For those of you who are just entering college or university for the first time, congratulations! This is a great step in your journey. You’re going to learn, have fun, and potentially set yourself up for a fulfilling, lucrative career.
However, college isn’t just fun and games: there is a serious side, and that is learning how to take on adult responsibilities for the first time. Some of you are finally living on your own, being in charge of your own food and your own day. That includes learning how to manage your money.
As a college student, you are not going to have a lot of income. Some of you will be living off of an allowance from your parents or your financial aid package. Others of you will be working to support yourself, or living off of previous savings. Being enrolled in classes full-time does not allow a lot of time to work, so for most people, full-time work is not an option.
This means you’re going to have to learn how to manage your money very well. Money management is a skill that will follow you for years to come, and will be one of the most important skills you ever learn. It’s better that you learn it while in college than have to learn it the hard way when you’re working full time.
This article will be talking about money management tips, as well as money saving tips, for college students. We at Elite Personal Finance want to make sure you succeed at managing your money as a student, so without further ado, our first tip is:
Create a Budget… and Stick to It!
This is the most important tip, so we decided to put it first. You need to budget based on how much money you have available!
Every month, you are going to have different expenses. Examples of typical college expenses include:
- Books and Other Learning Tools (software licenses, iClickers, etc.)
- Groceries and Toiletries
- Mobile Phone
- Rent (if living off campus, away from home)
- Loan Payments (if paying off loans during school. We are going to explain soon why this is a good idea.)
- Entertainment (eating out, having fun)
- Discretionary Spending (money spent on anything else)
This could add up to be a lot of money, especially when your income is small. Because of this, you’re going to need to figure out how much of your money is going where.
On average, you will spend about $700 per semester on books, $250 per month on food and drink, and your other costs will tend to vary a bit more. Of course, this depends on where you live and where you’re going to school, whether or not you have a kitchen or a meal plan, and many other factors.
Try to estimate by yourself: figure out how much money you have available to spend, then limit yourself to spending only on absolute necessities.
Use Budgeting Tools to Make It Easier
If you have a great deal of trouble sticking to a budget because it takes extra time out of your day, or because it’s hard to keep track of everything you spend, you’re in luck. Budgeting tools have taken a lot of the guesswork out of keeping and maintaining a budget.
A few popular tools include Quickbooks and Mint, both created by Intuit. These tools can help you get on a budget and stay there.
Another popular tool is called YNAB (You Need a Budget). It can help you get on a budget and stick to it. It uses a slightly different methodology and helps teach you exactly what you need to do to keep a budget.
It will be coming out with a free version for college students, so watch out!
Some benefits of budgeting tools:
- Automatic sync to your credit cards. This allows you to log every transaction made on any of your cards… without ever needing to write anything down. It does it automatically.
- Set clear goals. It’s easy to tell the app that you only want to spend $150 on restaurants, and the app will remind you when you are close to that level.
- Keep track of your spending in one place. Hooking up your credit cards to a single budgeting tool will allow you to figure how much you’re actually spending over time.
Use Credit Responsibly
As a student, you’re just getting credit for the first time. Credit is a powerful tool, and with power comes a great responsibility. You now have the ability to borrow money to purchase things now, with the caveat that you pay it back later.
Credit cards are an amazing tool: they’re best used for delaying payment to the beginning of the next month, allowing you to not have to fret about whether you have money in your bank account at time of purchase. You can then schedule your bills to pay at the time you have the most money in your account.
Building credit history will serve you extremely well through life, and could be the difference between owning a home by 30, or being deep in consumer debt with a low credit score.
Here’s some basic tips on building good credit:
- Pay your bills in full. Your bill should be paid, in its entirety, if at all possible. Do not accumulate a balance if possible, and if you do, pay it off quickly.
- Pay your bills on time. Payment history is 35% of your credit score, and it’s important to remember that even one late payment can cause issues with your credit. Don’t pay bills late.
- Ask for credit limit increases every year. The less credit you use as a portion of your total allowance, the better. By increasing your credit while keeping spending the same, you can make it a lot easier to increase your credit score.
We have several articles about how to increase your credit score. However, these basic tips should be good for you as a student.
Keep Discretionary Spending to a Minimum
As a student, if you’re able to keep discretionary spending low, you will be able to spend more money doing things you want to do, such as going out and taking trips with friends. You will be able to buy things and gadgets later on in life: making the most of your college memories should be a strong priority.
