Last Updated on July 28, 2022
Contents
Learn How To Save Money as a Student
Saving money as a student may sound like a paradox, but achieving it is not impossible. Students can and should save cash. It doesn’t matter if you’ve got a scholarship, a job, or your parents’ support, there are always reasons to save for college.
Regardless of your source of income, you can set aside some cash. In addition, saving money as a student builds sound financial habits. This article teaches how to save money as a student each month.
Don’t Spend Money Unnecessarily
This advice might puzzle you. What is necessary and what isn’t? You most likely have different priorities compared to your parents, for example. Priority is the keyword here. How can you understand the difference between necessary and unnecessary spending? First, you need to determine your priorities.
Some of your friends may spend a lot on eating out or clothes. These things may matter to you too, and that’s ok. Make them priorities and set a budget accordingly. Priorities should go hand in hand with budgeting to make sure you can afford them. If going out is a priority, think about where to cut expenses, such as clothes or electronics. Distinguish what expenses are essential for you and which ones aren’t.
Once you establish priorities, you can start saving money. Do this by cutting costs on non-essentials. For example, if clothing and vacations are not on your priority list, avoid spending on these. Limit buying clothes and vacationing.
Avoid the Discounts’ Mirage
When you stroll through a mall, you can’t miss them. A discount or sales sign is luring you into almost every shop. These are marketing strategies.
Discounts aren’t there to make your life easier; they’re there to increase the shop’s revenue. Yet, many people fall into the discount trap. As a result, they spend on an impulse basis. If you have this issue, avoid discounts by default. Instead, look for them when you need to buy essentials.
A strategy that can help you avoid unnecessary spending is the 30-day rule. This rule is beneficial when you see discounts. Sales have a strong psychological impact on our shopping behavior. By using this rule, you let reason guide you instead of impulse. As a result, you can make purchases when they’re valuable and necessary. Here is what this rule entails:
- When you see an item you like, don’t buy it immediately.
- Write it down.
- Wait for 30 days to pass.
- After this period, reconsider buying it.
In most cases, the desire to buy that item has disappeared because you allowed yourself time to think, then realized you didn’t need that object. The bottom line is you save money. You’re also building the skill of spending in moderation.
How to Save Money as a Student by Reducing All Your Expenses
Reducing your disposable spending is one option. Cutting down your expenses is more complicated. In this case, you also have to make tweaks to your budget. It may mean indulging less in whatever it is that you like. As a student, this is not great news. You want to have fun and enjoy life while you’re young. But don’t fret; there are ways to combine comfort and joy with spending in moderation. The key is finding more affordable alternatives.
Make a list of your major expenses. Include everything from partying to rent and bills. Then, for each category, think of a solution to reduce your spending. You can either replace that category or find more affordable options. Here are some examples:
Expenses | Ways to Reduce Them |
Rent |
|
Utilities |
|
Groceries |
|
Eating and going out |
|
These are just a few options that can help you lower your expenses. Below are a few more suggestions for you to consider.
Continue to live with your parents
If they pay your tuition fee, they are already helping, but your parents may be willing to do more. Many parents wonder how to save money for students and find that letting them live at home is a good solution. If you live close to your university, it is.
Continuing to live with your parents can save tons of money. It might not be the college life you’ve dreamed of, but think about what you could do with the saved rent money.
With a yearly average cost of living in a dorm at a public university of $10,000, you could save about $30,000 in three years. You would end up putting thousands more dollars in your savings account. Living with your parents while you study is a wise financial decision. If distance allows you to do it, give it serious thought.
Save money while commuting
Commuting to and from the university might be a necessity. If you live far from the campus, you might have a car and need to buy gas. Have you thought about replacing your vehicle with public transportation? You might get to your destination faster by subway, train or bus while saving money!
If public transit is not an option, don’t give up. Think about other solutions. For example, carpool with classmates or roommates. If you need to drive on the same route each day, do it together. You will only use one vehicle and spend less on gas. Plus, you are reducing the wear and tear on your car. Each person can take turns driving their vehicle on certain days of the week.
Save money as a student by working
Work and study are two compatible things. If you’re ambitious, the combination will work. What matters is to have or start learning good time management skills. That way, you can attend all your courses and study while also working. The ideal work schedule for a student is part-time as doing so makes it easier to manage work and school.
Where can you start looking for a part-time job? On your campus. Many programs offer jobs for students. Ask around, google the available options, and talk to teachers. You might find something related to your studies, which would be a great start to your career. Then, you could start building your resume.
You might be wondering how much money you could earn. The answer depends. If you make the federal minimum wage, $7.25 per hour, and work 20 part-time hours, you’ll make around $150 per week. With $600 more each month, you can build your savings. During the summer months, you could earn more. Your part-time job might offer full-time options. Take advantage and put aside more money.
