How to Save Money as a College Student

College is one of the best investments you can make in your own future. That said, it can still be tricky to pay for higher education, especially if you're planning on taking a full course load. Knowing how to save money in college and make smart financial decisions is vitally important for your bank account and your future. The more you can save now, the less you may need to pay later!

You can take advantage of several saving strategies and wise financial steps to reduce college costs across the board. We’ll explore all of those below, so read on. 

The average cost of college

Everyone knows that college is expensive. The question is: how expensive?

On average, U.S. college students spend $38,270 per year, accounting for tuition plus all their books, supplies, and living expenses. While in-state students can expect to pay much less for tuition (an average of $9,750 per year compared to $27,457 per year for out-of-state students), there’s no denying that earning a four-year degree costs a pretty penny. Add up the average yearly costs for four years, and you get a total cost of $153,080 for college.

If the average cost of higher education has you worried, don’t be. Here are a few effective ways to save money and pay for college, plus set yourself up for financial success in the future.

Smart strategies for saving money in college

Why save cash in college? It's simple: the more you save, the less you need to take out through loans and the more you can put toward your college bills early on. Remember that loan interest accumulates on the loan total as time goes on, so the faster you pay down the principal balance, the more affordable the interest is over the loan’s term.

Complete the FAFSA every year and apply for grants and scholarships

Most students complete the Free Application for Federal Student Aid (FAFSA) when they first apply to college. But did you know you can reapply for the FAFSA for each year you attend school?

With new opportunities to qualify for federal aid like the Pell Grant or federal scholarships, it’s a great idea to renew your application each academic year. Every bit of aid helps, and even if you didn't qualify for a certain aid package for one year, you might qualify for it the next.

Of course, there are plenty of other places to apply for grants and scholarships to help cover some costs of college. Depending on your major, your university’s college might offer excellent scholarships or aid options. Additional aid sources, such as scholarships.com, College Board, and ScholarshipOwl, are also good places to go hunting for aid.

Buy used textbooks

New textbooks are sometimes priced very highly (and some undergraduate students spend over $1,200 per year on them). One of the best ways to save money in college is to buy or rent used textbooks instead.

The differences between new and used books are often minimal, but you might save hundreds of dollars each year by opting for a book with a little wear and tear over a brand-new one. Check your campus library for these books or look at online bookstores to snag great deals. You may also be able to find PDF versions of your class textbooks that are much cheaper than their paper counterparts.

Use all of your school amenities

Plenty of colleges offer amenities, perks, and discounts to their students. You can and should take advantage of these as often as possible!

For instance, is gym access included with your tuition? There's no need to pay for a separate membership at a different gym if you can get in a workout after class for free. Or maybe your school offers regular discounts on things like room decor and electronics. Don’t forget that many local businesses offer student discounts, too! These small savings can seriously add up over time, so try to get as much value from your college as possible. You’re already paying for it, after all! 

Meal prep

School meals usually aren't included in the price of tuition. You have to pay extra for a meal plan or fork over money each time you eat at one of the on-campus restaurants.

If you have the means, such as a dorm hall that has a kitchenette or attend school close to home, for example, you may be able to save money by meal prepping. It can be less expensive than going out to eat all the time. Take time to weigh the pros and cons of meal plans versus buying your own to see which makes the most sense for you.

Get a part-time job

School takes a lot of time, but you might be able to squeeze in some shifts for a part-time job on campus or nearby. A part-time job is the perfect way to earn extra money each month, which you can use to pay for everyday expenses or save for the future. 

Look for openings at local restaurants, retail stores, and even positions at your school – your college may need help with administrative tasks or other work. Some colleges offer breaks in room and board for Resident Assistances (RAs). You can also seek out short-term gigs like pet sitting, online tutoring, or freelance work if your skills are useful in a specific niche (think writing, design, or coding). These kinds of low-commitment work are great ways to earn extra cash and build up your resume.

Put money into a savings account

With so many smart ways to save, you might wonder how you should use the extra money. One wise option is to put the money into savings.

Stashing cash into a savings account can keep it safe but, if you choose the right savings account, you can even build upon your funds through dividends. 

On top of that, opening a savings account and contributing money each month establishes a history with a financial institution and can help learn ways to build your creditworthiness. This simple step, in turn, may make it easier for you to apply for more loans or credit cards in the future. 

In the end, you can withdraw money from your savings account to pay off your college costs after you graduate if you need to!

Consider cashback cards (only if you avoid interest)

Lots of credit cards have cashback offers or programs and low introductory rates for qualifying applicants. Even if you don’t get a low intro rate on the card, if you can manage to pay off your card’s balance in full each month, you’re essentially earning extra cash without even trying!  

Here’s an example:

• You spend a total of $2,000 on everyday expenses, like groceries, gas, utilities, etc.
• Your card gives you 2.00% cashback on all those purchases
• You get 2.00% cashback ($20) that you can apply to your credit card bill or trade in for gift cards to your favorite places

It’s not much, but cashback cards can be a good way to stretch your money a little further and build your credit score at the same time.  

Set and keep a monthly budget

This tip is a good one to remember throughout your life: build a monthly budget, then stick to it. Add up all your income, calculate your expenses, and make adjustments so you spend less than you earn and have some cash to tuck away for savings.

It’s all too easy to spend money quickly, particularly when the prices for classes, books, meals, and housing are obscured. By practicing regular budgeting and mindful watching of your monthly bills you can make big strides to avoid overspending by accident and build good financial habits for later.

One of the best savings strategies for college students (and everyone else) is the 50/30/20 rule. Here’s how it works:

• Budget 50% of your income for essentials, like food
• Budget 30% for flexible wants – say, hanging out with your friends
• Budget 20% for savings or paying down debt

Setting up your finances with this rule in place is a smart way to keep your spending manageable and still enjoy your time in college.

Invest in a Roth IRA

If you budget carefully and still have a little cash left over each month, where should you save it? A Roth IRA might be a great idea. Though most commonly used for retirement savings, you can also use a Roth IRA for qualified educational expenses, like tuition, books, and more.

Your contributions to a Roth IRA are taxed the same year you add them to your account. As a low-income student, your tax rate may be virtually zero. Any money you put into a Roth IRA that grows is untaxed, which makes it a great option for long-term savings.

Saving Money in College with Sharonview Credit Union 

As you work toward saving money in college, it's important to have the right support on your financial journey. Sharonview Federal Credit Union is committed to helping students succeed, not only through our community engagement scholarships but also through our partnerships with local colleges and universities like the University of North Carolina and Wofford College.

With resources like our University Branch in Charlotte, NC and other locations, Sharonview is here to assist our college-ready members with planning for educational expenses and life after college. With personalized guidance and a variety of products, if you're looking for ways to better manage your money, don't hesitate to reach out. Visit a branch, give us a call, or head to our contact page to get started today.