In my post-college years, I've reflected on my four years at school as my formative years because it forced me to learn how to live on a tight budget.
Ok, tight budget might be selling it short. I was straight-up poor. My low point was doing an entire load of laundry in the bathroom sink of my sophomore year dorm room. My roommate wasn't thrilled when our room became my personal clothesline to dry them, but I must say, they came out (mostly) clean.
My four year struggle taught me a lot about how to save money, and through the process of trial and error, it also taught me how NOT to save money. Plenty of my attempts toward frugality ended up costing me money, making my life miserable, or some awful combination of both. And, as it turned out, many of my failures arose from money saving strategies that came recommended to me by others or were passed-down clichés from previous generations of under-financed pursuers of higher education.
Here are eight money saving strategies that you're likely to encounter in college. When you do, learn from my mistakes and steer clear.
This is unequivocally the most worn out cliché of them all. Approximately 50 million college students since the beginning of time have claimed to have survived on a strict diet of inexpensive, packaged ramen, and the fact is it's simply not a viable option. The only thing that makes packaged ramen attractive is the price point - often under 50 cents per package when buying in bulk. Take a look at the nutrition table from a package of ramen, and you'll notice a total lack of vitamins and enough sodium to make Salt Lake City blush.
Now, I'm not decrying eating ramen altogether. If you enjoy the taste and don't mind the lack of nutrition, it makes for a decent occasional meal. Vowing to abandon other foods altogether and survive strictly on ramen, though, is a terrible idea. Want to have a sustainable diet that's at least somewhat healthy? Good news - bananas, cucumbers, apples, and whole grain bread are all cheaper than ramen on a per-pound basis. Web MD has a good list of nutritious food under $2, too.
Scholarships are a great way to help finance your college experience because they're essentially free money. For those who don't qualify for full ride-type scholarships for academics or athletics, applying for smaller scholarships from academic organizations or companies is a great idea.
What's NOT a great idea is deciding to treat scholarships like a full time job and spending 40 hours a week sending out application essays. By doing this, you dilute the quality of your applications and spend time that would be much better spent working a part-time job and saving money. If you send the same essay to 100 scholarships on Fastweb, sure, you might win one, but the 99 others are bad fits for your essay that should have never been applied for in the first place. Instead of applying for every scholarship known to man, take a targeted approach and apply for a dozen scholarships you might actually win, and spend the rest of your time working and saving.
Some students figure they'll start a small side business of cutting hair or doing makeup to earn money. It might sound like a profitable plan, but it isn't. Charging $10 or $15 for cosmetology services isn't enough to recoup the cost of your time and supplies, and if you charge more than that, students will choose a licensed salon instead. Your time is better spent doing other money-making activities, or if you're qualified, working part-time at a salon.
Another money misstep is to go into business driving car-less friends to the grocery store, class, or wherever they need to go for a fee. Unless you really sit down and crunch the numbers, it's difficult to account for the multitude of factors that go into a profitable fare. There's a lot to consider: how much should be charged for your time, gas, the cost of your insurance, the risk of an accident to your car, depreciation of value, etc.
If you do have a car and would like to use it to earn money, you're better off joining on as a driver with an established ridesharing program like Uber, Lyft, or RelayRides (if your city supports such programs). Delivery driving for a restaurant is also a viable option.
This is a common theme among students - it's some variation of "I'll save money by not going out to eat or drink at all this semester." That's an admirable plan, but, frankly, doesn't it sound painfully boring? Sure, staying in every night will save you money, but it'll come at the expense of fun. Who wants to look back on college and remember all those awesome times you sat in your room and watched 6 hours of reality TV while your friends were out having fun?
Instead of cutting back on going out entirely, use Restaurant.com to get gift certificates for restaurants at well under face value. There you'll find $25 gift certificates for as little as $10, and most of Restaurant.com's offers are for local restaurants, so you aren't chained to eating at chains. Another tip: check out local bar specials and pick and choose where you go for Friday night (or Monday afternoon) drinks. University newspapers are often a good resource for this.
Thrifting for clothes and furniture is a good way to save money and score a cool item or two. Is it a feasible way to build out your entire wardrobe and furnish your entire dorm or apartment? Probably not, especially if you're not into secondhand underwear.
A common misconception among students is that credit cards will only worsen their financial situation and lead to a future of debt. If abused, this is true. However, there are ways to use credit cards to your advantage and put a little money back in your pocket.
Rule number one is to find a credit card with a rewards program. We have an entire section of our website dedicated to rewards credit cards, so if you need a place to start, that's a good jumping off point.
Cover image by m00by on Flickr.