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How can I manage money better as a student?

I have always been about savings, but it seems harder now that I have more things to pay out-of-pocket.

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John’s Answer

Kennedee now that you’re in college, it’s likely that you are in charge of your own financial affairs more so than when you lived at home and functioned mostly as part of your parents’ economic universe. Unfortunately, it’s way too easy to neglect your finances when there are so many other challenges to meet and adjustments to make regarding college life. But you simply cannot begin your adulthood with bad money habits, and college is an excellent place for you to decide to take charge of your personal economy and be responsible with your money.

This is essential. You need to determine the amount of money flowing your way from all sources: parents and relatives, financial aid and scholarships, student loans, and any income from your own employment. Then you have to estimate your expenses: books, bills, toiletries, entertainment, etc. Put all of the categories and numbers into a spreadsheet, and try to make everything balance, with a little left over for emergencies, and if possible, savings. Now you have to commit to sticking to your budget. Straying from your financial blueprint defeats its purpose and risks pushing you into debt. So when you feel the urge to spend impulsively, particularly on something that you don’t really need, go back and check the budget. Let it be your guide and master. Don’t jeopardize your college career by creating a hole you can’t dig out of. Create a routine for yourself that includes a regular accounting of your finances. By keeping careful records of what you’ve paid out and what you have left in your account(s) to cover the remainder of your monthly expenses, you’ll soon have a very clear picture of your financial situation. This financial self-knowledge is key to keeping yourself on track. It’s not that you have to know every detail down to the last penny, but having a good idea of when you can hit the ATM for a few spare bucks, and when you have to rein in your appetite for an expensive meal off-campus, will make your life calmer and allow you to worry about more important matters — like your grades.

There is not a need to purchase a new textbook, if you can find a used one for a much reduced price. If you have to buy new, remember that campus prices are almost always higher than online retailers like Amazon. These days, you may also be able to order e-books for an e-reader or laptop and pocket the difference between the virtual and actual text. Also, remember that if you’re moving into a dorm room, someone else is moving out. Maybe you can get a used refrigerator or coffee pot from someone on campus. Recycling helps the environment and saves money. If you live off-campus, forget about buying the latest designer furniture from Sweden. There are secondhand stores that can furnish your student apartment just as easily. And you’d be surprised at the great stuff that you can get at a yard sale. The point is, this is the time of life to ratchet down your sophisticated tastes and go for the simple and inexpensive. The good money habits you begin to practice in college will serve you well during your years there and well into your post-graduate life. Make learning how to use money intelligently a part of your college education.

Yes, college is a lot of work. You’ve got a full load of courses, term papers to write and lots of studying to do. And of course you also deserve free time to socialize and indulge in extracurricular activities. But the money you can earn from working part time while you are in school can actually supply a great portion, if not all, of your discretionary funds. Besides, there is nothing that compares with the self-esteem you will garner by earning your own money. Most colleges have work-study programs that allow you to create a work schedule around your schooling. The pay is usually not that great, but then again, neither is the labor generally all that hard. You may wind up dialing for dollars for the alumni fund, stacking books in the library, or manning your dorm office for a few hours at night and on weekends. Look off-campus for restaurant or retail jobs with part-time hours. If you work summers, make sure that you put some of that income away for use during the school year. You might as well get used to working and saving. You’ll be doing it for the rest of your life.

Hope this was helpful Kennedee

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Aurora’s Answer

A first step would be to sit down and write down all of your expenses on a monthly basis as well as your income.

1.Start with your monthly income
2 Then add up your bills which you must pay every month. Any there any bills that you can reduce? Maybe cancelling some streaming services and sticking to one or two? Maybe calling the cell phone company to ask for a discount (It won't work every time but worth a try)
3. Then go into food and give yourself a budget - this could range from $150+/ a month for an individual
4. Anything else could go into savings.

P.S. If you have enough leftover money I would recommend having a "fun budget" every month, which can be used when you want to buy something or do something fun. If you don't spend this "Fun budget" you can roll it over to the next month. That way you can keep track of how much you're spending on things that are not necessities and still be able to save.

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Mark’s Answer

Make a budget. Try to predict how much you are going to spend and how much you are going to save every month. The budget needs to cover almost everything. You should even plan for the unexpected (ie. a car repair or doctor visit). Your budget will never be exact, but if you track how much you are spending and saving and comparing it to how much you budgeted, you'll learn to adapt the budget to be more accurate.

