Photo (cc) by 401(K) 2012
When I was in college, I made $8.50 an hour from a part-time job in retail. I earned about $900 a month, lived off campus, and had bills to pay. Money was tight.
During my freshman and sophomore years, I did laundry at my parents’ house to save on quarters. I also got pretty creative with my ramen cooking. But by my junior year, I was tired of not being able to do more. Having to turn down weekend road trips because I couldn’t afford gas or staying home on Friday nights because I ran out of money wasn’t a lifestyle I wanted.
So I wised up, started watching my money like a hawk, and got financially fit. I learned that being a college student doesn’t mean being broke. There are ways to spend your money carefully while still taking advantage of all that college offers.
1. Start with a budget
You’ll hear about budgets for the rest of your adult life because you need one. Knowing where your money goes is key to keeping financially fit. Budgeting isn’t hard to do. Here is how I do it.
- Figure out your income. Calculate how much you bring in each month from student loans, part-time jobs, or help from your parents. You’ll need to spend less than this each month to keep ahead of your debt.
- List the amount of every fixed expense you have – like rent, car insurance, or Internet service.
- Estimate your variable expenses. Some of your expenses – like utility bills, gas, and groceries – vary every month. Look at old bills or bank statements to estimate these costs.
- Be realistic about your extras. Don’t forget to include dining out, movie tickets, and trips to the bar into your budget. If you spend that money every month, account for it.
2. Lower your school expenses
The College Board recently said that students are paying an average of $8,655 in tuition and fees for the 2012-2013 school year, but you don’t have to pay for it all yourself. In 5 Steps to Dramatically Reduce the Cost of College, we wrote about the different financial aid options you have – like applying for the FAFSA or finding a private scholarship through sites like the College Board’s scholarship database.
Then there are the textbooks. The National Association of College Stores says you’ll spend about $655 a year on those, but you can slash those costs significantly. Check out 11 Ways to Save Big on College Textbooks for a bunch of ideas beyond just buying used – like renting textbooks, buying the cheaper digital version, and reselling your old books for cash at the end of the semester.
3. Find ways to lower your bills
You should have enough money to pay your school expenses, cover your housing costs and other bills, and still have some money left over to put into savings and use for fun. If you don’t, it’s time to trim your expenses.
The single best thing I did for my budget? I moved. I went from a pricier one-bedroom apartment for $550 a month to a rental house with three roommates. The four of us split the cost of rent, utilities, cable, and Internet. After the move, I ended up spending less a month for everything than I used to for rent alone.
If you can’t move, look for other ways to cut costs like dropping your cable subscription – you don’t need it. (Don’t believe me? Check out You Don’t Have to Pay for Cable TV.) Then look at your wireless bill. You’re probably paying for something you don’t need like roadside assistance or unlimited text messaging. (Check out 5 Ways to Save on Your Cell Phone Bill for more tips.) Even something easy like switching out your old standard light bulbs for CFLs can save $40 over the life of one light bulb, according to Energy Star. And if you think your utility bills are too high, call your provider. Many offer a free energy audit, even on rentals. If you’ve got leaks or drafty windows, ask your landlord to make repairs.
4. Do the math on daily charges
Those small purchases you make every day cost more than you think. Hitting up the gas station for an overpriced liter of soda ($2.50 in my area) after buying late-night Taco Bell (about $5 if you buy a combo meal) for the third time in a week is going to eat away at your bank account (and decrease the chances of losing the “freshman 15”). You won’t know how much those nightly fast food runs cost until you add them up at the end of the week or month – $22.50 per week and $90 per month for the example above.
Instead, plan ahead and use the grocery store for treats and snacks. If you’re afraid of blowing through a 12-pack of Mountain Dew in two days – an especially relevant concern if you have roommates – then keep the soda tucked away in your closet. One of my roommates in college kept a mini fridge in her room and knew what was in it at all times.
5. Control your weekend expenses
When I was in college, socializing was one of my biggest expenses because I didn’t realize how much it all added up. Friday night after work, I’d spend $30 on a dinner out with friends, then another $30 at the bar. Repeat that on Saturday, and by Sunday morning I had spent $120 in one weekend. In a month it was up to $480. Over the four years I spent in college, my grand total would have been $23,040 if I hadn’t wised up – but I did. I got really good at having fun without blowing my paycheck. For example:
- Skip the pricey outings and have a house party instead. I had small parties at my house on the weekends. Everyone brought over food and drinks. Instead of spending $60 in one night, I spent less than $15.
- Volunteer. Volunteering is a great way to meet new people, makes you feel great about yourself, and it’s free.
- Join a club. It may not seem like your thing at first, but those clubs are a great way to meet people and they usually put out free food during meetings. Even if you end up not liking it, you can say you tried and got a free meal to boot.
- Have a movie night. You know what is more fun than spending $11 on a movie ticket for a flick you may end up hating? Have a few friends bring over their favorite DVD and host a movie marathon night.