There’s no dispute – college is costly! A recent study by the Federal Reserve Bank of New York found that a whopping 44.7 million Americans still have outstanding student debt.
And it’s no surprise why: college tuition and rent cost a lot of money. To top that off, it’s hard to take up a job when you’re a student. Sure you could wait tables for minimum wage, but you’d often be so bogged down with coursework that you might not be able to commit to regular working hours.
So you might be wondering how to save money as a student without working? The steps are simple. Firstly, start a budget. Second, reduce any unnecessary spending. Thirdly, try to increase your income from sources other than work. And lastly, pay down debt as quickly as possible!
Let’s go through each of these steps below!
1. Start a Budget and Track Your Spending
If you’re anything like most college students, you’re probably doing a little (or more than a little) unnecessary spending. That’s why you can start to save more by creating a budget.
What’s a budget and how do you create one?
The first rule to a healthy budget is that you can’t spend more money than you have. So start by figuring out how much money you have to spend each month.
So say you’re a student and are probably living off of either savings, grants, or loans. Take that amount of money you have and divide it by the months it needs to last you.
For example, if your $5,000 student loan has to last 6 months, you have about $830 a month. Add any monthly income you have and you’ve got your monthly budget. Easy, right?
Now that you’ve got the income sussed, it’s time to start tracking your spending! This is actually really easy to do with modern apps like Mint.
Mint lets you enter and track everything you spend as you spend it. You can also link your bank account to track automated expenses like bills and subscriptions.
And boom. You now know how much money you have to spend and where it’s all going! Now you won’t be surprised to find out that you spent all your money at restaurants last week.
With this budget, you now have your income and outgoings all clearly worked out. So it’s on to the next step.
2. Reduce Any Discretionary Spending
Take a look at the budget you just figured out. If you have some extra money each month, good for you!
But if not, one of the best ways to save money in college is by cutting your discretionary spending.
Discretionary spending is spending that is not essential. Examples of essential expenses are things like your rent and grocery bill. Non-essential spending refers to things like nights out on the town, your Netflix subscription, etc.
The goal isn’t to cut all discretionary spending, especially if your budget allows for it. You can’t have fun in college without treating yourself once in a while, but it really does have to be once in a while.
Cut what you can. For the things that you can’t live without, try choosing cheaper, more budget-friendly alternatives.
Common Forms of Discretionary Spending (and How to Reduce Them!)
Drinks with friends can turn into a huge expense. Instead of going out, why don’t you host at your place?
Have everyone bring their own drinks (BYO). A 6-pack costs the same as one or two drinks at a bar.
Vacations and travel costs are another major expense. Skip that spring break trip and stay home instead. If you really want to get out of town, go somewhere nearby so it doesn’t cost as much.
As a bonus, try staying with a friend or family member. Then you won’t have to pay as much for food or hotel costs.
Expensive gifts will eat up your money faster than you realize. As much as you love your friends and family, try giving them something cheaper this holiday season.
Look for creative and personal gift ideas. Cards and homemade videos convey sincerity without eating your budget. You’re a student. They’ll understand.
Lastly, cut your entertainment bill. Netflix and Spotify together will run you around $25 a month.
Only pay for the services you actually use. For the ones you want to keep, get together with some friends and split the expenses on a group account.
In general, choosing cheap alternatives and splitting bills with friends are both great ways to save money in college.
3. Increase Your Income Without Working
Did you know that you don’t need a job to get a little extra monthly income? Try a few of these ideas.
Get a High-Yield Bank Account
Checking and savings accounts accrue interest. Some banks offer pretty high-interest rates that can actually put a little money into your pocket.
Columbia Bank offers up to 2% APY on its high yield checking accounts. That’s almost the same as the yield on a Treasury bond!
Utilize Your Assets
Do you have a spare room in your apartment that you can rent out? This will reduce your rent and give you some extra cash.
You could also try renting out advertising space on your car. Get creative; you might be able to make money off of something you already own.
Do Freelance Work
Okay, so freelance work is technically a type of work, and this article is about how to save money as a student without working, but it’s still a lot better than a standard job. You won’t be tied down with a schedule, so you can fit it in around your classes.
If you have any skills like writing or consulting, try using a platform like Upwork or Fiverr. You can get paid to do small jobs that you’re already good at.
Drive a Lyft or Uber:
If you have a car, try driving an Uber. You’ll make money and get to know your way around town.
Tutor other students:
As a student, you’re learning a lot about your class material. If you find that you’re usually on top of your schoolwork, try tutoring other students for a small fee. (This also looks great when you’re trying to get into grad school!)
Get creative. If you have a skill, market it! You’ll get both money and job experience without having a real job.
Sell Stuff You Don’t Need
Everybody has extra stuff. Some of it might be able to make you some extra money.
When you replace your phone or laptop, try selling the old one. Used tech can sell for hundreds of dollars, especially if it’s not that old. Broken tech might still be worth something for the parts.
4. Pay Down Your Debt
Remember how bank accounts accrue interest? That interest is going in your pocket. Unfortunately, the interest on your student loans is something that you have to pay.
Start by avoiding debt like the plague. Don’t put items on credit cards. Don’t take out extra loans.
Remember: everything you take out, you have to pay back.
If you already have credit card debt, pay it down as soon as you can. This will keep it from building interest.
Interest compounds. This means that once the interest is added to your loan, you have to pay interest on that interest! Yikes.
If you don’t get a handle on it early, you’ll have to pay even more money in the long run.
It’s not easy to save money in college. You have tuition, rent, and social demands that all require money. That’s why it’s important that you’re intentional about saving money in college.
Each step that we outlined above is simple methods that are easy to start. But don’t let their simplicity fool you. Taken together, these are very powerful ways to save more money when you’re a student.
Your biggest challenge will probably be to stick with your gameplan. This will require discipline. For that, find a like-minded friend that can act as an accountability partner for you.
Have you ever saved money successfully in college? Share your experiences with us in the comments section!