The educational landscape may have changed forever in 2020, but the year can still herald something wonderful for young adults. If your children are looking to move abroad for higher education or a new job, or have had to remain there during the pandemic, there are some important ways you can help them adjust their financial habits for the new normal. Here are some specific areas on which you can concentrate:
1. Healthcare and safety
Being in a new country makes it tough for your children to make ends meet because they need time to get used to a new lifestyle, new culture and new currency. Now, due to the outbreak, they have to stretch their budgets even further to include insurance, medical requirements (masks, sanitisers, health tests, face shields), and hopefully soon, vaccines.
You can ask your children to set aside some money each month to defray expenditures caused by COVID-19. While stockpiling is irresponsible, it is always good to have a basic backup kit that can help your kids avoid buying goods at peak prices and reduce trips to the doctor/hospital.
2. Communication and keeping in touch
Knowing your loved ones are just a call away can be very comforting, both for you and them. These days, the internet has made international communication easy and convenient with online services. However, you need to prepare for unforeseen events too. For instance, if there is a lack of internet access at their end because of a temporary outage or unavailability of repair services, you might not be able to get in touch.
Impress upon your children the need for a dedicated international phone plan. Tell them to ensure that they always have enough talk time. With a suitable tariff plan, they can call you even if they are in a poor network zone or do not have access to Wi-Fi. In the absence of the right plan, they would have to incur incredibly high international calling rates just to give you a quick update.
3. Loss of employment and managing expenses
Many overseas students rely on part-time jobs to supplement the remittances they receive from home. However, COVID-19 has rendered many young people unemployed, with no significant source of additional income. As a result, they may be struggling to make ends meet. The simplest way to help would be to send them some extra money to ease their stress. You can also help them draw up a quick and easy budget. With heightened awareness of the importance of living economically, this may be the best time to assist your kids to build some financial discipline.
To set an expense budget, teach them the 50-20-30 thumb rule: 50% of funds for necessities, 30% for recreation and incidental expenses (if any), and the remaining 20% for emergencies. Initially, you can set up an emergency fund for them, with financial aid sent through instant online money transfer services. After that, to help them avoid temptation, you should encourage them to auto-debit a certain amount from their bank account as soon as their salary or stipend comes in. The money in this fund should be used strictly for emergencies like healthcare expenses or house rent in case their lease agreement ends.
4. Saving and spending
It is important to help your kids differentiate between ‘wants’ and ‘needs’. Spending on necessities like food, house rent, and electricity is unavoidable. But socialising, ordering take-out, and travelling on the weekend are all discretionary expenses that your kids could learn to cut down on, or live without.
You can also help your child save more money. Keep an eye out for certain state-level benefits they may be eligible for as new students. Help them identify services and subscriptions they are no longer using that can be paused or cancelled, be it a credit card or an online entertainment portal or a newspaper. Help them find cheaper alternatives to some of their favourite hobbies or activities, like organising a joint workout session if it is not safe to go to the gym.
You can also encourage your children to become more conscious shoppers, by engaging them in a friendly competition to discover who can find the lowest price online for a certain product or service.
When they need you most
Your kids need your support to stay motivated and driven during this time. If you guide them to manage their finances better, it will make them feel more in control. Helping them build discipline is an important, long-term plan. For a safe, economical, and convenient way to send money to them, use Western Union for outbound transfers.
For educational purposes, you can send up to USD 10,000 (or the equivalent amount in INR) per transfer. For other purposes, up to USD 5000 can be sent using Western Union. You can easily transfer money from India to countries like the UK, the US, Australia, Singapore, France, Germany, Ireland, and Italy. Go here to read more about transferring money online from India to around the world.