of course need wifi to connect to theapps once you arrive at the airport but Heathrow has free wifi so that should be easy.

GOING OUT

LOCAL PUBLIC TRANSPORT

FINANCE REVIEW

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 higher costof living than the UK but many that have a lower cost of living. For example, you canoften 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 will soonsee how many trips you might realistically be able to make whilst you are in Europe.

Have a browse at websites like www.hostelbooker.com to get an idea about the cost ofbudget 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

NYUL surveyed some eight Spring 2014 students at a special money/budget workshop

about exactly how much they spent whilst they were in London. We have gathered

their responses and their cumulative average spend for the main items that students

spend on (does not include hidden costs or costs that are not common to most

students). Of course there are many factors that will determine how much one will

spend on goods or services, not least your lifestyle, so do take these figures as general

guidance only! This survey is ‘non-scientific’ in the sense the figures could be skewed by

the lifestyles of the particular cohort of students who participated in the workshop and

it is not meant to be a truly representative sample of the NYUL student body. It is only

intended to give a very rough outline about how much students spend on certain

goods and services. However, it is what we hope to be fairly reflective of the costs of

studying in London.

The main costs (in US dollars) are; mobile ($14.38 per month), groceries for home

cooking ($37.75 per wk), eating out at restaurants ($20 per wk), take Outs ($13.13 per wk),

textbooks ($168.13 per semester), stationery ($25 per semester), club/society Costs

($7.25), attending plays, shows and musicals ($6.88 per wk), attending concerts ($12.50

per wk), bar/Club entry fees ($6.25 per wk), alcohol ($13.13 per wk), laundry ($6.38 per

wk).

Again, the costs of travelling in Europe really depends on the individual and will vary

more so between individuals than perhaps other items but those who were surveyed

spent on average $888.40 a semester on transport costs (flights, trains, bus, taxis), $380

a semester on accommodation and $370 on sightseeing, eating and entertainment.

This totals $1638.40 for a semester so this is a large proportion of any student’s budget

for the semester! Do also note that this survey was taken in Spring 2014 where there

was a two week spring break. Fall Break 2016 will consist of just one week.


STUDENT SURVEY

shoppingTAG


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 6 INTERVIEWBEFORE YOU ARRIVE

MAKING A BUDGETWHICH 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 and be

available on the Admitted Students blog.


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?

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.


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 students who attended the

money/budget workshop 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


FREQUENTLY ASKEDQUESTIONSWhat is the best wayto take money over to

the UK?

over the course of a semester so spend some 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.



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.



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.


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 £5.30 and £6.70 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, an exception

rather than the rule!,

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.


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.



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.



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/1085422734852394/

See you in the Fall, Chris

Join the Fall 2016 NYU London Money Saving Facebook group for tips and advice


CLOSING WORDS

https://www.facebook.com/groups/1085422734852394/

nyu london money and budgeting before you arrive in london (july 2016)

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