Financial literacy is an essential skill for college students. Sadly, most students who enter college have never had to budget or manage their money.
It’s not surprising that students often find themselves in a financial bind, having to call home for money or relying on credit cards or loans to pay expenses.
First things first: Understand the difference between “wants" and “needs." In an economy that encourages everyone to spend whenever they feel like it, many young people have never been taught to distinguish between expenses that are necessary and those that are based on desires. Once you grasp the distinction between the two, you’ll be able to make financial decisions accordingly. Is this something you need or simply something you want?
If you pose this question and act on it before you make a purchase, it is likely to have a positive impact on your finances. You may be surprised by the number of items we purchase that are simply unnecessary. If you don’t have the cash in your budget, don’t buy it.
Here are seven other tips to help you save money and tame your budget:
Once you get your student identification card, you’re in the money — it’s like a permanent discount coupon. Businesses near campus usually offer student discounts when you show your ID card. You can save on entertainment, cultural exhibits, groceries, travel, and more. Look for discounts everywhere (even online), and don’t let your ID sit idly by.
Since freshmen are required to purchase some sort of meal plan, make it a practice to eat in the cafeteria at least once a day. Resist the urge to order fast food or buy snacks from the campus store. You’re paying for the meal plan, and if you don’t use it because you picked something up at a local restaurant, you’ve effectively paid for that meal twice.
Here’s a tip: If you want to save even more money, don’t purchase the full meal plan. Colleges often encourage students to choose this option, but it’s rare that students eat three meals a day. Find a plan that best suits your eating habits.
College campuses offer all sorts of free entertainment, including intramural sports competitions, student plays, and film series. Venture off campus and find art galleries or concerts in the park. You may be surprised by how much money you can save taking advantage of these opportunities.
Unless it’s required, never buy new textbooks from the campus bookstore. Look for used copies, purchase them from students who took the course recently, or look online for textbook bargains. For other creative ways to save more on your books (like checking out textbooks at the library), check out our article: 5 Alternative Ways to Find College Textbooks. If you’re really strapped for cash, there are sites available that allow you to rent textbooks. You can also sell your used textbooks online for some quick cash.
Use your debit card, student account, or cash to pay for everything because each option allows you to spend only as much as you have in your account. Understand that credit card companies prey on college students. While it may be easy to get a card, it’s even easier to pull it out and use it. Racking up credit card debt, coupled with high interest rates, happens more quickly than students realize. A good rule of thumb is not to make the purchase if you don’t have the cash to pay for it.
Coupon clipping is a smart way for students to save money. With all the smartphone apps available, it’s easy to check for available coupons before you make a purchase. For example, the app SnipSnap lets you redeem offers by converting pictures you take of printed coupons into electronic versions. The Coupons App allows you to search, save, and share coupons with friends.
Use apps like Mint and Goodbudget to keep track of every purchase you make. By keeping an eye on your spending, you can see where your money is going and evaluate your budget. If you see you’re putting too much towards Starbucks treats, you can adjust your spending accordingly. The small purchases add up; you’ll be amazed at how quickly $1 becomes $10 and $10 becomes $100.
Here’s a list other budgeting apps to explore: Best Budgeting and Personal Finance Apps.
For some excellent tips on how to be a frugal college student, SmartCollegeVisit.com has a Frugal Student Tip Series. They discuss creative ways for students to save money in college. Also, check out Noodle’s series of articles about college, where you can read expert tips about paying for college and navigating campus life without breaking the bank.