College may be the first time that many young adults will start having to manage their own money. For some, it may be the first time they actually have their own money to manage. This makes college a great time to start developing good money-saving habits. Learning how to get into the habit of saving money is just as important at this time as learning how to budget or spend money wisely. Here are 7 great tips on how to start saving money in college.
1. Free is always best
While there is nothing wrong with dropping $100 or more on tickets to your favourite band or other events, making this a weekly or monthly habit is not a good idea. Learn to be on the lookout for free or discounted prices on events and save your big dollars for just a few of the events you want most to attend.
2. Always be on the lookout for side gigs
Whether it's participating in a research study, delivering flowers on Valentine's day or selling items you no longer use on the internet, there are almost always ways to earn a little extra cash here and there. While you may not want to juggle more than one part-time job while you are in school, always be on the lookout for ways to earn a few extra dollars here and there. Over time, those few extra dollars can really add up.
3. Create a budget and stick with it
It's never too early to start budgeting money. This is particularly true if you receive a large lump sum of money at the beginning of a semester that may have to last you several months or if your income is sporadic. If nothing else, it's always a good idea to write down all of your base expenses so you know the minimum amount of money you need each month to live on. From there you can budget things like food, clothes, personal items and other expenses.
4. Always sock away a percentage of your income
Whether you make $10 from driving a friend to the airport or $100 a week from a part-time job, always put a percentage of your income in savings. Whether you save quarters in a gallon jug, dollars in your sock drawer or invest in an IRA, saving money is an important habit to get into. While it may seem somewhat silly to save 10% of your income when you only make $300 or $400 a month, the important thing is to get into the habit of setting aside a portion of every dollar that comes in.
5. Write down every dollar you spend
One of the first things most financial planners will tell you is that you need to know where your money is going. Spending $5 on a latte may not seem like much, but when you add that up over the course of a month, you may realize you spent nearly $500 just on coffee alone. Writing down every dollar that you spend will help you understand exactly where all your money is going and help you make better decisions about how to spend (and save) it.
6. Use cash
Studies have shown again and again that people spend less money when they use cash over credit. The reason for this is a psychological disconnect between seeing the actual currency and just swiping a card. When you use cash instead of credit, you will naturally and inherently spend less money and the less you spend, the more you save.
7. Shop in person first, then check deals online
While you can often get better deals on the internet than in a standing store, internet shopping often makes purchasing too easy, which can lead to overspending. One of the main keys to saving money is spending less money. If you make it a habit to physically go to a store when you need something and then check online prices after, you will be making more conscientious choices about what to spend your money on. One of the main things to avoid when it comes to saving money is unconscious spending. The more you are aware of exactly how, where, when and what you are spending your money on, the less likely you are to spend it frivolously.
Saving money does not only make you proud of yourself, in addition, but you can also treat yourself to a wonderful trip to see the world more or even register for a profitable course or improve your talent by joining an art class.
Published by Sarah Smith