How to Save Money: Essential Tips for Students

Higher education is an investment in your future, but it often comes with a hefty price tag. For many students, the idea of saving money while juggling tuition, books, and living expenses can seem impossible. However, with careful planning and smart strategies, it is possible to prioritize savings and develop healthy financial habits that will benefit you long after graduation.

Understanding Money Management

A key to financial success is having good money management skills. As a student, it's easy to ignore the power of saving money, especially when there is always an event, party, or occasion to go out and celebrate, so being able to balance your monthly expenses so you're able to enjoy yourself outside of the classroom is the real cheat code to good money management as a college student. But what exactly is money management? Let's talk about it. Money management is the process of effectively managing and controlling your finances. It not only requires making informed decisions about budgeting, saving, and investing but also spending money wisely to achieve any and all financial goals you might have. And money management doesn't have to be daunting either. You can create different ways to track expenses, create a budget, set financial priorities, reduce debt, and plan for the future.

Creating a Realistic Budget

Creating a realistic budget is a key aspect of effective money management. It's not just centered on managing money and living restrictedly. It involves assessing your income and expenses to see how much money you have coming in and how much you are spending. A budget not only keeps you on track with your goals, but it will help you save money, as well. Creating a realistic budget also means knowing yourself, your spending habits, and your lifestyle. One of the goals for creating a realistic budget is to allow you to save money while still staying true to your personal wants and means. That is, if your weekly, bi-weekly, or monthly income allows, I recommend setting aside some personal spending money for you to enjoy your life. While it's important to have savings goals, maintaining a good and realistic balance between saving and spending money is a way to avoid financial stress.

Maximizing Income and Minimizing Expenses

1. Secure Part-Time Employment

Working part time as a research assistant, tutor, barista, or other paid job while in college has benefits beyond adding to what's in your bank account. Depending on your financial situation, you may qualify for the Federal Work-Study Program, which can help you snag a job on campus. Or you could look for a job at a local café, restaurant, or retailer. The money you earn can go towards essential expenses or be put into savings. I know how difficult it can be to squeeze a job into an already full college schedule, but part-time jobs can be flexible and work around your school schedule. Not to mention, you'll be bringing in the money you need, especially remote jobs. So, before you exclude this option, do some research and see if you can make it work!

Side Hustles: Find a side hustle (i.e., tutoring, freelancing, food delivery, etc.). Luckily for students, technology brings accessibility to all of these money routes right to your phone. With some research and careful planning, you can start growing your money today.

2. Budgeting Wisely

Budgeting can seem pointless when you don't have much to spend. But establishing a budget early on means it'll be a habit later when you have more money to put toward financial goals. I might have already said it, but budget, budget, budget. It is truly life-changing. Not only does budgeting help you manage your money wisely, but it also instills a sense of discipline you may not have had before. However, the key to budgeting is being realistic with your money plan. You want to make sure you create a financial blueprint that helps you reach your financial goals and allows you to enjoy your personal endeavors.

Read also: Age-Based College Savings Guide

3. Student Discounts

Also, do not underestimate the power of student discounts! Student discounts can provide some major benefits for students on a budget by reducing costs, increasing affordability, and enhancing the overall student experience. Student IDs aren't just for getting access to campus buildings. Flashing it at stores, mass transit providers, museums, and even restaurants could get you discounts. Your college may have a list of local and even national businesses that offer its students special pricing. For instance, if you and a friend are in the mood for a night out, some restaurants in the surrounding area of your school may offer student discounts. Students should explore and take advantage of these discounts to make the most of their limited financial resources. Please note: establishments that offer student discounts vary.

4. Textbook Savings

Textbooks can be a major financial drain each semester. Buying previous editions of textbooks. Try renting or buying the ebook version of the book that you may need since those versions of a textbook is often cheaper that buying a brand-new textbook. But why spend a few hundred dollars on new books when there are cheaper options available? Research student services in your area that offer secondhand books for a lesser price.

Buy used textbooks (and sell ours when done)

5. Utilize Campus Resources

You're likely paying for more than just tuition and room and board when you attend college. Make sure you're getting the most out of your activities fee by using campus resources when you can. That could mean going to the school gym and health centers, which may be available for free or at a reduced price. Furthermore, many campuses also have a fitness area, gym, movie nights, free trips, and hold big events all at free charge.

6. Strategic Meal Planning

Meal prepping isn't just a millennial thing-or for people who aren't paying for the campus meal plan. If you live off campus or have a lower-tier meal plan, have you strategized your meals to use ingredients efficiently each week? The money you spend on takeout can be spent at your local supermarket for meals that can last you the entire week!

Learn to cook and eat out less - with inflation hitting all markets, the cost of a simple, fast food meal can dig holes in your pockets, especially if you eat out every day. Learning how to cook can not only save you money but also promote wise spending habits. Simply limit eating out to special events such as birthdays or after-exam celebrations. Making food at home is easy and cheap. While your favorite cup of coffee is still brewing, you can make your takeaway breakfast and lunch.