What is discretionary spending? Essentially, discretionary spending is spending on things that you don’t necessarily need, but what you might want. Things such as clothes, accessories, tech gadgets, jewelry, or anything that isn’t related to living your day to day life.
Discretionary spending should be kept separate from money spent going out. This is because discretionary spending can be far more easily controlled, whereas money spent on a night out is a lot harder to control. However, there is one good tip we have to make sure you can control this money:
Budget Your Nights Out
College students tend to go out and it’s likely that your night will not be completely planned. You might not know how much you will spend, but you should instead know how much you will want to spend over time.
In a month, aim to spend a set amount, say $200, total during your night’s out over the course of the month. This way, you will not worry so much about how much you will spend in a single night, but you will be able to see how much the spending adds up.
These should be budgeted separately from everything else, and this number does not have to be set in stone.
These money management tips should help you throughout your college experience, however money still may be a concern. Since you can only manage money you have, it only makes sense that you should find as many ways to save money as possible.
We have compiled some small tips that should save you money in the long run.
Make Your Own Food (and Your Own Coffee!)
Cooking simple meals to eat every day is an excellent way to save on money that might be spent getting food from a fast food joint, or eating out at a restaurant just because you don’t have food available. Campus meal plans also tend to be very expensive, and you could save a lot of money by cooking.
If you do not have access to a kitchen, it will not be easy to make your own food. However, if you’re like most students, you might be spending $2-4 per coffee when you don’t need to be. If you drink 2 cups a day, that’s an extra $4-8 a day you are spending that you don’t need to spend!
Buying a coffee maker is an excellent investment. Even if you buy premium coffee, you will still save over $1 per coffee made. It doesn’t sound like much, but this adds up over time.
If you need to stay up late to study, no need to grab a 5 hour energy or Red Bull: make your coffee and you should be good to go.
Don’t Buy Books At The Bookstore!
Your textbooks are one of the biggest expenses that you will have as a student. You will need to find as many ways as you can to save money, while still having all of the required materials for your class.
The best way to remedy this is to simply not buy books at the bookstore!
There are other places to get your needed textbooks. Buy a used textbook from an upperclassmen: bookstores rarely buy back books, and if they do, they’ll typically not give very much back for them! Thus, many upperclassmen still have their old textbooks. You should be able to find people selling old textbooks on Facebook groups at your school.
Another excellent place to get textbooks is the Internet! Many international versions of the textbook are nearly identical to the ones you will use in class, and they are often much cheaper. Try search for textbooks on sites like Amazon or Slugbooks and you should be able to save quite a bit of coin.
Keep in mind, though, if you’re buying an older edition of a book, it might not be the correct book to use. This may be due to the professor assigning questions from the current edition of the book, and if your book doesn’t have the questions, then you cannot get the grade!
In many instances, you can get away without purchasing any textbook and instead borrow or share one with a friend. You can split the cost of a textbook with a group of people, and then use that as a way to study together.
Make a Little Extra Income
Of course, more money can’t hurt. There are more ways than ever for a student to make a little bit more money while they take classes, and they might be exactly what you need in order to buy beer money for the weekend.
- Part-time Work: You might already have a part-time job. However, if you don’t and are currently getting money from parents, financial aid, or savings, then it might be worthwhile to spend some time earning money! This is tough, but it could be worth it, especially since you will be able to add more experience to your resume. Truth is, even McDonald’s experience can be valuable when you’re learning how to work in a group setting and achieve a common aim!
- Work-Study Programs: These programs are subsidized by the US Government, and they are restricted to those who qualify to enroll in the program. However, if you can enroll in the program, you should definitely do so! These jobs will allow you to make a little extra money and, best of all, they will work within your study schedule.
- Teaching Assistant and Research Assistant Jobs: Most of these jobs are restricted to graduate students; however, in some schools, undergraduates with good grades could be able to work these positions. They tend to have much higher pay than most part-time jobs and they offer great experience.
- Become a Residence Assistant (RA): This could be exactly what you need. Residence Assistants don’t get paid, however they get something even better: free room and board. This could mean saving up to $12,000 per year on living expenses! A RA job is a time commitment, but it could be extremely valuable and, since the work isn’t full time and fits around your study schedule, it’s a perfect job for a student like yourself.
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