Financial Tips for Young (and Old!) College Students

When I started my life as a college student, I had big plans. I worked a lot and spent a lot of money. I've learned so much since those days. Now, many years later and just about to graduate, I find myself with no money saved up. If I had money in the bank, I could support myself with no problem while I find that perfect job for me. If I had money in the bank, I could take some time to travel before finding a job and getting out into the "real world". However, I did not plan well and I have very little to show for my years working through college.

If I could go back, I would have some big tips for my lighthearted college freshman self. For starters, every high schooler hears this for at least a year before they graduate: There is a lot of free money out there. Take advantage of it! I started as a freshman with a full ride scholarship. I ended up as a sophomore with a GPA that was just a tad too low and no scholarship. I can't say that if I went back I could boost my GPA to keep the scholarship, but there are so many other sources of free money out there that I didn't take advantage of. A lot of scholarships require an essay (but who really wants to take time out of campus life to write a scholarship??) -- fortunately any freshman in college has scads of essays already written from high school and required English classes. Why not take an hour to update one of them to fit the requirements of the scholarship application? If that hour of work brings in a $500 scholarship, it is worth it. Sign up for a free scholarship search engine, such as Fastweb, and apply for every single scholarship available, even if it doesn't apply to you. A lot of scholarships are never awarded because there are no applicants, and there is always a chance that you will be selected.

Along with applying for scholarships, apply for jobs that you can use to gain experience for your chosen field of study. If there are no paying jobs available, someone out there is probably looking for volunteers in the field. Whether you are paid for it now or not, it will definitely pay off in the long run. While a degree is important when applying for many jobs, experience in the field is even more important. You'll have an edge over your competition and often you will start out at a higher pay than inexperienced applicants. Getting a job early in your degree program also gives you another advantage: You may discover that you can't stand working in that field. It is better to weigh your options and change your major early in your college career, if you decide that you'll be happy doing something else with your life.

Once you're brining in money, be careful how you spend it. Now, I'm all for spending money, but looking back at my expenses through the years, I realize there are two huge categories that I could have drastically reduced spending in: Transit and Food. I've had a car all through college, and I have to tell you that I wouldn't have it any other way. However, there are a lot of ways I could have saved gas money and wear and tear on my car. If you're living off campus, if at all possible, try to carpool or take public transportation to school. Many schools have free or drastically reduced bus or train passes for students. I've started carpooling with my roommate and riding the bus in my last semester. I drive 90% less than in previous semesters, reducing the money I spend on gas (and increasing the likelihood that I can take weekends to drive places I want to go, rather than places I need to go). I also don't have to get oil changes and other preventative maintenance on the car as often, and I don't have to spend $600 for a parking permit on campus. While taking public transportation takes more time out of a day, I've found that I look forward to spending a relaxing time on the bus catching up on reading rather than fighting with traffic.

As for food, you can save a lot of money (and gain less weight) by buying food at a grocery store and cooking for yourself rather than eating out. Pack a lunch to school. If you must buy food on campus, take advantage of the student cafeteria. You'll often get healthier choices at a lower cost. Eating out with friends is a social activity, of course, but you can still save money while going out. Limit yourself to one or two meals out per week. Snack at home before you go out, and order a smaller entrée or just an appetizer at the restaurant. Better yet, cook a nice meal several times a week and invite friends to bring over appetizers or desserts and make it a social activity that everyone looks forward to.

Another big spending category for the college student, that is harder to control, is textbooks. Always buy used if possible. Check with your professor to see if you need the newest edition of the text. If you don't, there are scores of very cheap textbooks available on Half.com and Amazon. I've often gotten $100 texts for just $5 including shipping. Also look to both the school and the public libraries for required texts. Many professors put textbooks on hold for the class. While that is an option, there is also a chance you can check the book out for yourself. Make sure you keep an eye on the due dates and renew if you have to, or overdue fees may exceed the cost of simply buying the book used. Free book exchanges, such as Bookmooch, also offer another chance to find required texts. If you try all of these sources and there are still no cheap or free copies of the book you need (which is often the case when there is a new required edition of the book), get together with your classmates and share the cost of a book. Make copies of the sections you need to read. Paying for a quarter of a textbook and some copies is still better than paying full price for the book.

One last thing to remember - avoid going into credit card debt. While credit cards are not all bad, it is easy to take advantage of money you don't have. Instead of putting purchases on the card and paying them off later, save your money until you can afford the purchase and then pay it off right away. Never put more money on your credit card than you have in your checking account! Most of all, do not give in to temptation: Whether they're offering a free T-shirt or pizza or gift card or anything, that extra credit card application is not worth it! Every year credit card companies get unsuspecting college students to sign up for their cards using free stuff as bribes. And, every year, college students get themselves into thousands of dollars of debt when they could have avoided it simply by not applying for the extra credit cards.

So now, what do you do with all this money you're saving? Open a high yield savings account (there are many options online - do a little research to see which one is right for you). Add as much money as you can to your savings account every month. If you are saving for a big purchase, try to avoid taking too much money out of your savings account. Make a goal to have a minimum amount of money in your account by the end of your freshman year and try to double that amount every year you're in college. This will give you some financial padding after graduation.

While college offers a lot of financial freedom, it is very easy to get yourself into trouble by spending too much. However, it is possible to take full advantage of the opportunities that college offers while still planning for the future. Plus, the money saving habits you develop now will benefit you the rest of your life.