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Bedding, check! New school clothes, check! Books—yikes, but check!
As summer comes to a close, college students all over the country have ramped up their preparations for the upcoming school year. Back-to-school sales are abundant. The wise and frugal will have taken advantage of them to save a few hundred dollars on items that usually don’t last past a traditional student’s mid-20’s. If they’re smart, they’ll make their purchases with a cash back credit or debit card. (See The Best Student Credit Cards of 2019 and 7 Debit Cards That Pay Cash Back Rewards.)
Beyond the sales and the rewards, there are other smart ways for college students to save, without compromising their college experience. Here are 11 ways for college students (and their strapped parents) to save big.
1. Choose a Cheaper Meal Plan
Families can’t do much about those unlimited meal plans many colleges require freshmen to take. Even if you’re a light eater, these plans can really run up the cost of college. But generally, by sophomore year, you have more flexibility---unless you are a student at Princeton, which requires sophomores to get an unlimited $7,060 meal plan).
To give you a sense of how expensive college meal plans are, according to the Bureau of Labor Statistics, married couples spent an average of $8,717 on food in 2017, while single individuals spent an average of $5,387. (Those numbers cover all ages and income levels and food costs both at home and out.) Now, consider this: on top of the meal plan, a typical student may want to eat off campus, at least on the weekends.
Still, most seniors, juniors and sophomores (and even some freshmen) have the option of taking a more limited meal plan---for example, one that covers all three meals only on weekdays or a commuter plan that supports only eating on campus around the time of one’s classes. It depends on the university’s meal plan offerings. Princeton, for example, has three meal plan options (for upperclassmen) while a state university such as Rutgers has five options for residential students.
A meal plan that covers a lot of days in the school year makes the most sense when the student has no cooking skills or will not have the time for food prep because they have a demanding class schedule. This statement comes from personal experience; as a residential student, at no point did I cook a meal and the thought never crossed my mind to do so. I was, however, a student at Rutgers-New Brunswick and paying way less than a Princetonian.
So, a dining plan made sense for me. However, a student with the inclination, facilities and schedule to consistently cook or one who lives close enough to home to load up on leftovers from Mom or Dad (depending on who cooks) should be able to reduce their meal plan.
When choosing your meal plan, consider where the college student will live. A student living off campus may have more opportunities to shop affordably for themselves. However, a student who lives in a dorm with limited kitchen access may have to rely on a meal plan.
2. Spend Less on Dining Out
While committing to a reduced meal plan, it makes sense to reduce dining out, too, or at least to dine frugally. In truth, there’s really nothing romantic about the “starving student” who is young and fabulously broke. Instead, take college as an opportunity to get good at budgeting for your social life. In fact, it may be easier to develop this skill in college, when lots of your peers are also strapped for cash, than when you’ve graduated and some of your friends are earning more, and some less. (See how to handle having less or more money than your friends.)
Adults under the age of 25 spend an average of $2,362 a year on dining out, according to the BLS. That comes to an average of about $45 a week. But remember, that number includes young adults who are working, as well as college students, and those young adults don’t have meal plans. If you’re spending more than than $45 a week eating out---or more than your personal budget allows, which might be less than that--it’s time to get a handle on your restaurant habit.
3. Stop Paying For Friends’ Splurges
Even if you’re keeping your restaurant tab down---skipping the drinks and dessert, maybe ordering an appetizer instead of an entree--you can still go over your budget if you go out with a group that simply splits the bill. If you don’t want to pay for friends’ splurges, then tell them and ask the waiter for separate bills before ordering.
From personal experience, it’s better to get it all out before you order. That way, friends can decide if their restaurant food spree actually fits within their own budgets. (See: The Definitive Guide to Splitting the Dinner Bill)
You and your friends like a drink with dinner? Assuming you’re all of legal drinking age, suggest a BYOB (bring your own booze) restaurant. A beverage purchased from the local wine and spirits store will always be cheaper than one purchased at a restaurant. It’s not a BYOB? There’s always pregaming. (Google it, parents.)
