Every student knows that getting their college education is an expensive endeavour. Is it possible to save money in college?
This is the time in your life when you can set up a financial plan that will eventually allow you to do the things that you really want to later on when you are in a higher financial bracket.
Financial tips for students that want to save money in college.
Work while you are in school – Even if you can only work weekends or a few hours a week you should try to earn some of your own money while you are in college. There are lots of opportunities for college students ranging from working in restaurants or stores to tutoring to working in their potential fields. No matter what your future job, you’ll gain experience in time management and interpersonal communications as well as earning some extra cash on the side. There are also many online jobs for students.
Save money – Although you might think it is impossible, now is the best time to start putting money away in a savings account. You might not be earning much money right now, which is why it is an ideal time to learn to save, even with very little income.
A good place to start is to save ten percent of your income each month. If that’s too much start with less or even just a dollar amount like ten dollars per week. The money you save will quickly add up and you will learn that you can live on a lot less then you originally anticipated.
Open a Roth IRA – The Roth IRA is one of the best investments that you can make while you are in college. They are very flexible and allow you to withdraw your principle investment with no penalty. Later on you may even be able to take out the earnings from the account for a specific purpose, like purchasing your first home.
Learn to be frugal – Now is the time to learn how to live with less and how to budget your money. The messages on television and in magazines will tell you otherwise by trying to convince you that you need more clothes and more shoes and more electronics but it is simply not true. If you live on less now you will be less swayed by these advertisements in the future, making it even easier to save money.
Don’t go overboard on credit cards – Student credit cards are great things. They allow you to make reservations and big purchases and build up your credit profile. However, they can be dangerous if used incorrectly.
For starters, you should only use your credit card up to the amount that you are able to pay back each month, that way you avoid costly interest fees. If you are unable to pay off the bill one month then set the card aside and do not use it again until it is paid off. If you find yourself in this situation more often than not, then cut up the credit card so you stop using them all together.
Ignore confusing financial advice – If someone tries to get you to make an investment that you don’t understand, walk away from it. This could mean that the advice is not sound or that you need to get more education about the world of finance before you take another step. Either way you should only make financial investments that you understand completely. You might even consider taking some business of financial courses, even if they are out of your major area of study. You might be able to use them to fill in elective credits and learn about personal finance in the process.
Cut back on education costs – Going away to college is expensive. If you need to cut costs, consider living at home and going to a local college. You will save loads of money on tuition and still be able to eat at home, saving even more money. If there is not a university near your home look into on line colleges. An on line degree is just as good as any degree and it has the added benefit of allowing you to work at your own pace. Even if you just take the first couple of years of basic courses and then go off to university you will have saved yourself a bundle.
Have fun creatively – Now is the time in your life when you should go on adventures and do fun things with your college friends. Do not hold back on those adventures, but find creative ways to make them happen. You can still travel, just do it by way of backpacking instead of staying at a five star hotel. Seek out friends who are like minded and you will have all the experiences you want, even on a limited budget.
There’s no reason not to start planning for your financial future right now. Even as a university student you can earn money, save money, and have lots of fun. You just have to be determined to start building a solid financial base and willing to make a few sacrifices. Don’t allow yourself to be swayed by those free spending classmates, just keep your eye on the prize and someday you will be financially free too.
This has been another guest post from Timothy Ng, a personal finance writer.