Unfortunately, I went away to college my freshman year with very little financial wisdom. I thought I was bullet proof, both physically and financially. Since I had a couple pieces of plastic in my wallet I figured I had the green light to spend money on the college experience. Wow, what a rude awakening I was in for. My future included years of battling credit card debt and never being able to get ahead. I wish someone had sat me down, preferably with a cold beer, and told me these 5 frugal habits that all college freshman should live and die by. It is important to start to build a credit history but at the same time be extremely careful.
1. Credit Cards are NOT Free Money
When you get on campus you’ll start to notice various credit card companies setting up booths around campus trying to get you suckered in with new plastic. Be VERY careful. If you already have a credit card politely decline whatever freebies they may be giving away and walk away quickly. But more than that, be very careful of over-using your credit card and telling yourself you’ll worry about paying the bill later. A credit card is not free money. So many young adults go away to college and begin the life-long battle with credit card debt. It’s time to buck this trend and get into the habit of only using credit cards to buy stuff that you actually need and can reasonably pay off at the end of the month.
2. Buy Used Textbooks, or Rent
Do NOT pay ridiculous prices for brand new textbooks…ever. Instead, check out other more frugal options like used or rented textbooks. Last year Amazon.com started a textbook rental service where you can save up to 70% per semester versus buying brand new books. The icing on the cake is Amazon will ship the books for free with 2-day shipping and they’ll let you sent them back for free at the end of the semester.
Also, if you want to keep your textbooks for future reference, consider buying them used from websites like AbeBooks, Chegg.com, and Textbooks.com. Typically you can save close to 50% off the original retail price. Always worth a look before you drop some serious cash on brand new books.
3. Never to Early to Save
If you can swing a part-time job while going to school you by all means should. Not only will it alleviate some financial pressures but you may also be able to start actually saving some money every month. Open up a savings account (if you don’t already have one) and start depositing a portion of your paycheck into it each month. By doing so, you start to develop the healthy habit of saving money and you make it a bit more difficult to access the money in moments of weakness.
4. Have a Spending Plan
While it is never to early to start saving, it is also never to early to start having a spending plan each month. First, figure out what your monthly fixed costs are. Consider things like phone bill, gas, food, rent, and utilities. Once you have determined this amount, subtract it from your monthly income or allowance. This amount gives you a solid estimate to what your discretionary spending is each month. By setting up a spending plan (or budget) you are not blindly spending money with no clear concept on whether you can afford your college lifestyle.
5. Always Check for Student Discounts
Typically during the first week of college you are given a student ID card. Be sure to take full advantage of this little gem as it will not only save you money at the movies and some restaurants, but now many retailers also offer student discounts. Some of the more popular discounts include the Apple Store offering a $100 gift card with the purchase of a computer. Dell famously gives away a 4GB Xbox 360 with a qualifying PC priced at $699 or more. Amazon.com offers a free student program that gives you 6-months of free 2-day shipping. Also, Allstate auto insurance offers a 20% discount for full-time students under the age of 25.
6. Distance Learning Options
Changing the way in which you take your classes can also save you some money. Just because you are a college freshman does not mean that you have to attend classes on-campus, as there are plenty of distance learning options available. Online courses provide a much different learning environment, as you will be responsible for setting your own schedule and making sure that you complete all of your coursework. At the same time, online learning makes it much easier to work while going to school and allows you to save on transportation and relocation costs.