4. Cook (and Snack) at Home
Unlike my former self, there are plenty of college students who have a knack for cooking. As long as you’re not buying wasabi root or the more expensive truffle mushrooms, your grocery bill should be college-student-budget friendly. It should also focus on your health; it’s often easier to cook a meal that incorporates all your dietary needs than to choose a dish that does so from a restaurant menu.
Sure, this may be rough with the temptation of takeout apps like Postmates or DoorDash. Food delivery apps are like credit cards in that they can tempt you to spend more than you would if you had to pay cash or go out to pick up food yourself. Between delivery fees and tipping, a $10 meal can jump to $20 in a simple tap.
Meal-kit delivery services can be just as bad on your finances, sometimes costing less than dining out and food delivery but more than buying your own groceries. Services like Blue Apron charge upwards of $7 per serving or over $40 for a few recipes to get you through the week. Not bad, but the service requires you to skip a meal instead of pausing its services if you ever need a break from it. Want to cancel? There’s no button to click for that, you have to reach out to support and have them send you a list of instructions on how to make that happen. Their form of customer retention, I guess.
Snackers are at a loss with a meal delivery service because those set prices don’t include snacks. At least with a meal plan, you can grab some fruit or other items for later. Plus, some plans incorporate snacks at college convenience stores and pizzerias. With meal-kit delivery services you’ll still be at the grocery store or cornerstore getting something to hold you over between meals. You could subscribe to a snack-kit, but our goal is to save money, not create more expenses.
Here, a little planning can help. Think about what you normally like to snack on. Check the transaction history in your delivery app for meals you end up craving at odd hours. Then, make a list of the snacks or ingredients needed to make those dishes. It’s wise to pick things that are quick to make for the beginning of the semester and then try slightly harder ones as you become comfortable with your class schedule, grocery budget and where to cook and store your items.
Student Loan Related
5. Pay Interest on Your Student Loans While You’re in School
Paying the interest on your loans while you’re in school is one way to keep the balance on student loans from growing into a monster by the time you graduate. The U.S. Department of Education makes a few different types of student loans. While you’re an undergraduate, Uncle Sam covers the interest charges on subsidized loans, but not on unsubsidized loans. So you don’t need to worry about the interest accruing on subsidized loans, but you do with the unsubsidized ones. You can learn more about Federal student loans here.
Any private student loans a student takes out will operate much like unsubsidized federal student loans and accrue interest. Some private loan issuers offer repayment deferment until the student graduates and others demand repayment as soon as loan funds have been distributed. Say a freshman takes out a loan for $5,000 at an interest rate of 4.53% (the federal undergraduate student loan rate for the 2019-2020 school year.) This student would have accrued $906 in interest by the time she graduates, assuming she does so in four years. This calculation doesn’t include any fees and only involved the formula below.
Interest after four years = (Interest Rate/12 months) x $5,000) x 4 years
The interest came in just shy of $20 a month. If you have very few unsubsidized loans then that payment is manageable with a part-time job. True, it may become an overwhelming amount as you have to take on more loans with each year of school. In that case, you can decide to pay the interest on the loan that has the highest rate of interest. Another option would be to choose your smallest loan and work to pay the interest and a bit extra to try to pay it off within two to four years.
6. Grab A Federal Work-Study Grant
If you ever get this in your aid package, take it! It’s a part-time job that could be on-campus or off-campus and could even be related to your major. The earnings from this can go towards your interest on loans, books or school supplies.
7. Buy Basic School Supplies Off-Campus
Those notebooks and pens with your school’s logo and tagline are cute but usually unnecessarily expensive. What’s $20 for a notebook or $3 for one pen? Swallow your pride. Go to a supermarket, an office supply store, a superstore or a dollar story and load up with the grade schoolers and high schoolers on all your note taking, highlighting, erasing, hole-punching, stapling and related needs.
