Featured Post

by instafo | November 12, 2017

A New Post

Categories

Quick Links

Sign up to our Newsletter

[wysija_form id=”2″]

Saving Money in College

by instafo | May 31, 2017

Business Money

A dollar saved is a dollar earned. Hit the million by keeping it.

So you think the secret to becoming a millionaire is to pursue an MBA for the highest-paid job on Wall Street?

Well, sorry to say…you got it all wrong. Dead wrong. You might as well be given a million bucks today, but that still doesn’t qualify you as a millionaire.

What makes those folks part of the top 1% enjoying their lavish lifestyle is the attitude. The attitude of keeping that million in the bank.

Think you’re starting to get it now?

As a student, let’s go over four ways to confirm if you are on the right track with saving and budgeting your money in college.

Run an Actual Budget

Sometimes, all it takes is a little self-discipline.

Overspending is often led by the lack of a plan to allocate your income. It is simple math really: money in, money out, and the numbers never lie.

Here’s how you can set up a smart budget:

  • Make sure to make your budget for every 2 weeks. Using monthly planning is not as effective and weekly planning is time-consuming.
  • Write down all the expenses you have on a program, such as Excel, along with their value (e.g., food $150). Include everything.
  • Deduct all these values from your income value.
  • Readjust the values to make a balanced budget (e.g., if you do not have enough money for food necessity, deduct the amount needed from your entertainment leisure).
  • Put the extra money in your emergency fund.

EXAMPLE:

Income: $1000

If you know your income amount that will be coming in, go ahead and budget your spending before payday. Your decision-making strategy is more objective now than later once the money is in your account.

Expenses:

Food: $150
(Have a look at your past spending and establish an average amount that you meet every paycheck. The goal is to keep it as low as possible, but not to the point of starvation.)

Entertainment: $100
(Subjective to your lifestyle. Remember, you are a student, not the Kardashians or Dan Bilzerian.)

Transportation/Bus: $50

– Household Expenses: $50
(Everything related to hygiene and maintenance: oral products, cleaning supplies, etc.)

Rent: $500

Readjustment: None
(Optional: Any adjustment of the calculation made if the amount could not cover the normal cost. For example, if you were $50 short on paying for food, mention that you took that amount out of your in my entertainment budget. This serves as an indicator for future budgeting.)

Savings (to be placed in your emergency fund): $1000 (Income) – $850 (Expenses) = $150

Budgeting represents 80% of the work to save up money. Not only does it allow you to see where the money goes, but it also gives you “no surprises” whenever you check your account balance.

Buy Used Before New

In the market for a car? Forget the new car smell!

You, my friend, are a student – and simply cannot afford to buy something that loses up to 30% of its value the moment it leaves the parking lot (unless of course, you’re one of those trust-fund babies…in that case, we aren’t talking to you).

Be smart about this, and don’t buy into those spendthrifts who make such reckless decision.

Most of the time, used items work just as good as new but at a fraction of the cost.

Here are a few tips on buying used items:

  • Ask the reason for the sale. This could tell you the condition of the item upfront.
  • Always test the item before buying. For electronic items, have them inspected by a qualified technician.
  • Try to keep the original receipt of the item. This validates that the item has not been stolen and is necessary if there is a warranty that can be used.
  • Cash is king; make sure to do any transaction face-to-face and only pay once you have the item in hand. Unless you are on reputable websites like Amazon, avoid paying with the card. Plus, paying with cash makes you more guilt-conscious of the money leaving you than with a credit card that you don’t have to worry about until the next bill day.
  • Have a look at the free section of websites like Craigslist for items, such as furniture. (People moving out of town often want to get rid of burdened items as soon as possible, thus simply give them away.)

Furthermore, buying used is definitely the strategy to adopt whenever you buy textbooks; they’re obviously cheaper than new, and you can resell them after the semester for nearly the same price.

Sunday Weekly Meal Prep

Food is the real money pit. With the right amount of discipline, this is the portion of your budget that has the biggest impact on saving.

It is far too easy to stop by the nearest food court on your campus or dine out and pay $10 for a meal, which expensively adds up.

How do you save big on food?

  • Limit yourself to three outside-meals per week.
  • Take the amount allocated for food and go grocery shopping.
  • Use your grandma’s habit: bring coupons with you.
  • Prepare your meals for the week on Sunday. You’ll save time and energy.

This literally avoids eating your cash away and having to settle for ramen noodles two days before pay day.

Cut Cost for Accommodation

As a rule of thumb, 50% of your budget should be set aside for rent. If you are above 50%, then you’re living beyond your means.

You should definitely act now because reducing your housing cost takes time.

  • Get a roommate if your apartment allows it. This could potentially cut your spending by half.
  • Find another apartment in an area further from the epicenter of your town, while staying easily accessible with public transit.
  • Renegotiate your rent with your landlord. They tend to lower the price when you sign a multi-year lease.
  • For last resort, move back with your parents until you are financially fit to live on your own. Put that ego on the side, there is no shame in saving money.

Leave that overpriced one bedroom nearby the campus to someone else and save big on your housing rent. The lower it is, the better.

*****

Read up on any advice of your favorite wealthy individual in the world, and you will notice that every one of them has the propensity towards saving. It is one thing to have the highest-paying job in town, but it is something else to stay the richest in town.

And that starts with saving your money.

Do you have a saving strategy of your own? Share it in the comment section below!

Leave a Reply

Your email address will not be published. Required fields are marked *

*