Note: This post was submitted to Student Caffé by Clay Pitsenbarger. We would like to thank him for his submission and credit him as the author of this blog post.
Let’s face it, we all want to save money. Whether it is going to be used for next month’s rent, next semester’s tuition, or spring break in Panama City, saving money in college is especially difficult. Even on just a part-time student schedule, finding the time to get to class, study, and work enough hours to save a little bit extra is hard, not to mention what it’s like to try to work while also being a full-time student. With some planning and hard work, though, anyone can make it happen. Knowing that you have enough money for whatever it is that you’re saving for is a huge relief. Here are some tips to help you save money this summer.
1. Save up for something.
Just because you are saving money, doesn’t mean that you never get to spend it. Setting a goal to aim for and knowing there is a reward at the end makes the savings process a little easier and a little less boring. Depending on how much you’re trying to save, it may seem like putting money into the bank is preventing you from doing other things. Having something to save for puts it into perspective; save more money now to have more fun (or less debt) later.
2. Make a budget.
Once you know what you’re saving for, making a budget is the next step to getting there. There are plenty of free online tools that can help you make a budget, so there are no excuses not to sit down and do it. Making a budget allows you to track where all of your money is going. How much are you spending on housing? What percentage of your income is going toward new clothes? What percentage goes toward food? For many people, students especially, it is shocking to see how much money is spent each month on unnecessary things.
Apps like Mint or NerdWallet can be super helpful in figuring out your budget. Both are able to track all of your account activity and alert you when you go over your set spending limit. Once you know where your money is going on a regular basis, you can focus on lifestyle or shopping changes to streamline your spending and free up more funds for your savings account.
3. Cut out unnecessary expenses.
After setting a budget, finding unnecessary expenses is fairly easy. That expensive monthly cable bill? Gone. Swap it out for Netflix instead. How about that Friday night at the bar where your tab was in the triple digits? No more of those. Upgraded phone plan with international minutes? Not anymore!
Look through your budget and find ways to cut back. It’s important to note that saving money doesn’t mean cutting fun out of your life entirely. What it does mean is spending your money in a smarter fashion. Rather than heading out for drinks, grab a six pack and head home. Instead of paying for a gym membership, sign up for free exercise classes on campus. Opt for a less expensive appetizer or split an entrée with a friend when you’re out to dinner, and only go out when it’s a special occasion.
A vehicle is another major hit to your budget that should be evaluated when trying to save. Parking, maintenance, insurance, and car payments add up quickly. Most college towns are bike-friendly and have excellent public transportation systems. If you can make it work, going carless is an easy way to make your savings account grow quickly and dramatically.
4. Get a job.
Working during school is difficult. Trying to manage a full course load, study, and have a social life, in addition to working a job is overwhelming. Summer, though, is the perfect time to get a full-time job. Working 40 hours a week and receiving a steady paycheck makes saving seem effortless, especially compared to working odd jobs while school’s in session.
After setting your budget, plan to set aside a certain percentage of your income each pay period for your savings account. Experts typically recommend that you save at least 20% of each paycheck. It’s possible to save even more, depending on your summer expenses and your wages. Furthermore, if you can stomach it, moving back in with your parents and working in your hometown can make saving money over the summer even easier.
5. Be careful with credit cards.
Credit cards can be great. They offer an awesome safety net for big, unexpected expenses like car repairs or vet bills, but they can also lead to bad spending habits. Many credit card companies prey on broke college students, taking advantage of those who are financially uneducated. Interest stacks up quickly and, of course, most first-time credit cards have insanely high interest rates. When looking for your first credit card, look for one with no annual fee, a low credit limit, and a fair interest rate, and use it to build credit. Do your research before applying!
If you already have a credit card, make sure to use it wisely. Capitalize on cash rewards and try to pay off your card each month. This helps build good credit for future loans when it comes time to buy a car or home.
Know that saving is hard, but it’s not impossible.
While saving as a college student is especially difficult, summer is the best time of year to start. Pick something to save for, whether it’s a short- or long-term goal, and make it happen. Map out your expenses and find ways to keep them as low as possible. Moving home for the summer and working at a local business cuts out the cost of rent and is an easy way to start saving quickly. It may not be the most fun way to spend your summer, but knowing that there is a light at the end of the tunnel makes it a little easier. Saving money doesn’t mean not spending it, it just means spending smarter.