It’s no secret that college is expensive and with every year, the cost of school continues to increase. With so many things pay for (tuition, room, books, food) your bill can easily run up. There’s no sign of these expenses slowing down, so if you don’t keep up, you can end up with a large amount of student loan debt. However, there are many ways to reduce your expenses and save money that’ll not only help you pay the bills, but gain valuable life experience and make you money! Here are a few tips you should follow while in school:
1. Get a Part-Time Job
a. Getting a job while in college, undergrad or graduate, is one of the best life choices you can make. Although it can be difficult to work while in school, you’ll gain valuable life skills and lessons. Over half the college population has some sort of job, so you won’t be alone! You can also make connections and are able to gain valuable work experience, especially if you can land a paid internship. It’s ok to sacrifice a few nights a week of partying for working instead.
b. On top of all that, you’ll be able to start investing your money if you can save enough. By starting at a young age, you can potentially end up with a lot more money than most of your college friends. I have several clients who go school and save money every month just by having a part-time job.
2. Buying Books - New/Used/Rent
a. All of the above are great options. Now, obviously buying used books are going to be cheaper than brand new books. Even though you can always trade in or re-sell books, buying used books is definitely the cheaper option. Some schools even allow you to rent books and return them at the end of the semester.
b. You can also look for friends that have already taken your classes and see if you can buy those books at a good price. Vice-versa, there might be books you have that your friends need as well, so trading books is another option.
3. To Meal-Plan or Not to Meal-Plan?
a. Deciding whether or not to have a meal plan is a very important decision, but really depends on the person. Learning to cook and buying your ingredients is a wonderful way to save money that a lot of people don’t necessarily take advantage of. Although having a meal plan definitely has its positives, it can get pricey at some schools. A typical semester long meal plan will on average cost about $1,600 and can get to over $3,000.
b. When deciding between the two options, it comes down to the amount of food you typically eat, the type of food you eat, the quality of food from the market you go to, and how often you eat out versus cooking. Many college kids like to load up on snacks, which is more expensive than buying fresh fruits and food to eat. And going out to dinner often can add up as well. You can easily spend over $200 a week on groceries and restaurants, so you need to be strict with your budget. Try to go grocery shopping only once every week or two.
4. Clothes Swapping With Friends:
If you’re really struggling to cut back, but also want to freshen up your look, try a clothing swap with your friends. You can host a “Clothing Swap Party” with your friends where everyone brings clothes that they don’t want or need, and people are able to “swap” clothes with each other. If you’re not comfortable wearing other people’s clothes, this may not be the best option, but it does give you a way to save a little extra money. It’s a nice way to cut back and not have to consistently buy new clothes.
There are many ways to make college more affordable. Nonetheless, the very best thing to do is begin saving and investing as early as possible. As a financial advisor, I specialize in helping individuals set up college savings, specifically 529 plans. These accounts allow you to invest money in the stock market, and all of proceeds are tax-free when used for college. By simply saving $100/month for 10 years, you could potentially end up with over $17,000 that can be used for college. I highly recommend all parents set one of these up for each kid they have. If you’re looking to set up a college savings plan for your child or friend, please give me a call.
By Malcolm Jones
Investment Advisor Representative
Securities offered through LPL Financial, Member FINRA/SIPC.
Investment advice offered through Gerber Kawasaki Inc, a registered investment advisor and separate entity from LPL Financial..
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
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