Ask the Readers: Can College Students Save Money?

I think College is a time when peer pressure is really high — I work on a college campus and have seen the waves of “must haves,” from a walk man years ago to the ipods of today. Students with cell phones at one ear and an ipod ear piece in the other are very very common. As are students who say they must have a car to get to the job they have that the must have to support the car…. It must be hard to decide against participating in that kind of very expensive culture.
And, I think it is also hard to adopt a new mindset and not to expect to live as you did in high school, when your needs weren’t as great, and there was more parental support.
Also you are being constantly told by advertisements (from tv to bar windows) how people your age should be spending their time/money… and the message isn’t “save.”

And in response to #48 — that’s really true about the peer pressure… which is why, if you want to buy one of those things, post on your college’s bulletin boards looking to buy an ipod for $50-75 instead of full price. You KNOW that there’s some early adopter out there who would view that as free money!

I think it might be possible to graduate debt-free, but probably not to save much. If I hadn’t gotten married and started having kids during college, I would likely have graduated debt-free (barring expensive emergencies). I started college in 1999. Here’s how I did it, and I fully recognize that most people don’t have these advantages:

1) I had the best academic scholarship offered by my school. My $1500/semester tuition was paid for, plus I got 1/2 that in cash, which paid for books.
2) I lived at home (no expenses) and worked during the summer for $10-$11/hour. I was able to make $4000 and use this for the next year’s living expenses – this would give me $500/month, which I found to be *plenty*. I did not waste money on excessive food/treats, entertainment, car payments, cell phone, etc.
3) I drove my parents’ 1974 Chevelle. I was on their insurance, but I paid for gas. Back in 1999, gas was $1/gallon, so this was not a big deal. I drove to the grocery store and on a VERY OCCASIONAL treat run. If my parents wanted to pay for gas for me to drive home, I would do that too.
4) My rent was $215/month. Sure it was a dump, but I didn’t really care.
5) I was on my parents’ health insurance. I was on their car insurance. I used my mom’s cell phone. This was back before cell phones were nearly universal, so the only person I talked to on the cell phone was my family.

Again, I realize that many kids will not have those advantages. I guess that through very careful budgeting, I probably could have saved a little.

Once I got married, all this went out the window. I did start getting Pell grants, but I was no longer on my parents’ health or car insurance, and since I had my first baby within a year, I could no longer work full time during the summer. Husband and I both worked part-time all year and went to school all year. By the time I graduated, we had taken out $10,000 loans between us. Husband’s student loans from before we married and after I graduated are another point entirely

It sounds to me like you have competing goals right now — being a student and being fully independent may not be possible at the same time. Did you move out because you had to move closer to school, or because you wanted to be on your own? Is it possible to move back home? Or find a different living arrangement with fewer costs?

College is challenging for a variety of reasons. If you’re a full-time student then your most important job is to do your best work for the classroom. This may be the only time you’ll have in life to really focus on developing your skills and interests with the support of like-minded peers and professors. Take advantage of it.

If your priorities have changed so that you’re more concerned about achieving independence and financial stability, then maybe school should go on the back burner for awhile. Cut back to part-time, or take a break for a semester.

It sounds like the current situation, trying to do both of these things, just isn’t working for you. Since most of us end up taking out student loans or getting major help from our parents to finish school in 4 or 5 years, worrying about saving money seems a little silly. Get through school first, and do it with the minimal amount of debt and expense possible. Visit your financial aid office and ask for help, live on or near campus so you can ditch having a car, etc. True independence (and the responsibilities that come with it) is just around the corner and will be here soon enough.

I went to a private university as an undergrad, lived on-campus, didn’t own a car, took work-study jobs, lived and worked at home during breaks, and still felt plenty independent. The money I earned was my own, and I was proud that my single mom never had to help me with living expenses (she helped with tuition). Yes, I took out some student loans to cover what my scholarships didn’t, but overall the cost to achieve my degree was reasonable and I’m a better person for the experience.

Good luck!

After having just graduated, all I can say is that if you want to actually SAVE money, you must live like a pauper.