Use an application like Mint to track your spending. Use your debit card and the application to categorize your spending and look at it frequently and closely. You'll probably be surprised at where your money is actually going. Focus on the biggest spending areas. For example, if you go out to eat frequently you'll probably soon realize you are spending more at restaurants than you are on a car payment.

If you pay attention to your budget and spending habits you'll spend more wisely.

Focus on the big spending first, and on payments that are recurring. In today's world subscriptions are all the rage and they can really add up.

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Lisa’s Answer

Hi Kennedee!

Great question - this is definitely something I wish I thought about more in college. One thing I wish I had done was limit my credit card use to emergencies only. Once I had access to a credit card, it was so easy to get the balance up and it took me several years after college to get it all paid down. If you don't have the cash, you should not spend the money (other than emergencies-groceries, gas, car repair..).

Definitely get a job if you can - there are some jobs that can be flexible - so you can pick up more hours when you have breaks from school. Working full time on school breaks (especially after sophomore year) is important and sets you up well for the future.

If you have access to a kitchen - try to go food shopping and start cooking more often and minimize ordering out. If you drink coffee buy an inexpensive coffee maker - it is amazing how much you will save!

Lastly, as mentioned above, review all your monthly bills/charges and get rid of anything that is not a must have. Even the $5-$10/month charges will add up.

Good luck!

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J.’s Answer

My advice would be to write everything down and commit to having a budget. Even as an adult, you have impulses buy that marked up chocolate bar next to the cashier while you're paying for groceries.

1) What is your monthly income from all avenues?
2) What are your monthly expenses?
- Do you have any bills that you can reduce?
- Research if there are any student discounts prior to purchasing any items.
- Does your employer have a tuition assistance program?
* I would recommend using an app to keep track of spending where it shows you the breakdown into categories. This way you can see if
you are "splurging" on items and if you can cut back in some areas so you can put more money into savings.
3) Anything that is of excess goes into your savings.

What helps me is having a separate bank account at a different bank where a percentage of my paycheck goes into that account. I don't see the money, I don't look at the money so I don't think about spending the money. Out of sight, out of mind. When it gets tough to stick to your budget, think back to what you are saving for.

I think the most important thing to learn at a young age is to not compare yourself to other people. If Joe has the latest model phone, you don't need the latest model phone.

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Yasemin’s Answer

Hi Kennedee! There is some great advice already, I'll just add from my personal experience! Honestly, I was always careful with my budget and buying; for example I worked three jobs in college and even though I wanted a car I knew I wouldn't make enough to pay the payments and insurance as well. I was lucky to carpool with my parents since we lived close and most of the time I would just be careful with what I buy. It can be difficult but I think it's important to know what you make and what you can spend and sometimes even though we might want things, I guess maturing is knowing what we can spend money and what we have to be careful with!

I hope this helps!
Best of luck!

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Gloria’s Answer

Hi Kennedee,

The best way to get a hold on money matters if to have a detailed budget. Make sure that you know what your regular expenses are and have them in front of you in a visual way. I simply use an Excel document which makes using formulas for math rather easy. Then you can simply plug in your actual expenses. For example, for me, the power bill fluctuates from month to month. I budget for a generic high end number and then update the document when the actual bill comes in. Your challenge here is to document things that you consider out of pocket - a cup of coffee from a coffee shop, gas, snacks. To help you handle money, you need to be able to visualize that money. You should also incorporate how much you can drop into savings so you always have an emergency fund for those unexpected expenses.


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Sunny’s Answer

Hi Kennedee,

It is great that you have these questions early in your life! Learning how to save money is very beneficial for your future.

I would like to recommend you record your expenses. I use "Spending" app to monitor my expenses and cash flow. There are several default categories for expenses: shopping, eating out, utilities, fuel, gifts, etc. By categorizing your expenses, you will be able to see where you spend the most money and how the expenses fluctuate month by month. It can also give you insights where you can possibly spend less. As you know, fixed expenses (i.e., utilities) are hard to control, but eating out and snack money are usually adjustable. It relatatively costs less to shop for groceries to cook home meals than eat out regularly.

Another thing is to know your goal. What would you like to do with the saved money? If there is a clear goal, it will definitely boost your effort to save more money.

Good luck!