“I’m a poor college student.”
Ah, the famous phrase of the collegian. With tuition, food, and gas prices all rising, money never seems to stay in our wallet. Then, fear creeps in: I might not be able to come back to college next year! If I don’t, then I won’t be able to finally ask out that cute girl! I’ll be forever alone.
But…the reality is that we spend a lot more than we would ever imagine. A Starbucks here and there, a new pair of jeans, a cool new gadget—pretty soon it all adds up. In fact, an educational consulting firm found that students spend between $600 and $1,100 a month in discretionary spending.
They found that students spend an average of $8,400 a year on non-educational expenses!
$8,400 could pay for a semester or two at many colleges!
But surely that’s not me! I’m not spending THAT much!
Well, unfortunately, you’re likely spending far more on non-essentials than you’d think. Here are some tips for tracking and tightening down your finances.
#1 Make a Budget
How do you become a millionaire? Make a budget. A budget is vital for visualizing your spending and tracking each expense. A few times eating out or a few shopping splurges doesn’t seem too harmful. But those little expenses add up. I’ve found this out myself. Recently, I was wondering why my savings account was stuck, despite my job bringing in a decent wage every month. It turns out I was spending nearly $200/month on just food and some shopping!
Use a free online budget system like Mint.com. Mint will combine all your bank accounts, list all your transactions, and then categorize your spending. Then, you can budget how much you really want to spend in each category, and Mint will track your spending and notify you (by email or text) if you exceed your budget. Mint’s graphs and charts are incredibly helpful for visualizing income vs. spending.
You probably will want to avoid the pitfall of most college students, who spend about 40% of their income on discretionary (non-essential) spending. Mint can help you tighten the screws on your spending.
College students spend an astounding 40% of their budget on expenses other than necessary room and board, textbooks, and tuition.
#2 Cut Back on Clothing Expenses
Cutting back on clothing doesn’t mean frolicking around campus in the nude. Instead, spend more time thinking about where you’re buying your clothes. Instead of making the impulse purchases at the trendy stores, step back a little and wait. Shop online and shop at discount brands like T.J. Maxx, Ross, or even (for the adventurous) hit the local Goodwill or thrift store. Look for the same trendy look but at a far lower price. Overall, be PATIENT—don’t jump at every deal, but wait for the price to fall.
#3 Trim the Cell Phone Plan
I know, I know. You NEED that iPhone. You NEED the unlimited data. Your life just doesn’t function without that smartphone. But, the average cell phone plan costs $50/month, which means you’re spending at least $600 a year on a phone. See if you can cut back on your monthly bill. Are you really using all your minutes? If not, try to find a leaner plan that still gives you flexibility to talk, text, and surf. If you’re still looking for unlimited everything, check out one of the alternatives like MetroPCS or VirginMobile. Or go back to your current provider and convince them to lower your bill.
#4 Buy Your Books on the Cheap
Face it—most of us never look at our textbooks after the semester. In fact, we’d rather burn the books than read them again. Most of us would like to do this.
So, instead of hitting up the campus bookstore during the first week of school, get your book list early. Most professors have their syllabi prepared well beforehand and can tell you the book titles (and ISBN numbers). Buying your books used can save several hundred dollars a semester. Search Half.com or Amazon.com to find those exact same books far cheaper. In fact, an easy search tool is DirectTextbook.com. It sorts all the possible deals from the major booksellers into an easy-to-read list.
#5 Make Your Own Food
No, you don’t need to hoard or grow your own food. But, instead of visiting the cafeteria or going out on the town for each meal, buy some groceries (look for weekly discounts) and do some light cooking. Many dorms don’t have kitchens, but you can buy fruit or sandwich materials for snacks, lunches, or weekends. Here’s some more ideas. Maybe even invest in a coffee maker and start brewing your own drinks to save you the Starbucks money.
#6 Get Some Extra Money During College
Along with cutting back on your expenses, add some positive cash-flow with scholarships and grants. Even if you’re in college, sites like Fastweb can help you look for need- and merit-based scholarships to help continue to fund your education. Some scholarships require more work than others—but remember, the essays and application process is a small price to pay for free money. Also, don’t shy away from small scholarships. You spend money in small amounts, so a scholarship of $250 can be equally valuable for canceling out some of your educational costs.
Finally
Be alert and attentive to how and where you are spending your money. If you pay more attention to your spending habits, you will have to consider how important each purchase is. And take small steps—you don’t begin spending hundreds of dollars in one fell swoop, so step back slowly. Focus on a particular category and work to save money in that area. Then, add another area. Be patient and persevere—your hard work will pay off! Happy saving!
- Written by James Grunwald
