Going into college, students are exposed to people from all walks of life with different cultures, ethnicity, religion, and more. But there is one trait that most students share: their wallets are empty, and bank accounts are drained. The common phrase of being a broke college student has consistently haunted campuses around the world. But hope is not yet lost; there are methods and steps that can be taken to help reduce the financial strains that students face.
Get A Job & Monetize Your Skills
First and foremost, college students need to have consistent income flowing into their bank accounts. Without this income, students would never be able to sustain themselves or save any money. Therefore, finding a decent-paying job that does not cut into your schedule too intensely is imperative. With this, you can improve upon some of your skills while gaining good work experience for a regular and consistent payday.
Another method of producing income would be to monetize any skills you possess. Such as turning your hobbies into a side hustle–whether that be teaching someone how to play an instrument, selling drawings or paintings that you create, or charging people for photoshoots. With the way social media connects trillions of people at a time, you can see quick results if you connect with people on your campus through trending platforms to promote your goods and services.
Wait on Purchasing the Car
For college students, purchasing a car is a popular decision. And why not? Having a car tends to open many doors: it invites transportation around and off-campus, allows for trips with friends, and feels like another big step towards adulthood. But between paying off car loans, insurance, gas, maintenance expense, and more, a car becomes a very heavy financial burden for students to carry.
Rather than buying your own car, a solid alternative would be using public transportation that has a lower cost. Another option can be to purchase a bike or skateboard, which will provide you mobility and some light exercise throughout the day while costing you a lot less.
If you are set on using a car for transportation, perhaps you and a couple of friends can carpool and split the total costs to take some of the burdens off one person. You can also use your car to work for DoorDash or any other similar delivery job to make money to cover or supplement the vehicle’s cost.
Avoid Housing Costs
Throughout their college journey, thousands of students opt to live within the dorms of their University. People fail to realize that when they do this, they close out the opportunity to save tons of capital throughout their years in college. In many cases, a University will inflate the price of living in a dorm to accumulate more revenue. Therefore, many students should know that renting out a local apartment may be much cheaper than living in the dorms. Additionally, if they split rent costs with friends or family, thousands of dollars can be saved each semester. Even going to a local college will save tons of money because you would live at home, saving you more money you would have spent on rent.
Capitalizing on Student Discounts
Many companies and businesses have engaged in offering student discounts for their products and services to attract a younger audience. We often see this from companies like Netflix or Spotify, where they have subscriptions specifically targeting college students. These “college/student” subscriptions come at a lower cost than the typical subscription because they know that college students do not have as much capital as the average adult who has graduated from college and has several years of experience in the workforce. You can also find student discounts in stores that have a partnership with your university. There will be days within the week when you can shop at these stores and receive a discount simply for being a student.
Purchasing textbooks is one of those expenditures that seemed to sneak up on many people. According to CBS News, “…the average cost of college textbooks has risen four times faster than the rate of inflation over the past 10 years.” With the drastic increase in textbook prices, it would be much better for students to rent or buy used books rather than purchasing new ones. Numerous portals are available for students to find pre-owned books at a much lower cost. Sites like AbeBooks, Amazon, and eBay are valuable sites that give you access to a wide selection of used textbooks to rent or buy for an affordable price. Sometimes colleges even have group chats where students will exchange booklets at a low cost to help one another avoid paying the unnecessary fees for new textbooks.
Establish A Budget
If you don’t already have one, establishing a budget is an excellent course of action. It will help you keep track of your expenses and prevent you from making impulsive purchases. Ultimately, helping you better manage your finances and saving you more money.
Start your budget by mapping out your income and fixed expenses, then determine how much money you are willing to spend based on what is left in your account. In the ideal scenario, you would have money left over each week that you can place in a savings account to begin creating any emergency funds for yourself. In case you forget how much you can spend per week, you can set up automatic alerts to avoid overspending. Taking these precautions will dramatically encourage smart spending and saving habits.
High-Yielding Savings Account
As mentioned above, students have the option of setting aside some of their income to deposit into a savings account. Recently, high-yielding interest savings accounts have been trending because more online banks are being established. Offering their services solely online allows these banks to avoid the typical cost of having a physical presence–e.g., rent and electricity–and, thus, provide customers with higher interest rates over the years.
How much interest? Well, interest rates are constantly fluctuating depending on the current economic environment. It is not strange to see interest rates range anywhere between 0.50% to around 4%, depending on the bank. As you can see, if college students were to set aside a portion of their paycheck each month to deposit into their savings accounts, they would be able to notice small yet consistent financial growth.
These savings accounts are by no means a way to see substantial growth in your capital but will generate more money than you originally deposited if they are properly left in the account. Rather, these accounts should be seen as an emergency fund that is constantly growing in case of any unexpected necessary expenses you may have in the future. Regardless, high-yielding savings accounts provide an extremely safe and guaranteed method of increasing capital over the years without requiring you to do much of anything aside from depositing the money into an account, which takes a matter of seconds.
Summing It All Up
Being financially prepared to go to college can be a daunting task for most, and maintaining said financial stronghold is even harder. So it is up to you to be diligent and intentional when handling your money; our society is flooded with products and services that are enticing to consumers. Thus, it is imperative that you can differentiate between what is and is not a necessary expense. You never know what tomorrow may bring, so start preparing financially for any unforeseen events that may come up in your life (i.e., COVID-19). Remember, practicing good spending and saving habits now will help ensure you a financially secure future.