The College Student’s Guide to Saving Money

Photo: Jeff Keen

Possibly one of the most difficult places to hold on to a dollar is in college—assuming that you have money to begin with. You’re probably tempted to go wild and spend everything you get your hands on right now, but it’s a better idea to learn how to save it.

After college, most people need tips on how to save money, but in college, you need a guide. So to get you on the right track, here’s your College Student’s Guide to Saving Money.

Bank Accounts

Probably one of the first things you should do in college is open a checking account and savings account. Here are some ins and outs of opening bank accounts in college.

Finding a Bank/Credit Union

See if your college works with a credit union: Some colleges have their own credit unions while others are closely affiliated with a credit union in town. Consider this first since memberships often come with perks like discounts on amusement park tickets.
Consider a local bank: If there isn’t a credit union to join, you could open an account with a local bank. Often times they’re easier to work with and offer personal touches that national banks don’t.
Use caution with national banks: There are benefits to national banks, the biggest being that you can find them anywhere you travel. But national banks are often stricter (ex. requiring Direct Deposit to avoid fees) so use caution when deciding whether on this route.
Online banks: A number of online banks offer accounts at better interest rates and lower or nonexistent fees and penalties. Consider these banks if you have Direct Deposit or some way to electronically move money into an account.

Opening Accounts

Open a checking account: Most checking accounts require very little or nothing to open. They give you access to your money via checks and are excellent resources for those who need a place to hold their money.
Open a savings account: You should also open a savings account to get an early start on life-long saving. As a college student, it’s not always easy to save, but if you create a budget that leaves room for it, you might be surprised by what you can set aside. To find out more, learn about 10 things you didn’t know about savings accounts.
Look for student savings and checking accounts: Often times, banks offer student accounts that come with fewer restrictions and guidelines. It’s always good to see if a bank offers them before going with standard accounts.
Look for FDIC insurance: You always want to work with a bank that’s insured by the Federal Deposit Insurance Corporation (FDIC). Currently, insurance covers deposits of up to $250,000 if a bank fails.
Read all of the small print: Banks are allowed to impose a number of fees and penalties for reasons like overdrafting an account or not maintaining a minimum balance and they’re not inclined to share those fees. Be sure to find out what those fees are and look for other small print so you’re not surprised by money vanishing from your account.

Managing Accounts

Check your balances frequently: Always check your balances to make sure they’re correct. If you report incorrect balances immediately, the bank can usually investigate the situation and restore your money.
Don’t overdraft your accounts: Whatever you do, don’t take more money out of your account than what is actually in there. Banks will allow you to pull out too much money then kindly charge you penalties for overdrafting the account, so be careful when withdrawing funds. Also, look into overdraft protection, which many banks offer.
Stay above your minimums: Some banks penalize for falling below a minimum daily balance. Find out if this is true of your bank and specific account to avoid penalties.
Don’t write checks that won’t cash: If you’re not sure whether you have enough money in the bank to cover a check you’re about to write, don’t write it. Too many bounced checks can land you on TeleCheck, a system that lists bad check writers and can prevent you from opening accounts in the future.
Follow all the rules: Follow all the rules of your accounts at all times. If you mismanage your account enough and the bank decides to close your account, you could find yourself in ChexSystems, which means you’re listed as a bad banker. In most cases, banks won’t allow you to open an account when you’re in Chexsystems and it takes five years to get taken off the list.
Report if you lose your checkbook or ATM/debit card: If you lose your checkbook or ATM/debit card, report it to your bank immediately to avoid someone having access to your funds.

Money Management

For most students, money management is an afterthought. But learning to manage money is something that not only should be learned now, but continued after graduation. Here are some ways to make great money management decisions that will last for the long haul.

Budgeting Your Money

Look at what’s coming in: The first step to setting up a budget is looking at the money that you have coming in. Whether you have grants, scholarship money, an allowance from your parents or cash from a job, this is the money you’re bringing in.
Look at what’s going out: Next, take a look at the money you have going out. If your tuition, room and board are pulled out of your financial aid or are paid by your parents, they don’t have to be added. But definitely jot down regular bills you may have like food, phone, car payment, etc.
Create a budget: Once you’ve looked at what’s coming in and going out, it’s time to create a budget. Set up amounts that you can spend per month on bills, food, entertainment and emergencies, as well as what you’ll add to your savings account.

Managing Your Money

Honor your budget: The first thing you want to do after creating your budget is honor it by sticking to it. It will help to ensure you actually manage your money well by spending less and saving more.
Add money to your savings account: One good reason to open a savings account is that it makes you feel the pressure to add money to it. Also, because it comes with restrictions (ex. only 3 withdrawals per month), you’ll feel obligated to keep your money in there.
Save up for what you want: If there is something that you want, don’t go buy it if it falls outside of your budget. Instead, add this item to your budget and plan how you can save up for it without spending more than you earn in a month.
Only take what you need from the bank: When you go to the bank for money, only take out what you need. Whenever possible, go inside and receive the specific amount you need from the teller. But if you have to go to an ATM, take the extra out, buy what you need and put the rest away.
Put your change in a jar: If you have change leftover from your purchases, but it in a jar. Over time, you can take the cash to the bank to deposit into your savings account.
Pay your bills on time: Don’t fall behind on your phone, cable, electric, etc. bills since late fees add up to much more than you budget will estimate in costs.

