Students typically work hard to cover the cost of attending college, but often find that not much is left over for other important things. However, you may be surprised to learn that you can change your spending habits, gain better control over your finances, and wind up with money in the bank.
Learn about common hazards you can avoid, and get tips on saving.
Identifying Personal Spending Hazards
Lots of students work hard and manage to cover the cost of attending college, but plenty discover that they do not have a lot left over for other important things, such as housing and food. The idea of saving money – for things such as clothes, entertainment, and other “extras” – may seem completely out of reach.
In this section we challenge you to take a chance and try. You may be surprised to find that you can change your spending habits, gain better control over your finances, and wind up with money in the bank. Below are some common hazards you can avoid and tips to get you started:
- New spending responsibilities: If you are starting college right out of high school, this may be the first time you have had your own checking account or received regular income from a job. It may be tempting to spend what is
left over after you pay for big items like tuition and books, forgetting that you still have other expenses. Even if you do not spend a lot of money on extras, you may not be aware of strategies for saving money, such keeping an eye out for
coupons and sales.
- Using credit cards: Credit card companies often target young college students because they have relatively few financial responsibilities and generally have clean credit records. Owning and using a credit card can be an effective
way to build a credit history, and can be useful in an emergency, but credit cards do carry significant risk: If you do not pay them off in full every month, they accrue interest – sometimes at a high rate – and the total amount you owe can
become an enormous financial burden.
- Neglecting to pursue scholarships: Many college students are unaware of scholarships they qualify for or they just do not follow through and apply. Take advantage of the financial aid office at your college. Ask questions and
get help finding out what is available to you. You may be passing up an opportunity to get “free money” for tuition, room and board, and books.
- Recreational activities: Unlike high school students, college students do not generally have classes all day, so they may find themselves with hours of free time. To fill that time, they may want to go to places such as restaurants, movies, and shopping centers. These activities add up fast and cost more money than eating on campus with a room-and-board plan or cooking meals and socializing at home.
Most of these points have budgeting skills in common. Budgeting involves knowing how much money you have and exactly where it is going.
Whether you are starting college as a single 18-year-old or you are older, working, and raising a family, a set of basic financial strategies can help you lower your expenses and save money while you are in school. Analyzing your spending habits (as you just did) is the first step.
Next, you can try the following:
- Create a detailed budget: Budgets enable you to treat yourself while avoiding overspending. For example, you might allot $50 a month for going out with friends. If you have already spent $50, you should find alternative recreational activities for the rest of the month so you do not have to borrow money that you need to set aside for other expenses.
- Cut down on meal costs: Looking for deals and using coupons at grocery stores will save more money than eating out. Students living in dorms may not have a lot of space and supplies for cooking, but they may have room for a refrigerator and coffeemaker to avoid overspending on snacks and trips to coffeeshops.
- Save on transportation: Cut down on the cost of gas (or get rid of your car altogether) by walking to class, riding a bike, or using public transportation. Check to see whether your college offers free or reduced-price student bus and train passes.
- Look for discounts and used items: As long as a textbook is not outdated, you can often purchase used or discounted copies online or from other students. Need to furnish a dorm room or off-campus apartment? You will save a lot money by borrowing household goods from friends and family or by purchasing them from secondhand stores.
- Apply for scholarships and minimize loans: To repeat, you do not need to repay scholarships, and they do not accumulate interest. Do your best to apply for everything and anything you qualify for, scholarships-wise. Winning a scholarship can have a big impact on your budget and financial health.
Check Your Understanding
Answer the question(s) below to see how well you understand the topics covered in the section. This short quiz does not count toward your grade, and you can retake it an unlimited number of times.
- Reaume, Amanda. "6 Common Money Mistakes College Freshmen Make." Money: College Planner. 6 Sept 2015. Web. 2 Feb 2016.
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