Tuition is expensive, so people should know how to save money in college. Perhaps you’re planning this stage in your life, or you’ve heard people go through it. If not, then you need to find a way to have more money now. Whatever your reason, you must manage your money wisely.
Proper money management is one of the most important things you should learn in college. You will be the one handling your money once you graduate. You will probably look for a job as soon as possible, so you will have to make the most out of your starting salary. We will give you tips on how to spend less while studying.
To emphasize why you need to save money in college, we will show you how this type of education became costly. Then, we will show you how much an average college student spends every month, organized into types of expenses. More importantly, we will share tips on how to spend less on each one.
Why is college so expensive?
The reason why education now costs so much is a highly debated topic. Yet, many people claim it’s because of the student loan program that started during the Cold War.
It was the height of the space race, and Russia was taking the lead. In response, President Dwight Eisenhower wanted American students to step up and compete.
He wanted people who were skilled enough to win the space race for the US. Eisenhower thought they would need more education to claim this victory.
As a result, he signed the National Defense Education Act of 1958. After Eisenhower’s term, lawmakers didn’t want the student loans to increase government debt.
This is why President Richard Nixon made the Student Loan Marketing Association, which most people know as “Sallie Mae.” In 2004, it became a privately-owned organization.
As a result, some colleges increased their tuition costs. They knew that the government would just back the student loans every time.
Nowadays, 48.9% of students are still paying off their loans. Each of them owes around $20,000, 20 years after graduating. Here are the average costs for private college students:
- Books and supplies – $1,194
- On-campus room and board – $12,682
- Off-campus living – $9,762
- Food – $547
- Transportation – $1,050 – $1,080
- Entertainment – $1,000
Read More: Student Loan 101 Guide
Best ways to save money in college
The best way to reduce spending in college starts before you enroll. You might want to get into a community college instead of an expensive private university.
Nowadays, you can’t rely on the name of your college to carry your credentials. Many college jobs are saturated to the point that trade jobs are becoming a better choice for some!
You could probably find a community college with the same course you want in that more expensive school. You get the same skills at a fraction of the cost.
Once you’re in college, it’s time to plan a budget. This will help you make sure that you’re spending money on the right things so that you can set more funds aside.
Get a pen and paper, tablet, smartphone, or laptop, and use that to list your needs and wants. Then, take out the “wants” you can do without, such as multiple online streaming subscriptions.
Then, find cheaper alternatives to the cheaper ones. Once that’s done, put your plan into action. Eventually, you may notice that you have more money around.
Use that money to build an emergency fund. Nobody wants to think that something bad could happen in their lives. Yet, it’s best to be prepared.
Your emergency fund could quickly cover whatever sudden expense that may arise. Even better, you don’t have to rack up debts in your checking account.
What’s more, your extra money could help you get rid of your other debts. If not, you may save enough to reduce your student loan debt in the future.
There are so many other ways on how to save money in college. As I said, we will break them down according to the usual expenses of a college student:
- Live at home – I know that most college students want to live independently, but consider how it could reduce your expenses. You won’t have to pay for your needs in the meantime. Once you find a job, you can start moving out.
- Plan living on campus – You might want to rent outside or inside your campus, but plan this carefully. Check all your options to see which ones are more affordable.
- Split the cost – You may get a roommate, so you won’t have to shoulder all the expenses. However, make sure they sign a lease. In case they move out, you won’t have to pay whatever expenses they still have.
- Save on utilities – Consume less electricity by turning off and plugging out devices that you’re not using. You might want to wash your dishes by hand too. Before you leave your place, make sure nothing’s left turned on or plugged in.
- Have a meal plan – Determine how much you’ll spend on food and groceries every week. Buying in bulk saves more money than purchasing items individually. If you have a roommate, talk with them about how you can pool money for food.
- Use coupons – You might not like using coupons, but they help you spend less on stuff, and the few cents you shave off the prices can build up your future savings. If you prefer online shopping, various websites like Honey can find online coupons for you.
- Try cooking – Instant ramen is a well-known college staple, but it’s not good for you. Since you’re planning groceries, why not take this time to learn how to cook? You save on food, and you learn a valuable skill, so it’s a win-win!
Supplies and tuition
- Buy used books – College students spend an average of $1,240 every year on textbooks, so 66% of them avoid buying their course materials. You might want to join those folks by purchasing or renting used ones at your campus bookstore.
- Use rewards and cashback – These programs let you save money on laundry detergent and other stuff.
- Shop with your student ID – That other piece of plastic may allow you to get discounts at some stores. For example, you might score lower prices for MacBooks.
- Apply for scholarships – Apply for programs that could cover costs like food and books. It wouldn’t hurt to try, right?
- Ride a bike – Unlike driving a car, this won’t cost you fuel, maintenance, and monthly payments. Even better, it may help you lose weight!
- Carpool – If your friend has a car, you may want to ask if you could ride with them to school. This is much better instead of buying a car yourself.
- Public transportation – You might save money if you ride the bus or train to school.
- Cancel subscriptions – You may want to stick with just one instead of having an account for Netflix, Sling TV, Amazon Prime, and so many others.
- Get a new hobby – You can find so many other things to do besides binge-watching. For example, you might want to learn how to code in Python. If that’s too nerdy, you could try so many other activities like playing an instrument.
- Exercise without the gym – If you’re going to a gym outside school, you might want to quit your membership. You can stay fit without access to all that equipment. For example, you may jog around campus to get some cardio.
Bonus money-saving tips for college
- Get a side hustle – You could get a remote job to make money after school. Even better, you could do it from your home, dorm, or wherever you want!
- Be careful with credit cards – Only have one plastic swiper that you can truly pay off in full every month. If you’re not careful, the interest rate can pile up a lot of debt!
- Sell things you don’t need – If you have stuff you’re not using anymore, try selling them online. Facebook Marketplace and other platforms can help you find buyers.
- Visit your bank – Some bank accounts have favorable terms for college students. For example, some savings accounts do not require a minimum balance.
- Focus on your studies – You should do other stuff while in college, but you have to make sure you finish on time. Study hard to avoid failing any subjects and delaying your graduation.
That’s all there is about how to save money in college. You don’t need to graduate to become an adult. Manage money wisely in college, so you’ll be ready to do it for the rest of your life.
Aside from keeping money in an emergency fund, you might want to try and invest some of it. For example, a Roth IRA is a great way to save for your future.
Alternatively, you may invest in stocks and other assets. It’s much easier nowadays because you have apps like Robinhood that let you do it via smartphone.