Finance Globe

U.S. financial and economic topics from several finance writers.


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The Student's Guide to Saving Money

Budget carefully and stay within your limit. Yes, you need a budget. A good budget is essential to good money management at every stage of life, no matter how much or how little you earn. Having a budget means that you are in control of your spending - a must if you want to be sure you can pay your bills every month and still have money for some of the fun stuff. A good budget should be realistic and allow for some flexibility, and should also include a contribution to your savings plan.

Pay your bills on time. Creditors typically charge late fees of about $30 to $40, and service providers typically charge $5 to $10 for late payments. We all forget about a due date at one time or another, so put your bill payments on auto-drive with your bank's online bill-pay. Set up recurring payments to go out about a week before the due date. If your payment amounts change monthly, it only takes a minute to log in to online banking and change the payment amount. Just make sure you could have the funds before the payment goes out so you don't get hit with overdraft fees.

Avoid debt. You'll have a rough start if you graduate with thousand's of dollars worth of student loans plus a hefty credit card balance before you've even started your career. Avoid using credit unless you plan on paying the balance in full each month by the end of the grace period to avoid finance charges. And no matter what, don't get caught up paying the minimum payment unless you want to stay in debt for decades.

Buy used textbooks and resell them afterward. Used books are an easy way to save cash on a repeat expense throughout your college years. Your campus bookstore may be your first choice for convenience, but a Google search on used textbooks will provide you with a number of online retailers that buy and sell used books. Be sure to compare prices, including shipping, tax, and other costs that may affect your total price. Even better, leave out the middlemen, and do your dealings directly with another student who has or needs books - you'll both get better prices that way.

Consider going without a car. Owning a car is expensive - the purchase itself, interest charges, insurance, gas, parking permits, routine maintenance, and even the possibility of a break-down and tow bill. If you live on campus, a car might easily be an unnecessary expense. Even if you don't live on campus, you could cheaply get from here-to-there by public transportation or by carpooling with another student who could use a little gas money in exchange for the ride.

Your food budget is probably one of the most flexible expenses you have. For example, a steak dinner out can easily cost $20 or more, but you can literally eat for 20 cents if you make some ramen noodles at home. We all deserve to go out to dinner once in a while, but save where it's easy so that you can afford to. Pack a lunch more often, refill bottles with water at home instead of buying it everyday, and stock up on your favorite grocery items when they're on sale. And if you're getting tired of ramen noodles but they work for your budget, try tossing in some chopped veggies or shredded deli meat - pretty tasty.

Entertainment is also a flexible expense. You work hard and deserve to have some leisure time, but having too much fun can wreak havoc on your budget and your GPA. If you need to tighten your spending, start looking for low-cost or free activities. Rent a DVD instead of going to the theatre to save big on the movie ticket and the snacks. Beers at home is a lot more affordable than bar-hopping (and you won't have to worry if your designated driver has self-discipline). Take advantage of the library, the parks, or free concerts. And crazy friends can be just as entertaining as anything you might pay for. When you must pay for entertainment, look for facilities that offer student discounts.

Sometimes, spending more at first will save you money in the long run. There's nothing wrong with forking over the cash to buy a pricey item if it will provide you with years of entertainment, just don't run up debt to purchase it. A pair of in-line skates, a Nintendo Wii, or top-of-the-line hiking gear may all be great things to spend your extra money on if you will use them often for years to come. A quality item with a high entertainment value can be a good investment if it contributes to spending less on other forms of entertainment.

Avoid boredom. Being bored can be an excuse to spend money, and it can get really expensive if it becomes a habit. And boredom spending is often the worst kind of spending, often leaving the buyer feeling guilty for wasting the money on something bought impulsively - buyer's remorse. Get involved in campus activities, sports, clubs, or hobbies to keep busy so you don't get bored and start looking for ways to spend money.

When you must go shopping, hunt for bargains. Shopping is one of those cures for boredom that can get really expensive. But if you're going to do it, at least try to control your costs. Thrift stores, garage sales, and flea markets are a fun way to find some good deals. You may have to sift through a lot of junk to find those gems that you feel are worth taking home, but it's an easy way to pass the day without spending lots of money. And if you do spend money, you're likely to be happy with getting your find at such a good price.
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Tuesday, 14 July 2020

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