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As a student with a limited budget, you're likely searching for ways to maximize it! Now is the perfect opportunity to learn financial management skills and strive towards achieving your long-term financial goals. Read on to discover 10 valuable tips to optimize your budget as a student and make the most out of your resources.
1. College Costs
If you aren’t yet in college and are looking at schools, think about the costs now and check the estimated cost of attendance for each college or university you are considering. As nice as it might be to graduate from a school with immediate name recognition, it might be even nicer to graduate with less (or possibly even no) student loan debt. Each school should have their estimated cost of attendance listed on their website, if not, the financial aid office will be able to tell you.
If you are looking to cut costs when it comes to education, you may want to attend a community college for the first two years. The average annual cost of a public community college is about $3,730 while the average cost of a four-year college or university is $35,550 a year. You may be still trying to decide what you want to declare as your major, so spending some time at a community college figuring that out while you get your general education credits out of the way could be the perfect solution and help you save money at the same time.
2. Building Credit with a Credit Card
Ask a trusted parent or family member with good credit to add you as a user to one of their credit cards. Many credit cards will allow members to add additional authorized users. This will help jump start your credit score. The account holder may be able to put spending limits on the card and can easily revoke spending privileges if they get out of control. You may have access to track your expenses on an app. This exercise in proving your financial responsibility can be a helpful starting point to building good credit.
Your school may have on-campus credit card offers. Carefully research this (and any card you may potentially apply for) to ensure you are receiving the best rewards for you. Different cards may have cash back or travel offers, so do your research to ensure you find a card that benefits you and your lifestyle. Your school may also receive some financial kickbacks such as receiving $1 from each credit card’s annual fee plus royalties from purchases made on each card.
It is important to note that you will need to be over the age of 21, have a co-signer, or be able to prove you have a source of income in order to be approved for a credit card. If you do sign up for a credit card, be aware of how much you charge to your card and try to pay back your outstanding balance each month. You may want to set up automatic payments to ensure you always may your payments on time, thus positively impacting your credit score.
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3. Find a Budgeting Tool that Works for You
There are many free and low-cost budgeting apps and options. Your banking app may have built-in budgeting tools! You may prefer a digital spreadsheet to track your expenses or just an old-fashioned paper and pen. Either way, find what works best for you to track the coming and going of your money.
Take a look into the following popular budgeting methods and apps to see what might be worthwhile for you!
- Mint - this app tracks all your accounts in one place and creates a budget with set categories that notify you when you approach your budgeted limits.
- EveryDollar - the free version of this app does not allow you to sync your bank accounts, but you can enter your incoming and outgoing money over the course of the month; you can also set categories for your budget and set bill payment reminders.
- PocketGuard - this simple app is useful for tracking your spending; connect your banking, credit cards, loans, and bills and it will track your net worth, as well as shows you how much money you have left to spend.
Read more about Best Budgeting Apps
4. Know Your Income
If you have a part-time job, receive an allowance from home, or have any other dependable source of income, identify how much you can expect to bring in each month after taxes. No matter what the number is, create a budget around this amount. If you work during the summer to save up for the school year, divide the amount you earned by the months you will be in school to know how much you should be budgeting for each month.
5. Budget for Fun (and Breathing Room)
To ensure financial flexibility, it is advisable to allocate a portion of your monthly budget for unexpected expenses. As a college student, occasional nights out are bound to happen, so be prepared to cover these costs without compromising your other expenses. While focusing on your academics and spending time in the library is beneficial for your grades, it is equally important to explore and embrace the opportunities available to you as a student.
Learn more about How to Budget
6. Track Your Progress
Your budget is a plan and is intended to help you reach your financial goals. You may have to track your spending each day or week when you begin, but once you have become more comfortable with the lifestyle your budget allows, you can assess less frequently. Notice what budget categories you are struggling to meet and where you are excelling. Product costs change over time, as do your purchasing habits. Allow your budget to reflect these changes.
7. Find Your WHY
Why do you want to save money? This objective will help you stay on track, especially when tight budgets seem to be getting in the way of your lifestyle. What realistic financial goal are you saving for? Make sure you have a combination of short- and long-term goals to help you stay in control and keep your focus.
8. Activities for College Students
Many campuses have a student activity center with lists of free or low-cost activities. These can range from intermural sports, fitness classes at the gym (your student ID will usually allow students to access the school fitness center free of charge), student talent nights, clubs, service and volunteer opportunities, and cheering on your school’s athletic teams, just to name a few.
If you are living on or close to campus, take advantage of what your student ID will do for you. Many local companies may offer student discounts, so speak up and ask.
9. Cut Living Expenses Whenever Possible
- Housing: Depending on your school, you may be required to live in a freshman dorm your first year. If not, some colleges have the option to move off-campus and this might be cheaper. Determine where you can live that will meet your needs and is also affordable. Some residences give you the option of a private or a shared room. Shared rooms tend to be cheaper, but you will possibly be sharing your personal space with a stranger.
- Food: Many people have two budget categories for food: one for restaurants and one for groceries. If done correctly, buying groceries can save you money rather than purchasing fast-food or eating out with friends. Instead of eating out for most of your meals, make it a special treat, such as for a birthday, or to celebrate finals. When you do eat out, be budget savvy, some restaurants may offer deals such as half-priced appetizers after a certain time. Ordering a variety of appetizers and splitting those with friends can be just as filling as a large meal and could end up being half the cost. Creating a weekly meal plan and hitting up your local grocery store can be a quick and easy way to cut costs in your budget. Check the weekly mailer for ideas on products that are on sale that you can base your meals around (and save you money!) Local stores may also have apps that allow you to digitally access manufacturer or store coupons to scan at the checkout for even more savings.
10. Keep Applying for Scholarships
Scholarships help you to pay college tuition and other costs associated with school without dipping into your savings account or incurring student loan debt. Know that scholarships are available all throughout your college career—they aren’t just for your first year of school! Check in regularly with your financial office or your program of study for possible scholarships that may apply to you. Sites like ScholarshipPoints.com also offer easy to enter scholarships that are available throughout your years in school.
Benefits of a Budget
Your time as a student gives you the opportunity to prepare for the future in many ways. Learning financial independence can be a useful skill as you gain confidence in providing for yourself. Understanding how to manage and make the most of your money is helpful now as well as in your future.