Making Smart Decisions

Don’t spend impulsively: With this being your first time on your own, it’s understandable that you’ll want to make impulse buys. But since you’re now the primary financial decision maker, it’s up to you to refrain from impulse buys for the betterment of your budget.
Don’t succumb to peer pressure: Your friends are likely going to want you to get do just about everything (financially and beyond) that they’re doine. If their ideas don’t match yours, don’t succumb to their peer pressure.
Steer clear of big spenders: You may have friends who don’t pressure you into anything but simply spend a whole lot more than you. To avoid feeling weird when they dine at 5-star restaurants while your budget is set for Burger King, don’t hang out with them when it’s time to spend.
Regularly check on your finances: Once you start making good financial decisions, it’s important to keep them going. So once a year, conduct a financial spring cleaning to stay on track.

Income

Many college students don’t have the opportunity to earn money because they’re too busy studying. But if you’re able to bring in money, why not make the most of the savings opportunities it provides?

Getting a Job

On-campus job: Many campuses offer on-campus employment for students, sometimes through a work-study program. The pay isn’t always good, but it is income, so take advantage of this opportunity—preferably by working in your department of study.
Off-campus job: You could also take on an off-campus job that pays a bit more. However, keep in mind that these jobs usually don’t offer the same flexibility as on-campus jobs because they rely on you more.
Substitute teach: Substitute teachers have very flexible schedules and are usually only required to have two years of college classes under their belts. If you’re a junior with time off during the week and want to earn up to $100 a day, consider signing up as a substitute teacher in your college town.
Paid internship: Probably the best option is to find a paid internship during the school year. You can get tons of experience in your field, earn good money, build your resume and acquire amazing after-graduation networking connections.

Taking Advantage of Free Money

Save grant money: If you receive grant money, which of course doesn’t need to be paid back, instead of going on a wild shopping spree, pay your bills then place at least three-fourths of what’s left in the bank.
Save scholarship dollars: Use the same concept for grants with scholarship dollars and see your savings start to add up.
Be creative with gifts: If you receive birthday/Christmas money, you can put it away in your savings account. If you receive gift cards, consider trading them in for money.

Starting Your Own Business

Provide services to friends: Good at cutting hair, installing hard drives, moving furniture or DJing parties? Consider providing services for your friends that could add up to some quick cash.
Work online: The list of people starting amazing businesses online while in college is growing—possibly the biggest now being Mark Zuckerberg, founder of Facebook. Find out for yourself the benefits of starting an online business then take steps to start your own.
Do contract work for businesses: If you’re learning a lot from your studies and want to prove your worth to local companies while earning money, become a contractor. You’d be surprised by how far this could take you.

Investing Your Money

Consider low-risk investments: Banks offer a number of money-growth options, including money market accounts, certificate of deposits and even interest-bearing savings accounts. Consider them as great ways to save and grow your money.
Check out higher-risk investments: If you’re interested in taking greater risks (i.e. stocks) consider websites like ShareBuilder. This site allows you to invest any amount of money (even $20) and only charges $4 per trade.
Start saving for retirement: If you really want to look toward the future, consider opening an IRA that will allow you to begin saving toward retirement. Unless you already are employed with a major company, you probably don’t have a 401(K), but an IRA can get you on the right track.

Expenses/Purchases

As a student, you know that making purchases can be problematic. Sometimes you have to make purchases but don’t want to spend your money and other times you want to make purchases but don’t have the money. Here are some ways to try to save while spending money in college.

Buying School Supplies and Books

Purchase used books and supplies online: You could cut costs significantly by buying your used books and supplies online. Check for coupon codes to get even deeper discounts.
Share with friends/classmates: Another option is to split the cost of books with a friend or classmate to save. To save majorly on supplies, consider buying in bulk with a group of friends.
Borrow from the library: For books, you could borrow from the library. Take a look at the syllabus to see when the book will be needed then put your name on a waiting list to make sure it will be available.
Buy books from friends: If you have a friend who has a book you need, buy or borrow from them instead of buying a new one from the bookstore.
Take advantage of sales tax holiday: Many states eliminate sales tax on school supplies right before schools starts. Consider your state’s sales tax holiday as a way to save.

Keeping Your Stomach Full

Use coupons: Clip those coupons and look for some online to save big when grocery shopping.
Buy generics: It’s no secret that generic foods are often just as good as brand names. Shop generic to see for yourself.
Eat soup: Soup is one great way to stretch out ingredients while getting the nutrition your working mind needs.
Have pot-luck meals with friends: Get your friends together for potluck dinners to get big meals at a low price.
Lay off the junk: Steer clear of junk food since it adds unnecessary costs to your budget. Also, it contributes to the freshman 15 you’re trying to avoid.
Visit warehouse bulk stores: If you have a Sam’s Club or Costco in your town, get memberships to get items in bulk.
Get food stamps: Some people turn their noses up at Food Stamps, but they can really be of major assistance to students struggling to make ends meet in college. They come in the form of an ATM card nowadays and can offer students up to $300 a month in food.