7. Housing Considerations

Outside of tuition, housing is often college students' biggest expense, clocking in at about $11,500 and $13,000 a year, depending on whether you live on or off campus.4 Research costs both on campus and in surrounding neighborhoods to figure out the best living option for you. You may be able to nab free housing and maybe even a food or living stipend by working as a resident assistant (RA). For some, living in a dorm is typically cheaper than living in an off-campus apartment. For others, living in an apartment with several people is cheaper than living in a dorm because the cost of housing is divided. To save money, compare the cost of living in a dorm versus the cost of living in an apartment, either alone or with several other people.

8. Financial Aid Applications

The Free Application for Federal Student Aid (FAFSA) determines what need-based scholarships, grants, and federal student loans you're eligible for. If you're already receiving need-based aid from the government or your university, you likely will be required to fill out these forms every year to remain eligible.

9. Scholarships and Grants

Scholarships and grants (aka the kind of funding that doesn't need to be repaid) aren't just for incoming first-year students. Your school and even private scholarship-granting organizations often reserve some of their cash for returning students. These may be need- or merit-based and may require an application, essays, and letters of recommendation. Undergraduate students usually have the most difficult time adapting to being in control of their finances-apply for these undergraduate scholarships to expand your budget where you can.

Apply for scholarships. This can also help you manage your finances in the long run. Scholarships can also help students get ahead financially. Apply for these merit scholarships and turn your good grades into money!

10. Student Loan Interest

Though you don't have to make student loan payments while in school, interest generally starts to accrue on unsubsidized federal loans and all private loans during that time. If you're able, you can start chipping away at that interest.

11. Avoid Unnecessary Costs

One of the biggest ways to lose money is to spend it unnecessarily. You want to make sure your expenses are centered around what is important and needed. It's easy to get lost in weekend plans when it usually means weekend spending, so make sure you're managing the costs of your plans to ensure they align with your saving goals.

Limit your subscriptions to streaming services
Avoid hanging out with people who always stay or eat out in places you cannot afford.
Prioritize Your Spending - When it comes to creating a budget, prioritizing your spending is crucial for financial success. By focusing on essential expenses like tuition, rent, groceries, and utilities, you cut out things that only drain your finances, like take out, shopping, partying, etc. Make sure your budget prioritizes your essential needs vs. your wants.

12. Transportation

If you have a car, gas expenses can pile up. You can simply walk to your university or ride a bike. You can also try taking campus transportation. On some campuses, they may have a shuttle service that can take you to several stores or to any given place that is within proximity to campus. In addition, some campus shuttle services also offer services at no extra charge. This can greatly help with transportation issues as well as help you save money on transportation. If your campus might not have a shuttle service, take advantage of using public transportation or even walking to certain places.

Read also: Scholarship Requirements

Banking Basics and Financial Tools

Checking Account

Checking accounts are meant for everyday spending and generally do not offer much, if any, interest on the money held in them.

Savings Account

A savings account typically earns more interest than a checking account, but may be slightly less accessible. They typically don't come with debit cards or offer check-writing capabilities, and depending on where you hold your savings, you may be limited in how many withdrawals you can make per month.

First things first, if you have a checking/bank account, you should definitely have a savings account. A savings account will allow you to set aside the money you're going to save for the week or month and adhere to your monthly budget. A savings account may also keep you on track to having a stable financial future. Not only will you see your money grow, but it will also help you create a savings plan you can stick to. In my opinion, the key to keeping your savings account growing is acting as though the money isn't there. Once you've created your weekly or monthly budget, you're able to start setting aside the money you plan to save in your savings account. The second you transfer the money into your savings, try to ignore that it's there. This money should solely be for rare and important occasions like emergencies, your future, or as a last resort. If you want to see your money grow, pretend it's not there. Before you know it, you'll have more money than you thought.

Start an emergency fund

Roth IRA

Even though "retirement account" is in the name, Roth IRAs can be valuable accounts for college students. Roth IRAs are best known for offering tax-free withdrawals in retirement (provided certain requirements are met), but they also offer the flexibility for you to make penalty-free withdrawals of any contributions you made (but not any investment earnings) before then. You can only contribute as much into it for the year as you earned, however. For example, if the current Roth IRA contribution limit is $7,000 but your campus job only paid you $1,000 (and that was all the earned income you had for the year), the max you could contribute to your Roth IRA is $1,000. If you had no earned income at all during the year, you can’t contribute anything.