Borrow everything. I didn’t bring a car to school. I didn’t bring a cell phone to school. I walked everywhere and bought cheap food. I spent my down time on free activities. You have to sacrifice.

I made it through college without any debt, but just barely, but then I continued on to university. Since I’d depleted all my money in college, I was stone broke all the time in university.

I ended up starting my own business to make ends meet, and it’s still going strong today (in addition to my full-time job I got with my degrees from school).

I agree about cutting expenses as much as possible. But healthy snacks in bulk (raisins, granola, etc) and keep a baggie in your backpack all the time. That $0.75/$1/$2 at the vending machine when you’re starving before your next class adds up a lot faster than you’d think.

Pack your lunch if you can. It’s cheaper and healthier. My school cafeteria had loads of healthy options, but they were more than I could afford. Faced with the choice between the $3 French fries or the $7 salad, I ended up eating a lot of greasy fries

Buy books secondhand. Wait until after the first day of classes to do so. the prof will usually tell you if s/he actually uses the textbook on the first day. If s/he doesn’t, ask. Sometimes you don’t need it at all!

@ Web Tech Gal:
In addition to what TosaJen said, not all school programs allow for summers off to live at home while still in school. I had one “summer break” during 1st year. I lived at home (yes, for free) that summer and worked my ass off at the local grocery store, but the rest of my 6 years of post-secondary was full of classes and co-op jobs, none of which were closer than 3 hours to my parents’ house. Living there after that first summer was simply not an option.

As for after graduation, not everyone’s parents are just going to give them a free ride “for a few years” following graduation (or even be able to afford to do so if they wanted to), and honestly I think it’s crazy to expect parents to do so.

@Web Tech Gal – Your parents must be nice people or something. I could never live at home. That first summer after freshman year of college was the last time I will spend more than a week at home. My mother is too controlling, and I’m responsible for myself, so it grates, and always has, its just worse after you get away from it for a while.

Wait tables…it’s the easiest way to make a lot of money in a short amount of time and a lot of the cash you make goes unreported/tax free. You also get a lot of free food(if your nice to the cooks) which will save you money on groceries.

Not recommending this to anybody . . . but I quit 6 months after I started! Watching those student loan statements and working for $6/hour made me sick. So . . . yes I quit school full-time and picked up classes as time allowed in my full-time work schedule. 13 years later I’m still taking classes but my employer is paying for them. Now, my goal is to graduate college before my son (currently 10 years old) starts school. This is definitely a non-traditional path but it’s worked for me and I feel that I’m pleasantly in a comparable position with my peers of the same age that were traditional students.

Sometimes there just isn’t enough to go around. I was in a challenging program that sometimes required 50+ hours, and I had a student job that required 20+ hours a week. I had some time for a boyfriend, and that was about it.

I probably could have had less debt (I had $20K on graduation, half on credit cards), but I would have still had some even with great money skills. I had no family financial support. I am debt free less than three years later, even with two children. We’ve had only one income for about two years of that time. We are now enjoying the thrill of no longer living like students, and gradually building up our lifestyle and savings.

I knew I could expect a significant increase in earning potential from my degree – which is why the program was so challenging and required 50+ hours a week. I can’t say that I have great memories of college. It was stressful and exhausting. I graduated feeling burned out.

Had my parents offered me financial help, I absolutely would have taken it so that I could actually enjoy at least one quarter of college.

I think the strategy of leaving the debit card at home is smart. I didn’t start using that strategy until after graduation, but it really helped us control spending.

Stephanie,

Definitely still apply for financial aid by filling out a FAFSA, even though you are on a full scholarship. Depending on your school’s scholarship policy, if you qualify for grants you may be able to use them toward any supply expenses such as books. Since your parents are supportive about keeping you debt free, ask them if they would be willing to help you set up a Roth IRA in your name, and see if they will fund it during your college years. (Cut them a deal. Tell them that if they will put $50 a month in it you will commit to something for them. Chores, babysitting, anything). Instead of holiday and birthday gifts, ask for the money to be contributed to your savings. And use your tax refund at the end of the year to pay off that credit card. Don’t open any more. It was the worst thing I got caught up in with college. I am 28 still paying off a balance at 26% interest rate that I was stupid enough to charge up in college because I justified it as living expenses. Be frugal, rely on your parents and family, and look forward to a good life with no student loan payments after school.

