How Much Money Should a College Student Have for Smooth Schooling?
Hello! Today I will be telling you what college costs and how much money you probably should have as a student. College is expensive, and I’m not talking about the tuition alone. There are bills to pay besides your school fees, which I am almost certain, cost a fortune. I’m talking about your accommodation, especially if you’re not staying at home or a school hostel, books and other supplies, and transportation. I’m talking about food, assuming you eat most of your meals on campus, clothes, and travel — depending on the distance from home to school.
Therefore, you need enough money if you don’t want to be stranded in college (as I was in my first few months). If you’re reading this, congratulations; I didn’t have anyone to prepare me, nor did I see a need to prepare myself.
I am here to help you avoid making the same mistakes I did in my first months of college. Based on my personal experiences and research, here’s my take on “how much money should a college student have right now.”
How Much Money Should a College Student Have in the Bank While Schooling?
It is generally hard to determine how much a college student should have in the bank. That’s because you must consider different factors, such as how far away from home the college is. Also, you must consider what you characterize as spending money, factoring in your activities and your school’s geographical region. These factors ultimately determine how much should be in your bank account while you are in college.
Generally speaking, you should have between $8,000 and $21,000 in the bank by the end of the year. You will have to depend on more than the pocket money you receive from home. I didn’t get a job until my second year in college and saw that my parents were trying, but I needed more.
I didn’t stay in the school dorms, so bills were choking me; I had rent to pay, transport fare, and more. Either I got a job or started begging my colleagues for money — which I would never do. So, as you enter college, prepare to get a job — unless you have a rich uncle to fall back on.
Spending money is different from money in the bank, however. For spending money, a college student needs about $2,000 per year or $200 per month, depending on the factors I’ve stated.
How Much Money Should a College Student Have in Savings Despite Expenditures?
How much you save up each month as a college student depends on your situation. Do you live at home and have no expenses such as rent, transport fare, and others? Then, you should typically have more in your savings than someone who has to spend on those things. Ultimately, how much you save up per month is your choice; $10 a month is better than nothing.
If you work while going to college, there is a common financial rule 50:30:20 for how you spend your income. You spend 50% of the money on fixed expenses like rent, utilities, mortgage, and other fixed monthly expenses. Then, 30% of the money should go into flexible expenses such as fun and entertainment — groceries, eating out, and movies. Finally, your savings should take the remaining 20% of your income.
You should save most of your income if you have rich parents who can comfortably cover your housing and tuition. Otherwise, much of that income will go into supporting yourself, and you may not be able to save much. Don’t beat yourself up if you can’t save much; getting your degree is the most important thing here. The bottom line is that you should save as much as possible, but not to the detriment of your health and grades.
How Much Money Should a College Student Have in Their Emergency Fund In Case Something Comes Up?
If you’re a college student, you need something we call an “emergency fund” for, well, emergencies. I am a working college student with a lot of expenses to cover: books, food, rent, and so on. I don’t make much at work, but I make it a rule to save at least 5% of what I earn for emergencies. Also, I distribute whatever I don’t spend out of the 30% allocated for fun and entertainment into my general savings and emergency fund.
However, this only works when you don’t have debts to settle, and there’s enough to meet your other expenses. When I first started working, I had so many debts to settle; the debts were what made me start working in the first place. I borrowed so much money from my colleagues that I had to get a job to pay. In the first couple of months of work, I was settling debts; as a result, I didn’t have much saved up.
If you have debts, focus on settling those first, but also save something — no matter how little. Split the debts so that it doesn’t consume your entire income and you still have something to fend for yourself and save. Essentially, the right amount of money to have in your emergency fund is six months’ worth of expenses.
What Are Things You Are Likely to Spend On?
Items you will likely spend on in college include clothing, entertainment, and activities like a gym membership or soccer club. You’ll also spend on food, whether you eat out or at home; you’ll spend on groceries. You should also expect to spend on coffee and pizza; these are miscellaneous food expenses not included in the annual food budget. Also, you’ll spend on gas if you have your car or public transportation if you don’t.
Other expenses include cell phones, textbooks, school supplies, electronics (like your laptop), gifts, and travel allowance. In addition, there are instances you will have to pay for services like MyPaperWriter.com to help with some writing tasks You may also spend on pledge fees for sororities or fraternities, specific dietary needs, and sports fees and equipment. However, these items vary — your travel allowance, for instance, will depend on how far your school is from home. You need to decide what to include in your expenses and then estimate how much money will go for each.
