Savings Advice for College Students2 min read • June 12, 2019
One of the most valuable lessons every college student can learn is how to stretch their dollars as far as possible. Oddly, most schools don’t offer up any classes on this.
Here’s a quick crash course in smart ways college students can spend less and save more.
- Be Book Smart. Buying used text books rather than new will save you a chunk of change. Even bigger savings can be had if you simply rent a book; you can check out options at sites such as CampusBooks.com and Textbooks.com
- Use cash or a debit-card for the majority of your spending. Limiting your spending to cash in your wallet or what you’ve got in your checking account (and can access with a debit card) will help you avoid the costly mistake of credit card debt. It’s still smart to have a credit card –it’s how you build a credit score – but limit your card purchases to a few small purchases each month that you can easily pay off in full.
- Budget the fun stuff. Yes, you should go out with friends. Yes you should have adventures. This is college, not some monastic challenge. But within your own limits. If you have a blow-out one weekend, perhaps you limit your spending the next few weekends. If you want to track your spending, consider a budgeting app such as mint.com or pocketguard.com
- Automate your bill payment. If you’re now in charge of some of your bills, make it as easy as possible on yourself to avoid being late with the payments. On-time payments are a big factor in your credit score, and besides if you’re late on bills you can often get smacked with hefty late fees ($35 a month for some credit cards) and other penalties. It is super easy to set up an automated bill payment from a bank or credit union checking account and the service is free.
- Create Cash Flow for After School. If you’re making money while in school, saving some of it each month is going to set you up for a smoother transition once you graduate. Let’s say you manage to save $50 a month in a high yield online savings account earning around 2 percent. Four years later that’s $2,500. Manage to save $100 a month and you’ve got yourself a $5,000 jumpstart on life after college.
Maybe some of your savings becomes the security deposit to rent an apartment, or a down payment on a used car. Or the solid foundation of an emergency savings account that is going to make your financial life so much less stressful. Once you have a checking account you can set up a savings account –for free—online and arrange to have monthly deposits sent from your checking account to your savings account.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.