College is one of the most expensive investments you can make, and it’s not for everyone, but if you do choose to go the route of a two- or four-year university, be prepared to make some sacrifices along the way, unless you’re lucky enough to have family who can help with expenses (and even then it’s a good idea not to be too loose with your spending). Here are our top money-saving tips to consider before, during and after college.
Begin paying interest while still in school.
Most loans give you a grace period before you start making payments, but if you are able to start paying the interest fees while you’re still attending school you can cut down the overall size of the loan significantly. Interest begins to accrue to moment you take out a loan and seemingly small amounts of interest not only add up in the end, but they also increase the overall size, making the interest later in the life of the loan more formidable than the interest that accrues in the early stages.
Avoid borrowing more than you need.
Generally student loans offer a set amount you can borrow each semester, but that doesn’t mean you have to accept the full amount. It is really important to borrow only what you know you absolutely need so you aren’t over-borrowing. Taking out a loan can feel like “free” money at the time, but paying interest on money you didn’t really need in the first place just doesn’t make sense. Be smart about your money and don’t get stuck on the idea of “extra cash.”
Get a part-time job.
Although this isn’t ideal for every major or course load, getting a part-time job has many benefits. There are lots of on-campus jobs available and other jobs available within walking distance of campus, which can save you fuel and transportation fees. Paid internships and jobs working as an assistant in your future field also offer new skills, references and a foot-in-the-door. Especially if you later choose to be a research assistant in your department.
Pay off the most expensive loan first.
Ideally, you should always pay back the loan with the highest interest rate first, but sometimes if you have a smaller total loan amount that you know you can pay off quickly, it’s more motivational to pay that loan off first before tackling larger debts. The best advice we have to offer in this instance is to weigh your options carefully and consider consulting a trusted relative or friend who has managed to pay off their debts quickly. There are also many trusted professionals in the financial sector including bloggers, podcasters and other excellent resources. The bottom line is not to just accept advice from anyone you know. Make sure they have experience with finance, or with paying off personal debts before asking for advice.
Be prepared to sacrifice a little.
Your first full-time job after college might be the best pay rate you’ve experienced. And so, it’s really easy to believe that you can buy all the extras you’ve been doing without for four years (or longer). The cold hard truth is, yes, you can treat yourself a little once you begin to make money instead of taking on more debt, but in order to successfully pay off existing loans you need to spend less than you owe. And don’t forget to funnel a small amount away each month to put into an emergency fund. It’s important to have some cash available, in case of an emergency, so you aren’t stuck relying on a friend, family member or taking on debt forcibly at whatever the current rate is. The key to debt management is to be in control of whether or not you’re going to accrue more debt.
Try to pay more than the minimum.
Try to pay a little more of the minimum if possible. Paying just $20 more each payment can really impact the amount of time you’ll have to pay. Now, before you do that, go back up and read the last tip. Is it better to spend $100 on that gadget you’ve had your eye on? Or, put that $20 toward the life of your loan for the next five months. You can always add that gadget to your Christmas list.
Live at home.
Now, more than ever, students are staying home. They’re attending community colleges, technical schools and attending courses online. One of the best ways to save money during college is to spend the big money on the education itself, rather than the associated costs like room and board. Granted, it means giving up the typical “college experience,” but an education sets you up for the future and for some that’s more important than experiencing the atmosphere of a four-year university.
In addition to teaching you about a future career, college is about preparing you to find a way to support yourself and potentially a family someday. And it is a time for young adults to learn important decision-making skills, which extend to making wise choices about money. If you’re in the thick of it and looking for an easy way to save money while paying off debts and attending school, consider opening a checking account at Central National Bank along with It Makes ¢ents!, our savings tool that allows you to save money with each swipe of your debit card. When putting away an extra $20 a month just isn’t possible, it’s sometimes easier to put it away $0.20 at a time.