Look into an investment account

529 Account

You may be familiar with-or even already have-this tax-advantaged savings plan that allows you to set aside money for education. Funds in a 529 account grow tax-deferred and can be withdrawn tax-free for qualified education expenses. Plans may offer the ability to deduct contributions, depending on what state you live in and open an account in. This could be a good option for funding any future education expenses or repaying student loans. But make sure to consider your entire financial picture as you may be better off repaying loans now than contributing to a 529, depending on your loan's interest rate.

Direct Deposit

Bank accounts offer the ability to set up direct deposit, a secure electronic payment method that allows funds to be transferred directly into your bank account. Not only does it remove the need for physical checks, it provides a fast and convenient way to receive payments automatically. With direct deposit, students can move their money to different accounts, like their savings and checking accounts, or split the deposit between multiple accounts. It is a great way to be flexible with managing finances.

Use of a Debit Card

Using your debit card for purchases also has its advantages for college students. It's easy to lose track of how much you're spending when you use cash, but debit card transactions are recorded in your bank account. Debit cards may make it easier to track your expenses and see where your money is going. It also reduces the chances of you losing money, which is something no college student wants to experience. Imagine leaving your house with $100 and losing a portion of it throughout the night through misplacement or carelessness. Debit cards keep your money in one place, sparing you the stress of a financial loss.

The Bold Debit Card

Some debit cards also come with rewards, like the Bold Debit Card for college students. For every $1 spent on your Bold Debit Card, regardless of the category, students gain 1 Bold Point. Once you accumulate 2,000 Bold Points, you can redeem them for either $10 cashback or $15 towards a student loan payment.*This kind of debit card not only allows you to benefit from personal spending but also helps you track your spending in your dashboard† so you can find ways to budget or view your Bold Points. Not to mention the uncompromising security features and ability to set up direct deposit.† It can potentially help you avoid taking out student loans.

Find a debit card with perks

Setting Up and Maximizing Your Budget

Aside from bank benefits and debit card perks, setting up a budget will change your life! Let's take a look at some key points when it comes to setting up and maximizing your budget.

Track Your Spending

Tracking your daily, weekly, and monthly spending is a good way to maximize your budget. At the end of the month, you're able to see where you're spending money the most and find new ways to limit that kind of spending. It can also create some wiggle room for personal spending. For example, if at the end of the month, you have some money left over from your budget, you can take what you didn't use and treat yourself to something you want. The sky is the limit when you track your spending!

Lower Your Expenses

To maximize your budget, you have to lower your expenses. This doesn't mean you shouldn't spend money; it simply means spend money on your everyday needs vs unnecessary wants. This includes but is not limited to, buying groceries to make food at home vs. ordering takeout. Not only can fast food drain your pockets, but it also promotes an unhealthy lifestyle. The same thing goes for unnecessary shopping sprees. You want to make sure your budget is centered around what you need, ultimately lowering your expenses.

Start Saving For the Future

Save, save, save! If you start saving now, you are only setting yourself up for great budgeting and managing. Whether it be a couple of bucks here and there or a set amount every paycheck, by saving money now, you are building your financial future. So, don't be afraid to throw pennies into your savings accounts. Every penny, nickel, dime, dollar, and quarter counts!

Credit Card Management

Limit Credit Card Usage

Credit cards typically come with high-interest rates, so it's extremely important to use your credit cards wisely. This doesn't mean never use them, but I suggest using them as a last resort. And if/when you do use them, make sure you pay more than the minimum balance, if not in full, to avoid the interest once your billing cycle closes. Credit cards can be tricky because of the way they're set up. Unlike debit cards, you are obligated to pay back your credit cards at the end of each billing cycle, plus, depending on the card, potentially an additional high interest rate.

Avoid using your credit card

Use Credit Cards Wisely

Using your credit cards wisely for certain occasions like rainy days or as a last resort will not only help you build your credit but also keep credit card usage to a minimum. Having a positive repayment history with your credit card can also help you in the future, so make sure your credit card spending is at a minimum to help you achieve financial success.

Ways to Avoid Unexpected Debt

Now, though growing your money by saving is important, let's not forget how equally important debt is. Unexpected debt is something no one can foresee, but it can be something you can manage by being cautious of your spending. Take it from someone who didn't know a thing about debt: you don't want to find yourself living outside of your means and in a debt hole with high interest rates that can leave you drowning. So, here are some ways to avoid unexpected debt.

Use your debit card
(Again) budget wisely
Be realistic about your budget

Additional Money-Saving Tips

Bills for energy, internet, housing, mobile phone, and a car need to be paid on time. Try to set up a direct way to pay. This way, you won’t have to spend extra money on late payment fines.
Saving money does not mean saying goodbye to parties and fun nights with your friends. There are tons of free entertainment options available such as outdoor music festivals, plays, and free concerts.
Monitoring your bank account and having an idea of what is being spent and withdrawn is one thing that could help manage and budget your money efficiently.
Take surveys
Create a blog
Find remote work

tags: #how #to #save #money #tips #for