How to Save Money as a College Student
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Being a college student isn't easy. Tuition costs and living expenses are on the rise, you have to maintain a social life, all while ensuring you make it through the finish line. There's also something to be said about the loans you're taking on during your college days. A four-year degree will see a student spend $16,500 on rent, according to Admissionsly. Meanwhile, EducationData.org pegs the average federal student loan debt balance at $37,113.
But these formative years are your first taste of adulthood. College students are on a tight budget, and if you're not careful with spending money, you may find yourself in a never-ending cycle of debt. According to the same Admissionsly article, the average college student in 2019 had five credit cards.
Being financially independent doesn't mean you have to earn more money; exploring ways to meet your financial goals through saving what you have in the bank account can also improve your financial situation. Below, we're listing hacks that should help you save money without compromising your current lifestyle.
In this article
How to save money as a college student
Track the money
Even before you begin to look into methods to save money, you first have to take stock of your spending habits. Everyone dreads analyzing where the money is going, but having a student budget is an important first step. You can either choose a budgeting app like Personal Capital or YNAB (You Need a Budget), or you can just jot down expenses on your phone's notes app. There's no golden rule to budgeting. Just see what works for you and stick to it.
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Cut down on discretionary expenses
The easiest way to save money is to identify and then cut down on expenses you can live without. Do you really need your own Netflix account? Each Netflix account can have up to five individual profiles. In fact, 33% of Netflix users share their accounts with somebody else, Leichtman Research Group said. Splitting subscriptions with roommates will let you enjoy the content you love on your favorite streaming service and make it easy on the pocket as well.
Get student discounts
If you have a valid student ID (which you should if you're a college student), that opens up a world of discounts for you. From clothing and laptops to gym memberships, several brands big and small have some form of discounts in place for students. For example, Spotify has a students-only premium plan. In addition, many restaurants often give money off on meals if you're a student. You could save all the money on gym memberships by using the gym on campus.
Choose the right credit card
Credit cards are a great way to , which will come in handy later in your life. If you must get a credit card, choose one with the lowest rates and only use it up to an amount you can pay in full because bad credit will haunt you. In fact, you should treat your credit card as a debit card. The easiest way to avoid late fees is to pay what you owe in full each month. This puts you on solid financial ground as a young adult. There are many low-fee credit cards for students that offer travel perks or rewards.
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Don't buy a car
Sure, buying a car will make commuting easy. But gas, insurance, parking, and periodic maintenance all add up to a lot of money each month. You could also face unexpected car repairs. Instead, you can carpool, use public transportation, or borrow a car. Ride-sharing companies have also made going to point A from B easy and hassle-free. If you do have a car just catching dust on campus, you can rent it out on services like Turo and earn money.
Limit eating out
If you find yourself taking a daily pilgrimage to the coffee shop, consider buying a coffee maker. This is a one-time investment that should pay dividends for years. Similarly, if you order take out often, learn how to cook, or at the very least, find a magic number per week and don't go beyond it. If you signed up for a college meal plan, use it. Also, be on the lookout for happy hours, restaurant promos, and free events with food. Beer is an important part of college life, but too much is not only bad for your health but also for your bank account.
Rent or borrow textbooks
Course materials are expensive. While these expenses have been declining, college students pay about $1,300 per year on average on books and school supplies for a four-year program, according to EducationData.org. Instead of hitting the campus bookstore, ask within your circle if you can borrow books. You can also buy or rent second-hand books through Amazon.com, Chegg or Barnes & Noble.
Open a checking or savings account
Visit your local bank and inquire about a checking or savings account designed for students, which boast lower fee and no minimum balance requirements. And be sure to keep an eye on your balance at all times to avoid overdraft fee. A savings account lets you earn interest, so while you're saving money, you are also making some off your savings. And you can set up automatic transfers from your checking to savings account.
Related: Checking vs Savings Accounts
- Access up to $750 per pay period
- No interest, mandatory fees, or credit checks
- Over 15 million downloads and counting
Watch that phone bill
Keeping an eye on your cell phone usage is also a good idea. This provides you with an insight into your usage habits. Perhaps you don't need the plan you're currently paying for? Always compare cell phone plans before signing up, and look for plans that offer unlimited texts and don't rip you off with high data fees. Many phones have an alert for when you go above a predefined data cap. Make sure that's activated on your phone to avoid paying extra.
Start a side hustle
This one has more to do with making money than saving it. But a side hustle is a great way to make some extra money when you have time. I don't mean to be a party pooper, but you could even do it during spring break. Side hustles won't cost you any money, but they require your time. You could offer your services on a freelancing platform like Upwork or Fivver. You could rent out your car, sell items on eBay or Amazon or fill out surveys. The options are endless, as long as you're willing.
Financial aid
FAFSA (Free Application for Federal Student Aid) lets you apply for grants, scholarships and loans, so it's important that you fill it out each year. Completing this application determines your eligibility for financial aid once the federal government has pored over your parents' most recent tax returns. Even if you don't need grants right now, your financial situation might change in the future. That's why you should fill out FAFSA each year. Registration is currently open and will close October 30.
Cut down on impulse purchases
Going shopping because you're bored is bad for your bank account. Avoid grocery shopping when you're hungry because you're more likely to buy things you don't need, but rather want. And if you do have to buy something, look for shops that offer student discounts. If the grocery store is eating too much into your expense, avoid name brands.
Invest
All that saving has led to this. Because what good is money if you don't work to multiply it? Once you start building your savings, you can begin investing. Start by researching fractional investing apps, which allow you to buy fractional shares in blue-chip companies. You could also sign up for a robo-advisor or open a free brokerage account. Investing over a long horizon is considered a sure and safe way to generate wealth. Invest a little each month and go from there.
- Access up to $750 per pay period
- No interest, mandatory fees, or credit checks
- Over 15 million downloads and counting
FAQs
Why do I need to budget?
Budgeting isn't sexy. But it's an important first step that will tell you where your money is going. Without that, you can't identify expenses that should be cut down or eliminated.
As a student, I don't go off campus often but have a car. What should I do?
If you have a car you don't use often, you could consider renting it out on Turo and earn some extra money.
The bottom line
Colleges are expensive so its important that you hack the heck out of your expenses. Spending money provided by The Bank of Mom & Dad may be fun, but college is your first taste of adulthood. It shows you what practical life looks like, so it's best to treat it as a trial of what's to come later in life and set yourself up for success. Your journey to saving begins by knowing where your money is going. Then, cut down on discretionary expenses and identify other ways you can optimize your budget.
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Writer
Jasir Jawaid is Joy Wallet's Assistant Editor. He has more than 13 years of experience as a journalist covering Wall Street, equities, financial policy and regulation, and cryptocurrency and blockchain.
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