Savings Advice for College Students
3 min read •
30 sec brief
As a college student, it is important to learn how to save so that you are set up for financial success down the road, here’s a savings crash course.
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 textbooks 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 for 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 payments. 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.
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