Walmart sells bundles of basic school supplies for around $30. A bundle includes notebooks, folders, pens, pencils and a few other knick knacks. You can find similar bundles at Amazon, Office Depot or at Target. Even your local grocery store or pharmacy has deals at the start of the school year.
8. Strategize to Save on Books
One of my most memorable mistakes my freshman year of college was purchasing my books for class at the school’s bookstore. The cost was higher than I could ever have anticipated. But by the end of my four years I had learned the value of shopping around at brick-and-mortars, online and even just using the school library.
Here’s the library story: One semester I lucked out and was able to check out a book I needed for my class. Yes, I had to return it by a certain date, but I photo copied the pages I needed to read. I wasn’t the only student who had that idea-- I always saw other students frantically copying away at the library. Is this legal? Under the Copyright Act, you certainly can’t copy a whole book and sell the copies. But you should be okay if you’re just copying a chapter or excerpt for the purposes of private study.
There are other options. If you and a roommate or good friend are taking the same class (whether together or at separate times) you can offer to use one book between the two of you. It’s not foolproof, though. During finals, you might find that you and your friend are pressed for time. An even better strategy: buy the text book used from a friend who took the class last year or last semester.
If you don’t have a friend with the latest edition for sale, look beyond the college bookstore to see if you can find what you need cheaper, used, or even for rent. Usually, the easiest way to do this is online. Check out sites like Barnes and Noble, Amazon, Chegg and SlugBooks. The last two allow you to rent the books (some college book stores offer rentals as well).
9. Use Student Discounts
This should not be news. Colleges and local establishments often tout student discounts--mine did. Outside of the college town scene, many businesses offer discounts to college students, as well.
For example, FedEx gives up to 30% off on certain services as long as you have your student ID card. Sam’s Club offers student-friendly membership. Brands such as Madewell, Banana Republic and Toms have discounts for college students, too. Some student discounts may not be as good as other discounts you may get through your bank and community affiliations. So check those out, too.
10. Finish School (Quickly)
Student loan holders should definitely aim to graduate before leaving school. Loans that were deferred while a student was in school usually go into automatic repayment about six months from the date that the student stops attending school, regardless of whether the student earned a degree or not. It’s better to have the degree before you have to repay your loans. The earnings for a college grad are higher, giving you a better ability to handle your loan payments.
But don’t just finish school-- finish within a reasonable period of time for your degree program. Taking a fifth, sixth or even seventh year as an undergrad adds to the already high costs associated with a college degree---it’s not just that you’re paying for extra semesters, you’re also losing out on earnings those years.
In fact, if you’re still choosing what school to attend, be sure to compare the percentage of students who graduate within six years, a figure that’s available on the Department of Education’s College Scorecard site. (Also, read What’s The Return On A College Education? )
Aiming for a graduate degree? Check out accelerated and combined programs. A good college friend of mine, at the urging of her parents, managed to get into a five-year college program, also called a joint-degree program, that shortened her undergrad to three years and kept her grad school at the standard two years. She received both degrees in five years. She took classes during the summer and winter break.
At first, I remember her griping about the experience, but as I was finishing my fourth year of undergrad and she was on to her second year of grad school with her bachelors in tow, I could see that she had come around to her parent’s idea. She was on track to enter the workforce a lot earlier than her peers.
11. Work Part-Time (Or During the Summer) in Your Field
Gaining work experience in the field you are majoring in can save you money and frustration in the long run---and give you a leg up when the time comes to job hunt. Ideally, you’ll get paid for this, particularly if it’s a summer job. But even if you’re forced to take an unpaid internship, exposure to the reality of your chosen field (as opposed to the perhaps glamorous version of it you see in movies or on television), should help you make sure you’re on the right career path, allow you to make contacts, and give you some experience to add to your resume.