Okay, if I were a college student, I think I’d be sputtering right now: “Saving? Saving what? I’m borrowing money just to live!”
But hear me out.
It’s tough to manage your money when you’re in college. Borrowing thousands of dollars can feel overwhelming—and creating a game plan for paying it back can feel impossible when you don’t know what life holds after graduation. It’s no surprise that some students would rather put off even thinking about finances until after graduation.
A better solution? Treat your borrowed money just like you would your earned money, and start creating habits right now that you want to have in place when you graduate. And that includes saving.
You probably don’t plan to spend every penny you earn once you’re in the working world—so don’t plan to spend every penny you borrow for college, or earn at your part-time job. Build savings into the equation from day one.
If you’re earning a paycheck, try to skim some of it into a separate savings account right off the top. Better if you can do this automatically, so you never see the money in your primary account.
As for your loan money—try doing the same thing. After your tuition, room and board are covered, try dropping some of it (maybe shoot for 10% to start) into a savings account and see where that leaves you for the semester. At this point you’ll want to work out a budget, listing every conceivable expense for the rest of the semester. If it appears your expenses will be covered, look at this savings account as a “rainy day” fund—something besides a credit card to fall back on when you have an unexpected expense.
Once you’ve got some “off-the-top” savings building, look for other ways to save:
Re-assess your big expenses first.
Housing costs. Could you get a cheaper place, or take on another roommate? As things shake up at lease-renewal time, give serious thought to how you might save money in this area. Trimming your housing expenses is a quick way to put some serious cash back in your pocket.
Transportation. Cars are inherently expensive—even if paid for. Gas, parking, and repairs all add up. If these expenses are up to you, consider how to cut back. Public transportation, walking, and biking are all things to consider if you’re driving a lot.
And remember that the little things add up.
Look over all your monthly expenses with fresh eyes. Do you need a cable or satellite dish package or could you ditch it and go with a cheaper monthly movie subscription service? Are you eating out or buying coffee too often? Cutting back on simple food expenses is a quick way to save $10 a week or more.