One thing that never crosses the minds of many college students is saving money. It seems like they have all been bitten by the instant gratification bug. All they do is spend, spend, and spend until there is nothing left to spend. While it is impossible to deny yourself some luxuries in life, it is important to keep a reserve of funds to deal with unforeseeable future events, such as emergencies.
Learning to save early in life gives you the discipline, attitude, patience, endurance and experience needed to make sound financial decisions in future. Also, savings give you a head start in life when it comes to investment opportunities. However, saving does not mean denying yourself everything to the point of starvation. You can still maintain some level of comfort while setting aside a small portion of your income. Here are easy tips to help you save money, without compromising on your shopping habits.
Keep track of your spending
The first and most important step is to know your daily expenditure. This will allow you to know the amount of money you spend in non-essentials. Think of it this way: an archer is likely not to hit the target, if he aims in the darkness. In the same vein, you will not be able to save money if you are not familiar with how you spend it. List all the items in your budget sheet, grouping them as essentials and non-essentials. Cross out the non-essentials, you can live comfortably without them.
The game of saving is matter of sacrifice and opportunity cost. For instance, what would be the opportunity cost of getting that beautiful dress? Maybe a week’s worth of takeaway meals. Therefore, for you to get the dress you will have to forego the takeaway meals for a week. We are not saying however that you should sacrifice your meals for a trip to the shopping mall. What we mean is that you can sacrifice one item to get another. It is advisable to always sacrifice items with a short lifespan for the ones with a longer lifespan. For instance, a week’s worth of takeaway meals will only keep you satisfied for a week, while a good dress can last for several years.
Make a budget and stick to it
After tracking your spending habits, the next step is to make a monthly budget and stick to it. Whether you are relying on your parents’ providence or you have a part-time job, make sure you pay yourself first. This means that you should always take 10% of your income and stash it away as savings. Then, you can budget the remaining 90% frugally. While budgeting, always start with the essentials such as food and housing, before setting aside some amount for other things.
If you love shopping, then create a miscellaneous account that you can always use to buy clothes and accessories. However, ensure that you honor the budget plan. Do not be tempted to steal from the essentials account to satisfy your shopping desires. When the essentials account is affected, you may find yourself starving or living uncomfortably, which may push you to go for the savings. The transition will be hard at first, however your lifestyle will adjust automatically to the new budget. As you get better and better at saving, you will find yourself spending less than the planned budget, which will allow you to save even more money at the end of each saving cycle.
Avoid the credit card craze
We would advise you to stay away from credit cards entirely, however a credit card may come in handy during emergencies. In case you get one while still in college, make sure you use it wisely. Remember a credit card is a loan service that you will most definitely pay for when you use it. Do not go into a shopping binge with your credit card, because the interests involved may bind you for a longtime. Only use it to purchase items that you can easily afford, which will allow you to pay off the debt quickly to avoid late penalties.
In the process, you will be building your credit score, which will improve your eligibility for bigger loans in future. Use a credit card when you have to and not when you want to, so that you do not get into credit card debt like many college students. Furthermore, you will be able to save the interests and late payment fees to your savings account. The amount may not be much, but remember it is the tiniest of things that make a big difference.
Avoid eating out frequently
Going for takeaways and eat outs on a daily basis can be very expensive. Therefore, avoid the restaurants at all cost. We know it will be hard and painful, however for the purpose of saving this is one area that you will just have to make sacrifice. You can go out once in a while, but ensure that you set a small budget for it. Do not go out splurging to compensate for the days that you missed. Stick to the budget with utmost tenacity, even if you will appear stingy in the process.
Your college cafeteria probably has a meal plan, why don’t you use it. Eating from the college cafeteria will save you a lot of money. If however you fancy making your own food, then get a rice cooker. It can be used to prepare various types of dishes. There are cheaper units that cost less than $50 that you can take advantage of. Alternatively, you can get a toaster oven that will allow you to prepare so many types of food including meats, vegetables, pastries and even pizza. Also, always carry packed lunch to avoid grabbing a quick snack on the way.
Go for cheaper housing
Living in campus dorms is generally cheaper than living off campus. However, if you prefer living away from campus, then look for a cheap and manageable apartment. Alternatively, you may live with a roommate and split the costs equally. Apart from the house rent, you will also have to take care of utility bills that may eat a substantial amount of your money, such as water and electric bills. Ensure the taps are always closed and the lights are off when you are not using them. Wear a sweater and keep the thermostat at a lower setting to conserve more energy. You will also have to pay for cable television. However, if you are subscribed to online streaming services like Netflix, Hulu and HBO Go, then cable television is really not necessary.
When it comes to shopping, look for cheaper alternatives to whatever you love buying. You can cut down on the number of costly products. For instance, if you were to buy three costly dresses, then you can buy one costly dress and save the amount for the two. Alternatively, you may visit any of the discount and thrifts shops near you to purchase several good dresses at a fraction of the money needed for one expensive dress. If you are worried about the quality of cheap clothes, then we would advise you to spend twice as much and own half as much.
Hang out with friends who are savvy at saving
Remember the phrase “show me your friends?” Well, it also applies in this case. The friends you spend so much time with will determine if you will save money or not. Hang out with spendthrifts and they will influence you to go into a splurge of unnecessary spending. Spend time with thrifty friends and they will make you feel guilty for overspending. Thrifty friends will help you appreciate each dollar in your hand and they will mold you into a financially sound person.
Create a savings account in your local bank
Operating with a checking account only is what leads many students to overspend. It is also unheard of to claim that you are saving money when it is in your hands. Go to your local bank account and create a savings account. Make sure you use online banking, as it is easier to track your spending habits. In case you have a side job, then you should set up an automated savings account, where a portion of your salary will go directly to your savings account. This will be the best plan for you, if you have not yet mastered the ability to let go of money once it gets into your hands.
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Examples of cheaper alternatives that you should definitely try:
- Shopping at thrift shops, flea markets or yard sales instead of high-end shops.
- Rent a movie instead of going to the cinema.
- Prepare homemade meals instead of going to the restaurants.
- Pay for online subscriptions like Netflix, Hulu, etc. instead of cable.
- Exercise at home instead of signing up for gym membership.
- Borrow books from the library instead of purchasing new ones.
- Use public transport instead of purchasing a car.
Saving is an integral part of every student’s life in college. Unfortunately, most of them choose to ignore it and at the end of their college lives, they are heavily in debt with college fees and credit card debt. We hope after reading this you will be motivated to make sound financial decisions that will make you live a stress free life in future.