Money is the source of all woes, isn’t that what they say? Between tuition payments, student loans, and textbooks, it’s no wonder that’s the case for college students. The idea of putting money into a savings account while you have so many other things to pay for is almost laughable, but it is possible, and it will help secure your financial future. Nearly 60% of Americans state that they do not have enough money to cover an unexpected $500 expense. Unfortunately, $500 expenses come around all the time, whether they’re in the form of car repairs, doctor or veterinarian costs, or plane tickets for a funeral. You need to be prepared should the worst happen, though with any luck, it won’t.
These tips will help you grow your savings slowly and steadily throughout the year. You’ll be surprised at how much you can save just by choosing to try out one or two.
Open a separate account for savings, but before you do, shop around for the best interest rate. You’re not likely to find an interest rate higher than 1.4%, but even the smallest amounts of interest add up over time. Make sure the bank has a good reputation before you sign on for an account, and ask if there are any requirements. You may find that you must maintain a minimum balance to avoid being penalized; this is unlikely to be a problem since the whole idea of a savings account is that you rarely, if ever, take money out of it, but it’s important to know what you’re signing on for. You may also have to make a minimum deposit to open the account. It’s important to keep your savings and checking accounts separate. Otherwise, you can easily dip into savings when you’re short on cash.
Make everyday purchases on your credit card and put any cash back you earn into your savings account. Most credit cards nowadays offer rewards in some form, the most common being cash back. If you have a cash back rewards card, you’ll likely earn anywhere from 1% to 5% cash back on each of your purchases. At the end of the month, when your credit card comes due, you’ll be able to see how much you’ve earned. Since this is essentially free money, transfer your rewards balance to your savings account each month. This way it can start earning its own interest.
Pay your savings account when you pay your bills. Treat your savings account like it’s one of your bills and pay it before you set aside any money for fun activities. You don’t even have to pretend like it’s an expensive bill. In fact, you could just pretend it’s Netflix, which only costs $10 each month. When you do all of your bill pay, include a fixed amount for savings too. Again, those small amounts add up.
Decide what you can sacrifice and put what you save into your savings account. Speaking of Netflix, if you don’t use it, why are you still paying for it? Do you really need that Amazon Prime membership? Evaluate your habits and determine if you can cut anything out. Whether you decide to cancel a magazine subscription or a meal service, you’re going to save money. Put whatever amount you would have spent each month into your savings account and watch it grow.
If you have a side hustle, put all of those earnings into a savings account. Do you walk dogs? Babysit? Maybe you sell your photographs online? These don’t really count as “real” jobs since you’re busy being a student, but they still provide income. If you can spare it, put the money you earn from these odd jobs into savings, while your other income (work-study, anyone?) is directed to your checking account. It’s likely that your odd jobs aren’t consistent enough to regularly contribute to your bills, so you’re not going to miss that money too much.
Start a change jar. If you carry cash and spend it frequently, a change jar is the easiest savings tactic for you. Every time you come home, empty your pockets or your change purse into a mason jar, a piggy bank, or some other receptacle. When it starts getting heavy (this will happen more quickly than you expect), go to the nearest bank and ask for rolls for coins. Each roll holds a different amount: 50¢ in pennies, $2 in nickels, $5 in dimes, and $10 in quarters. When you have your change rolled, head to your bank and ask to deposit the money into your savings account. If you think you might forget, do it on a schedule! Roll your coins every six months.
Start with small savings goals. As a student, large goals can be impossible and leave you feeling disheartened when you can’t meet them. A small goal, think something along the lines of $1 or $5 each week, is easily attainable (just cut out one bus ride or the Tic Tacs you buy weekly). When you hit your goal, reward yourself with ice cream at the dining hall or a 30-minute study break that you wouldn’t normally take. Reevaluate each year and raise your goals if possible.
Do a quarterly purge and sell anything you don’t want to keep. You don’t have to live a minimalist lifestyle to find things that you no longer use. People outgrow clothes, move to new locations, and stop using things all the time. If you have gently used items, list them on Facebook Marketplace, Craigslist, or Ebay, or host a yard sale. You probably won’t earn hundreds, but you’ll earn more than if you just threw out your unwanted items. Put everything you earn into your savings account.
Set up an automatic transfer from your checking account into savings each time you get paid. This is the easiest way to start saving money. Each time you receive a paycheck, ask your bank to transfer a percentage or a set amount of it into your savings account. It doesn’t have to be much, but setting up this mindless transfer is a great way to ensure that your savings gets a boost twice a month. When you start a new job or get a raise, you can change the transfer amount.
Put all unexpected money into your savings account. We all have birthdays and graduations, and sometimes these celebrations come with monetary gifts. Anything you get from Grandma or Uncle Joe can go straight into savings, especially since it’s not money you were counting on to make rent or pay the electric bill. Sometimes unexpected money is even more unexpected: a reimbursement from your healthcare provider, a rebate from something you purchased, or a check for participating in a study. While it would be fun to go to the movies, your savings account (and therefore your future) will benefit more.
Do the 52-week challenge. This one is fun, and you’ll end up with over $1,300 more in savings over the course of a year than if you didn’t play. The challenge is this: The first week of a new year, put $52 into savings. The next week, put in $51, then $50, and so forth. The final week of the year you’ll only have to put in $1. You could also do the challenge backwards, putting $1 into savings the first week, then $2, then $3, etc. It’s a fun way to hold yourself accountable and the amounts aren’t too unattainable.
Do some extra math and save what you don’t spend. Let’s say you go to a bakery on a Saturday. You’re tempted by the $3 scone, but end up only buying the $1 coffee. If you could have comfortably bought the scone, but resisted, put the money that you would have spent on the scone into savings. This can work any way you want. You could be tempted to order pizza and have it delivered to your dorm, but instead you pick it up at the store, saving the delivery fee. That delivery fee, then, could be put into your savings account.
No one expects you to put thousands of dollars into savings overnight, but you should be prepared to handle unexpected charges if they come up. Going into debt because you got a flat tire shouldn’t be an option, and it doesn’t have to be. These tips will make you a savings master in no time. Do you have any savings advice for students hoping to grow their accounts?