Today’s guest post comes from Valentina Wilson, personal finance blogger at Bestdebtconsolidation.org.
Are you a college student?
Do you have a tendency to overspend? If yes, then you might fall into the debt spending trap.
In our country, student debt crossed $1.5 trillion last year, becoming the second source of consumer debt.
According to the U.S. Federal Reserve, about 75% of college students use credit cards, and the average card balance is about $3,173 dollars.
Since summer is underway, it’s the perfect time to start thinking about savvy spending!
First and foremost, set a budget for yourself and differentiate your needs from your wants. You should be primarily focused on your needs rather than wants. Budget-savvy students manage their finances well, and you should borrow some ideas to achieve financial solvency.
While choosing a degree program, make sure you evaluate the associated costs too.
Let’s look at five recommendation to help you save even more during your college years.
1. Save on transport expenses.
This can be the biggest saving strategy if you stay on campus or close by your university because your transportation costs will be reduced to zero.
According to a report by AAA (American Automobile Association), avoiding cars can help you save about $6,370 per year.
In some cities, buying a monthly transportation pass for trains or buses can cost as little as $45 to $100. In some instances, you can even get extra discounts just for being a student!
In Cincinnati, for example, metro fare cards for students are $53 per semester. In Nashville, a monthly public transportation pass costs $44 per semester.
Walking (or biking) can save you thousands of dollars each semester and keep your wallet healthy.
Still, if you need a car, then consider hiring a car for the specific day. But always compare different rental agencies prior to booking.
2. Share accommodations.
Yes, you got it right! This can be a way for you to save almost half of your living expenses if you share accommodations with other folks.
Try to room with the maximum number of permissible members so that your share gets minimized.
But before that, you should keep the following things in mind:
- Try to go for unfurnished or partly furnished properties as fully furnished properties will cost you more. Check out websites that offer free basic furniture like Freecycle.
- If you need to do some repairs on rented property, do it yourself. In return, ask for a reduction in rent from your landlord.
3. Opt for student friendly banks.
- Look for banks that offer free student accounts and basic services. Opting for these accounts will save you from the traditional expenses of maintaining a standard bank account.
- Try to avoid the attractive credit card offers you’ll receive as soon as high school graduation nears. If you *have* to have one, use these tips:
- Compare different banks. Compare each card’s APR (Annual Percentage Rate), cashback and rewards, annual fees, credit limit, etc. Review each and every card’s policies.
- Always behave wisely while paying by credit card. Regardless who uses your card, the cardholder is always responsible for the debt AS WELL AS the interest on the total debt.
- Make sure you keep your credit card safe, and don’t let others use it.
Worst-case scenario, if you find yourself overwhelmed by debt, you cal always get the help of debt consolidation to help you out of it. With a good debt consolidation plan, may end up paying LESS that what you actually owe. Yes, you heard it right!
Debt consolidation and debt settlement are two ways you can relieve your debt burden. However, it’s always best to use good spending habits early on so you won’t need these debt relief strategies.
4. Be tech savvy!
Gone are the days when students would fully depend on big, overpriced textbooks. Now, technology is omnipresent.
Instead of costly, clunky, expensive hardbacks, you can find free resources online, read books on your phone, and download articles on the go.
Still, if you don’t have any other option except textbooks, you can buy from the e-commerce websites which usually offer discounts.
Being tech-savvy can save you hundreds of dollars! (As an aside, always look for discounts that are provided solely to students. Discounts might include concert tickets, metro passes, coupons for restaurants, and even movie tickets.)
Instead of paying for entertainment like Netflix or Hulu, you should use the resources provided in your university’s e-library.
Lastly, you can even opt for budget tracking software like Mint.com, YNAB etc., to help with tracking, budgeting, and limiting your expenses.
5. Be an astute foodaholic.
This is my favorite strategy of all because I absolutely love food! More importantly, it can lead to the most significant savings: up to $600 per year!
First, consider selecting the least expensive meal plan at your school. Opting for the most cost-effective choice can create savings of almost $200 per semester.
Second, consider cooking most of your meals at home (or in your dorm)! Consider buying groceries in bulk with friends so you can cut costs and minimize expensive grocery bills. You can buy large quantities at discounted rates at stores like Walmart, Costco, or Sams.
Do your best not to spend beyond your limits.
When you create regular, habitual savings habits as a teen, you’ll be more likely to lead a debt free life in the future.
Valentina Wilson is a personal financial blogger who loves to write about how we can manage our personal finances in better ways. She loves to travel and explore different places alone. Follow her on twitter at @Valenti11423079 and visit Bestdebtconsolidation.org.