Buy or borrow books from other students
Books are necessary for your studies, but it doesn’t mean you have to buy them new. New books might drain hundreds of dollars per year from your budget. Look for used textbooks. The easiest way is to ask students who’ve taken the class before. They might be willing to sell or even lend you their books for free.
Use your student ID card as often as you can
There are lots of discounts you can get as a student. From public transport discounts to museum discounts, the list is long. You could even shop for electronics and get good deals. Always have your student ID card on you and be ready to use it. Ask if a student discount is available before you pay as different shops may offer them.
Change service providers
When you are renting, you will need to find utility providers. You don’t have to stick with the same company the previous renter was using. Shop around for better prices by comparing several providers’ fees. You might find better deals elsewhere. Utility bills are monthly expenses you should strive to reduce. To ensure they don’t drain your budget, avoid past due bills. These will incur penalties. Use the half-payment method to pay your bills in time.
Save Money Every Month as a Student by Using a Budget
The answer is using a budget. Different budgeting methods can help you out. One of the most practical is the money jar system, a classic technique in many variations. One of the most famous is Harv Eker’s method. According to him, the ideal budgeting system consists of six jars. In real life, these can be different savings accounts. Of course, you don’t have to use jars, but you can if you use cash.
Each jar has a different name that represents a spending category. These are the six categories:
- Living expenses or necessities (55% of your budget)
- Long-term savings account (10% of your budget)
- Education (10% of your budget)
- Play (10% of your budget)
- Financial freedom (10% of your budget)
- Charity (5% of your budget)
The categories above are how Eker recommends splitting your budget. With this method, you invest in long-term financial goals. At the same time, you can invest in the short term by using the financial freedom category. This method is suitable for students for three reasons:
- It allows you to invest in entertainment and leisure (the fun jar).
- It uses two separate savings categories (long-term and financial freedom).
- It entails a dedicated fund for education.
A similar method you can rely on is the digital envelopes system. With this budgeting strategy, you keep your money separated. Each month, keep an eye on your spending. For example, you might have the following envelopes:
- Grocery and gas
- Rent and utilities
- Non-essential items
- Savings
Once the money in the envelope for non-essential items is gone, stop spending on that category. The same goes for the rest. Allocate a strict budget to each expense and stick to it.
The 50-30-20 method is another effective way to save money. Here is how it divides your income:
- 50% goes to your needs
- 30% to your wants
- 20% to your savings
Frequently Asked Questions (FAQs)
How to save money as a student fast?
One of the fastest ways to save money is to cut down on your expenses regardless of your age. Try to spend a bit less each month than the previous one. For example, write a clear list of items to save money when grocery shopping. Then, stick to the list and try to find discounts.
Also, try to spend less on entertainment, books, and utility bills. For non-essential expenses, try to reduce your spending. Here is an example of how to budget for this goal:
Non-Essential Budgeting Plan
Spending Category | Regular Budget Amount | Reduced Budget Percentage | New Budget Amount |
$350 | 25% | $262.50 | |
Clothes | $150 | 25% | $112.50 |
Books | $100 | 10% | $90 |
How to save money as a student while using credit cards?
Credit cards are the enemy of savings. These debts might be hard to tackle and can affect your credit, especially if you fail to make your monthly loan payments on time. Later on, you might want to fix your credit fast for big purchases such as a car loan or mortgage.
Credit card debt will pull your credit down, so avoid these cards. Instead, it’s better to use cash and budget each month. This way, you’ll live within your means.
Why can’t students save money?
If you’re wondering why you can’t save money, you’re not the only one. Many students have a hard time saving money. The best way to achieve this goal is by tracking your expenses. First, you should know where each dollar goes. Then, you can make adjustments to start saving money. Getting a part-time job is also an excellent idea.
Sources:
Dorm vs. apartment: Which is cheaper. Debt.org. (2021, December 16). Retrieved June 24, 2022, from https://www.debt.org/students/dorm-vs-apartment/
Eker, T. H., says, M., Marcos, says, C. M., Mensah, C., says, J., Jan, says, S. A. B., Bucheli, S. A., says, J. E., Eker, J., says, F., Fernando, says, F. L., Loaiza, F., says, A. G., G., A., says, M. H., Habibi, M., … Safe And Simple Way To Work Out How Much To Invest – www.Saeed-Khan.com says: (2020, August 28). 6 jars financial management system: T. Harv Eker. T. Harv Eker Blog. Retrieved June 16, 2022, from https://www.harveker.com/blog/6-step-money-managing-system/
Minimum Wage. United States Department of Labor. (n.d.). Retrieved June 9, 2022, from https://www.dol.gov/general/topic/wages/minimumwage
Blackwell, A. (2017, December 7). Credit card debt: 12 common debt habits that lead to financial ruin. HuffPost. Retrieved July 6, 2022, from https://www.huffpost.com/entry/untitled-financial-educat_b_5877758