I graduated from college in 1989, and I know costs have gone up way more than the cost of inflation so I’m not sure if I were doing it today if I’d still be able to graduate essentially debt free as I did back then.

1. I attended a state university. I was an out-of-state student, but back in those days, the costs of going in-state to the University of Illinois was actually slightly MORE expensive than going out-of-state to the University of Iowa once you factored in things like housing, food, books, etc. If the reverse had been true, I would have gone to an in-state school even though the journalism program was better at Iowa than Illinois.

2. This doesn’t help you now, but I worked all through high school, starting when I was 14. By senior year, I was working 40 hours per week, putting half my before-tax income aside for college expenses while still keeping up my 4.0 GPA. That saving for college thing is something my mother enforced from my infancy: all financial gifts were put into college savings and not spent on toys or clothes or “fun” stuff. (I do that now for my 3-year-old daughter.) When I started babysitting at age 11 and earned $5 on a good night, my mom made me put $3 in the bank for college. (She insisted on rounding up.) When I got income tax refunds, that money went into the bank from college. (Despite the fact that I argued strenuously that I had paid those taxes out of “my” half of my gross income.

3. When I started college, my parents wanted me to focus on school and not work during the academic year. That lasted for a single semester, and before leaving for winter break, I had a part-time job lined up for the next semester. It was only 10-15 hours per week, but it paid for a surprising amount of things and I didn’t feel like I was draining my savings as badly. Mostly, it covered my expenses to participate in a sorority.

4. The next few years, I added more jobs. The first was working in the dorms, where I rotated between putting mail into mailboxes, working the front desk (where I could study!) and working in an in-dorm store that sold food and other necessities like laundry detergent and school supplies. (I also could study on that job during slow times.) My second job was teaching Hebrew and Sunday school at the local synagogue. It was offered to me because the rabbi knew me well because I attended services regularly. Pay was great — $15 per hour, two hour classes two or three times a week. Of course, I also had to put in prep time, which ate into my hourly wage, but minimum wage was like $3.50 an hour then so that was great pay. Junior year, I added a job as an editorial assistant at the local Gannett newspaper in town. As a journalism major, it was the best job I could get for my future resume even though it required cutting back my Hebrew school teaching to one day a week and paid less. But it was essentially an internship and it is challenging to get paid internships so I was pleased. (And when I graduated from college, it meant a LOT more that I worked for a “real” newspaper than my college paper.)

5. I lived in the dorms or the sorority house for my entire four years of college. It was a lot cheaper than having to furnish an apartment and buy my own food, particularly since I had few cooking skills and would have relied primarily prepared food, which is expensive to buy.

6. I maintained a fairly good GPA (3.45 at graduation) but didn’t worry about the extra studying I would have needed for a 4.0, which I could have gotten, I believe, if I hadn’t worked so much.

7. I had a single credit card but considered it for true emergencies only. Which meant that I actually never used it during the academic year. And during the summers, when I was working as many hours as I could to save money for the school year, I used it only to buy things that I already had the money to pay cash for. I’ve never had any credit card debt, something I’m very proud of. But honestly, I don’t know if I could have gotten through college NOW like that.

8. When I did eat out, I ate very cheap. I knew all the places I could get a semi nutritious meal for $3 or less. (I assume these days it would be more like $5 or less, maybe even $7.)My favorite was a baked potato place at the mall where I’d get a plain potato with margarine and a pop for $1.50. When I was broke and the monthly allowance I allotted for myself didn’t stretch to the end of the month, I ate things like popcorn for the Sunday night meal that the dorms didn’t provide.

9. Craigslist didn’t exist in those days, but I would totally have used it if it did. My clothes (except underwear and socks) all came from thrift stores, with occasional extra special buys from regular stores with way past the end-of-season sales when things were knocked down 80 to 90 percent. Sometimes that was actually cheaper than the thrift stores.