Making Your House a Home

Live on campus: Living on campus is a good option if you have a scholarship or grants that will cover the costs. This way, many of your expenses are taken care of for you (electric, phone, cable, Internet, food, etc.).
Get an apartment in town with friends: You could also get an apartment in town with several of your friends. Part of the college experience is bonding with your buddies, so why not live together while saving some money in the process?
Find a place through HUD: Most college towns have HUD offices that are willing to provide affordable living to students. Check with a local office to see if you can find a nice place for a small amount of rent.
Buy furniture from other students: Sometimes you can catch a graduating senior who needs to get rid of some furniture. Strike a good deal with a few and see how much you can save.
Visit Craigslist’s free stuff: You can find good deals almost anywhere by looking on Craigslist. But if you visit their “Free” section listed under “For Sale,” you might find a lot of great stuff at no cost.
Decorate creatively: Once you get your place, try to decorate creatively at a low price.

Spending On the Fun Stuff

Partying: Instead of spending some money on a steep cover charge at a local club, attend a Greek party or have a get together in the dorm frequently.
Have a low-cost spring break: Instead of traveling to Cozumel this year, spend your break on campus and have a potluck or throw a BBQ with those who stick around.
Enjoy free activities: Find free activities in your college town and on campus (plays, orchestra events, on-campus movie nights, socials, etc.) to avoid spending money unnecessarily.
Learn how to cheap date: If you’re a guy looking to take your crush out, learn the art of cheap dating.
Pull back from vices: Drinking, cigarettes (and the other smoking activity) are common in college. But do your best to avoid them to not only save money, but be more productive in school.

Credit Cards and Bad Debt

Credit cards and bad debt seem to follow students like a plague. Don’t fall victim to these problems that can haunt you later in life. Get them under control now.

Dealing with credit cards

Step away from credit card offers: While credit card companies are not allowed to heavily advertise to students anymore, you could still fall prey to good deals that could cost you later. Since bad credit follows you for seven years, it’s good to avoid credit card offers unless you definitely have money to pay your balance.
Pay your balance on time: If you do have a credit card to buy books, food or other expenses, don’t forget to pay your balance on time each month to avoid penalties that add up.
Don’t buy what you can’t pay off: Avoid buying that 50-inch plasma TV just because you have money on your credit card. If you’re buying something you can’t pay off within the month, you don’t need it.
Know your rights: Before obtaining a credit card, know your rights via the Credit CARD Act so you’re not taken advantage of.

Controlling your debt

Take smaller student loans: While taking the maximum on your student loan is sometimes tempting, if at all possible, it’s better to take just what you need to pay for school and bills to avoid bigger loan payments down the line.
Avoid buying a car: With gas prices through the roof and regular maintenance costs not being cheap, a car should be the last thing you want. Avoid buying a car–or driving the one you already have–and instead walk, ride or bike or take public transportation to reduce costs significantly.
Protect your identity: Take steps to avoid identity theft so that your money isn’t stolen from your bank, accounts aren’t opened in your name and/or your credit isn’t ruined.

Your School’s Resources and Benefits

You probably have no idea just how many resources a college offers that cost big money in the outside world. A great way to save on your expenses is to use all of the resources your school has to offer.

Career Services

Resume help: Most campuses offer free resume writing assistance. Take advantage of this resource to get a great paying job down the line.
Career advice: Your campus’ career services center probably also has someone available who offers career advice. This can be an expensive service after graduation, so take advantage of it now.

Health Services

On-campus clinic: Before finding a doctor in town and paying for health insurance (or using you parents’ coverage), see if there’s a clinic on campus and make full use of its free or low-cost services.
Dental services: Some college campuses either offer dental services or are closely affiliated with an in-town dentist office that will provide low-cost services. Find out if there’s one for your school.

Student Memberships and Discounts

Amazon: You could join Amazon Student, which offers purchase and shipping discounts.
Student Advantage: Obtaining a Student Advantage Discount Card offers a cash crop of discounts for college students, including deals with travel (Amtrak, Greyhound), technology (Toshiba, T-Mobile), clothes (Foot Locker, Macy’s) and more. It’s a must-have for any college student.
Student Savings Club: This club is another great option for students looking for discounts.
The Student Discount Card: The Student Discount Card is offered to students attending certain colleges in California. It also offers great discounts you don’t want to miss.
Other student discounts: Every place from a movie theater to insurance company offers student discounts. So before paying full price for anything, ask about discounts and be ready to flash your student ID.

Other Resources

Computer labs: Don’t buy a computer if you don’t need one. Instead, use the campus’ computer lab.
School library: Most campus libraries are so extensive that non-students use them for their resources. Take full advantage of them yourself (books, Internet, etc.) to save money.
Student union building: Campuses usually have a student union building that offers video games, free cable and more. Visit it as much as possible to gain access to free services.
Media center: Instead of paying for expensive programs on your computer, visit the campus’ media center to get your high-tech projects done.

Saving money in college is sometimes easier said than done. Hopefully, these tips will get you on the right track to putting money away for your future.