How to Boost Your Emergency Fund Savings
We’ve established the percentage of your income that should go into your emergency fund savings. What if I told you there are ways to increase that amount and save more? This works for not just your emergency fund but also your general savings. These methods work for me, and I believe they will work for you as well:
∙ Check areas like subscription services and gym memberships in your monthly budget where you can cut or modify your expenses. It doesn’t necessarily have to be a gym membership or subscription service; just something you can do without.
∙ Limit how often you eat out and start eating the bulk of your meals at home. You will still spend, certainly, but not as much as if you are always eating out. Here’s what I do: I shop with a grocery list, purchasing my main food items in bulk as much as possible. Also, I work with a weekly menu; then, I choose a day of the week when I prepare my meals for that week. You will need to get reusable containers for storing your prepped meal.
∙ Get a job or side hustle; there are many things a student can do to increase his income. For instance, you can market your skills (animation, voice-over, photography), make deliveries, or take on part-time and seasonal jobs.
∙ Sell unused items like electronics, books, clothing, and collectibles; trade them online for cash.
∙ If working during an academic year will be too much for you, set your summer breaks aside for paid jobs. You can work as a camp counselor, lifeguard, professional intern, or retail associate.
Budgeting Your Income in College: Tips and Tricks
Before discussing how to budget your income, let’s discuss the types of income you’re likely to have in college. The first is your total income; this covers any money you resume school with, earn from work, and receive as financial aid. Next is your monthly income — funds from your job or other funding sources. Now, how do you budget these incomes and save more in college?
∙ Break Your Income Down
You first want to break down your income, including financial contributions from family members and part-time jobs. Put a number on how much you get from each quarter you get your finances.
∙ Assess Your Expenses
Next, assess your financial situation and review your earnings and spending. List out the things you spend money on and how much each costs on average; then, categorize each expense under “wants” and “necessities. For instance, prescription medicine is a need, while a daily cup of coffee would be considered a want.
∙ Calculate the Numbers
Now that you have all the numbers in one place, it is time to crunch them. First, add all your expenses; then, subtract whatever number you get from your monthly income. If you’re getting a negative number (say -$450), you spend more than you make monthly. If it is positive, you have extra spending for your savings and emergency fund.
∙ Now, the Budgeting
With the numbers calculated, look through your expenses to see what you can cut or adjust from your list. For instance, if you always eat out, consider home-prepped meals instead. Also, if you spend up to $50 on movies monthly, you may want to cut it out to balance your budget.
Cool Tips for Managing Your Finances and Saving Money in College
Saving money in college is no child’s play; you must deny yourself some things. You will also need to be smart about it, which can mean playing the student card in some situations. With that said, here are some tips that have helped me save money in college:
∙ Always have your student ID.
I meant this, or at least one of the things I meant by “playing the student card.” You can get discounts on many things, including laptops and clothing, by simply showing your student ID. That’s less money spent on that particular item, which you can divert to some other necessity or, better still, your savings.
∙ Borrow textbooks
Having your own textbooks is always a good idea, but if you want to save money, you’ll have to borrow them sometimes. Considering how expensive textbooks can be, borrowing from your fellow students or the school library is a better option. If you can’t find someone to borrow you, you can buy or rent used textbooks instead of new ones.
∙ Leave your car out of campus.
You can do without gas, parking, and insurance for now, especially since they are substantial expenses. Instead of bringing your car to campus, you can take public transit or borrow a friend’s car if you’re going a long distance. Transport companies like Uber and Lyft also come in handy if you need affordable ways to move around off-campus.
∙ Choose to house wisely.
Ironically, it costs less to live off-campus than on-campus. That is mostly because you can have a roommate with whom you can split the cost if you live off-campus.
∙ Take advantage of reward programs and cashback.
Cashback and reward programs like Payce let you earn or save cash for items you buy. These items include fresh food, laundry detergent snacks, and other necessary purchases.
Conclusion
Surprise bills are a part of life, and you will face them in college; having an emergency fund saved up saves you from financial difficulty. As college students living away from home, we have many needs to tend to. Depending solely on what I got from home was a mistake I made in my first months of college. I soon found myself in more debt than my monthly allowance could cater to.
You don’t have to be a broke college student; you just have to learn to spend wisely and save. Remember, getting your college degree is the most important thing right now, so don’t let that suffer. At the same time, saving as much money as your monthly income can allow you to have something for emergencies. Good luck!