10. I did not buy a car until I graduated from college and had a job lined up. During my two years living in a sorority house, I bought a city bus pass during the winter months but walked otherwise the 1.5 or so miles to campus. The dorms, of course, were on campus. I put up notices when I needed rides either home to Chicago or to visit my boyfriend at his school two hours away and paid my share of the gas for a ride. I’d also offer friends gas money for an occasional trip to a real grocery store instead of the convenience stores that were within walking distance. It’s a lot cheaper to buy produce and snacks and such at the big grocery stores than the little ones close to campus that catered to students and charged twice as much or more.

11. Cell phones really weren’t an option in those dark ages, but I’d probably do what I currently do and have a pay-as-you-go cell phone that I keep on only when I’m either using the phone or expecting a call from a specific person. I tell people to leave me voicemail at home and not call my cell unless I’m expecting them to.

When I graduated, I had $4000 in debt only because I opted to pay $10,000 for a single semester in London through Boston University, which was more than I paid for an entire year at Iowa in those days. I almost didn’t go because I didn’t want that debt, but I’m so glad I did because it was the most amazing experience. I can’t believe it’s 20 years since I’ve been there and I’ve never made it back. But I still have friends there and wonderful memories.

Anyway, I’d encourage students to work as much as they can handle while still maintaining at least a 3.0 GPA. Unless you have hopes of medical or law school immediately after graduation, no one is ever really going to care that you killed yourself for a 4.0. And even if you can’t stay debt-free, or put money in savings, at least you can minimize how much debt you have. And as at least one person pointed out, make sure you major in something that you can earn a living with if you’re going to run up debt. I double majored in religion, because I really enjoyed the classes and got As in them, which helped my GPA, but journalism was my focus for a career.

I keep telling my babysitter, who starts college in the fall, that she should definitely take lots of art classes because she’s so talented, but to make sure she gets a degree that can help her support herself while she continues to make art in the future.

Oh, and when you look for those summer jobs, try to find something that will give you professional experience as well as a decent income. Even though I was sure I’d never want to do PR, I did a summer intern in PR both because it paid well and I knew it would look good on a resume. My next-door-neighbor’s kid graduated from college this month and is having trouble finding a job. Personally, I think part of the problem is he spent all his summers working at a grocery store rather than lining up anything professional.

Oh, and one other idea is to look into your college’s work co-op program. I didn’t do it, but I had friends who would attend school for a semester and then work full-time in their chosen field (usually engineering) for a semester, earning great money. Not only does it support your college expenses, but it gives you an idea if it’s work that you’d actually LIKE to do after you graduate. There’s nothing worse than getting a degree and then finding out that although the classes were fascinating, the job actually sucks. I know people that has happened to, and it usually means going back to school for yet another degree which costs MORE money.

Apologies for the length of this. Obviously I feel passionate about trying to get through college with little to no debt.

@Jim: lies, d*** lies . . . You’re right — I probably should have said “over 22″, but I’m pretty sure it doesn’t invalidate my point.

Back to my original point — there is more than one way to get a degree, and about 38.7% of students currently in college are over 25.

man. i left home at 17, even if going back was a viable option you couldn’t have paid me to live there. too risky.

i busted my tail and graduated college in under 3 years. overload classes every semester and 2-3 jobs to make ends meet. sure, a little money went into savings, but i would have rather had the hours back for the reason below.

looking back, i was in such a hurry to get through before i paid too much in tuition, that i didn’t quite realize the value of my tuition dollars was in the experiences i gained. i could have done a lot more but was too busy juggling jobs and too many classes.

i wouldn’t trade my experiences with friends, despite some costs, for anything. those are some of the happiest memories i have.

rely on the resources you have available to you- if your family is supportive, let them help you out. if you’re working, use whatever benefits to your advantage. we got a lot of free entertainment as a benefit of one of my jobs.

and like others are saying, your main job now is to be the best student you can be. your performance now will have an effect on your ability to make and save money later.

i figure my general lack of saving for the past 4 years can be made up for, once i get the job that’s 3x my graduate stipend.

Yes, I really do think college students can save money. I had saved over $10,000 by the time I graduated just 3 weeks ago. It all depends on your situation. Do you work or not? Do your parents pay for stuff? How much is your tution and fees? How much do you spend on beer and alcohol?

It can be done but it takes a lot of discipline.

Stephanie,

I’m a college student in the same position and I actually started a blog targeted towards other college students, but even other folks may find advice there as well. My blog is savingforsuccess.blogspot.com, it’s just barely off the ground, but take a look!

-Cal, SFS

From one college-student-Stephanie to another:

I find your commitment to savings really noble (and awesome!). You’re in a unique situation, getting a free ride, and I think because of that, you’re right to think about how you can start saving for life after college.

The biggest thing that helped me in spending less (and starting to turn my financial life around in general) was just to track every penny I spent. I used an Excel spreadsheet – but whatever works for you, as long as you stick with it. That way, you can KNOW how much “cutting out Starbucks” or “eating out only once a week” can save you, because you can look at your own spending trends. The information is useful in other ways, too.

Look for little things on the internet to pick up spare change. Someone in the comments mentioned online surveys – those are great, actually. I did a bunch of them last year, and it’s a neat way to pick up extra cash (which you can put right into savings). Whatever it is, you just need a find a little stream of income. Good with Photoshop? Design shirts and sell them on Cafepress. Good at writing? (You seem to be.) Consider starting a blog on something that you’re passionate about.

For now, though, worry about your credit card. Unless you’re still riding a 0% intro APR, the interest rate on that will probably offset any savings you manage.

Good luck to you – you really are doing well already, though!

I can definitely relate to this post…. about 12 years ago. Here’s my thoughts…

1. You know all the loose change you collect in your pockets? Save it in a piggy bank, wrap it, and deposit it in your savings account. You’ll never know the difference.

2. Like others have said, focus on breaking even by the time you’re out of college. Just doing that will give you a HUGE head start in life.

3. This may sound strange, but donate a small percentage of your income to charity. I’ve found that when I give to others, it seems to find a way to come back to me — not always financially, but sometimes — and it will definitely help you sleep better at night knowing you’re doing something to make the world a better place.

When I turned 18, I asked my Dad if I can start filing my own taxes (meaning, he can’t claim me as a dependent anymore). He said sure and this way, I was able to file for Financial Aid (by filing my own taxes, my Financial Aid application only took into account my income, which was pretty low). I got a government grant (based on need and grades) that paid for all of my education (5 years) and give a bit extra for books. I bought books at half.com (used) whenever I can – this took a lot of planning because I need to stay on top of when the professors give out the book list at the beginning of each quarter and look them up on the web and purchase them. This has an advantage because usually I receive the books early and will have them ready. Buying books at half.com saved me hundreds of dollars and stretched the money I receive from the grant.

I also worked at this time and that money paid for rent. I didn’t get my own room, I shared with my best friends who are twins. This way, even when living in an expensive area (Orange County, CA), I pay a pretty good rate.

I also insist on cooking lots of food on the weekends and eat the food throughout the week. I’d bring lunch to school and work too. I didn’t spend any money on things that don’t benefit my education – no drinking, no parties, no extras. I seek out cheap grocery stores (ethnic markets) and rarely go out. Thankfully my roomies are pretty frugal so we’d all look for cheap places to eat and such.

Occasionally, I get help from my parents but my ultimate goal was to be independent (they put a lot of pressure on me to study something I didn’t want to do… I went from a Bio major to History, but ended up with a Bio minor anyway). By being more independent, I think they respect me more and don’t push me around as much.

At the end of my schooling, we moved to a 4 bedroom house and by that time, I was able to pay for my own room, and saved $5000 which went to pay for part of my wedding expenses.

JD –

I find it absolutely appalling that some would not merely suggest, but *encourage* living on federal loans.

What the hell are they thinking?

I’m working on my senior year of a double-major bachelor’s degree.

When I finish school, I’m going to have over $50K in debt waiting for me.

My #1 regret is that I signed my name on the dotted line to get on the dole for financial aid.

In that one action, I’ve just made myself a SLAVE to Uncle Sam for a period of *years*.

Admittedly, my values are different than some of the commenters, and I make no apologies for this…

but I don’t think kids should be going to college to party. You’re there to learn a trade, to get an education.

You’re preparing for a future vocation.

I have a friend here in the area whose 16-year old son was homeschooled.

He has 51 college credits already, in a period of about 6 months. All doing CLEP (www.collegeboard.com/clep) tests.

He is going to have his degree before me!!

He’s paying roughly $70 per test, which give him 3 to 6 credits if you pass.

The best part? ZERO DEBT.

He will have to go to another school when he’s done with his lower division courses, but it will be paid out of pocket.

He is driven, he has goals, and he has parents that are smart enough to make sure he doesn’t incur any debt. They are making him work, and pay his own way through, and get scholarships where he can.

If only I’d had the sense and forethought to do just that, when I started.

I can’t even begin to say how discouraging it is, knowing I’m going to have mountains of debt when I’m done.

I wish I’d worked my way through.

I encourage others to consider doing the same, and forgoing getting into debt with Uncle Sam.

Sorry….

This just hit a nerve.

Aaron Kulbe

I was very lucky I was able to graduate with money in the bank, I paid for about 80% of everything while going to school. I did this by being smart with my money and having a great job, that was very flexible and paid quite well and that i could work full time at during the summer.

I would not worry about a little debt just make sure your smart with your money i knew people who used thier students loans to buy a car or a new set of clubs.

I say as long as you can keep away from credit card debt and keep lower interest student loans and be smart with your money you should be able to graduate with a small but manageable debt.

You don’t want to be working all the time, school is about having some fun too.

I’m a parent whose oldest is going to be going to college in two years. Here’s my expectations for him:

1. Live frugally. Don’t get loans or credit cards. I’d much rather he graduate with as little debt as possible.

2. I’m going to pay for much of his college. In return, he gets good grades and doesn’t screw around.

3. He goes out for every grant or scholarship for which he’s eligible. Anything over, I’ll pay for.

4. Part-time jobs for beer money is fine, unless it impacts grades or graduation schedule. If it does, we’ll talk.

The rest is negotiable. If he wants to live with his parents, he’s welcome to. If he wants to live on-campus, or rent off-campus that’s fine.

Ultimately, I don’t want him graduating with crushing debt that will take 10 years to pay off. I’m at the point in my life where my job pays for more than my expenses , so I’m happy to give him a good start.

I expect that most parents feel the same way, although their own financial circumstances may limit how much they can do.

I know of a strategy that really works, you see when you have money in bulk its hard to stop yourself from spending it all at once so what you have to do is fool yourself, put your money in compartments like envelopes divided into savings, spending cash, money for investing and so on. then you can move that money into different bank accounts. the money you saved in a savings account,your investment money in a money market account your spending cash in a checking account, and never use the money in a certain account for a porpose it was not intended.

http://inspiredmindset.blogspot.com

Try doing something off the board. I found this website that has some ideas for a little extra cash http://www.freewebs.com/moneyincollege

Let’s see to graduate without loans, it possible. Some fields of study have a lot of money for scholarships that no one claims.

Get a part time job, take the bus, buy used books, look at other means of housing besides on campus. Yea you don’t have to have a car and you can walk everywhere but surprisingly there were several fraternities and apartments cheaper then then living on campus at my school. I joined a dry (no drinking in the chapter house, keeps it a lot cleaner) fraternity, got good grades and received a monthly discount of $50 off my rent. I even lucked out at the end of stay and got to be an adviser netting me even more of a discount. Check out other living options besides the dorms.

Get a job that gives you free meals or something else, I worked in a sorority for a year. I got two meals a day 5 days a week and one meal on sundays for 2 hrs of work a day and I got some extra money.

Donate blood

At one time I worked 3 different jobs and carried a full load of credits. You just have to have decent time management skills.