More and more college students are graduating with thousands of dollars of student loan debt.This is a very alarming number. But what can college students do about it?
In order to buck the student loan debt trend, college students need to be proactive and financially literate.
With a proactive approach, college students can actually come out of school ahead. Meaning that instead of a mound of debt owed to the bank, you can have a mound of cash waiting for your instead.
Continue reading to learn 7 financial strategies to finish college with a small fortune.
Take Advantage of Scholarships
The best way to save money during college is to pay less for college. The cost of college is rising every year, so it is more important than ever to minimize how much you pay for higher education. If you don’t you could be stuck with crippling student loan debt that follows you for decades after graduation.
Take advantage of scholarships to reduce your total cost of tuition. Scholarships are free money, so try to get as many as possible. There are people who have gone to college for free because of scholarships. And not all these people received one massive scholarship, they took advantage of small scholarships with lower competition.
The Department of Education has some great advice for finding and applying for college scholarships.
Have a Job While in School
Obviously, it will be impossible to finish college with a nice nest egg if you don’t have some sort of income. Taking on a job while in college means you will have to prioritize your time. You will also have to say “no” to a lot of parties. But the benefits far outweigh the costs if you can handle it.
Sometimes on-campus jobs offer discounts on tuition, which is a major perk you should look for.
One important thing to note: your education should be the highest priority while in school. Don’t overwork yourself and be mindful of your physical and mental health. There is no point in working and studying so hard if it leads to a complete burnout.
Invest Your Savings
The next step to increasing your earnings once you’ve secured a job is to invest as much as you reasonably can. Make your money work for you by investing it in the stock market.
New services like Betterment make it easier than ever to open an investing account. Before you go crazy buying stocks, make sure you do your research. It is often said that timing the stock market is a fool’s game. Adopt the Warren Buffet mindset to investing think long-term.
Drop Your Meal Plan
If you are serious about making and saving money, you need to make your meals at home. Cafeteria meal plans might seem like a cheap and convenient alternative, but they are far from cheap. If you do the math, you will see that each meal costs $8-$14.
You can easily make cheaper meals at home with minimal effort. If you want to go all in, you can try to shop and eat like Mr. Money Mustache. If living off of rice and beans is a little too extreme for you, even prepared food is way cheaper than the restaurant or meal plan.
Bonus tip: Waiting tables at a nice restaurant is a great way to make over $100 a night while in college. And many restaurants offer shift-meals or at least 50% off.
Never Buy a New Textbook
The price of college textbooks is astronomical. Never buy a new textbook and always look for used versions. You can easily save hundreds of dollars a semester by shopping around online and at campus bookstores.
If you absolutely must buy a new textbook, consider sharing a copy with a study buddy. This won’t always make sense. But if it does, you just cut your textbook bill in half.
Bonus tip: A lot of students don’t want to go through the hassle of selling their textbooks at the end of the semester. Collect your classmates’ textbooks and sell them. The resale market is huge and some books for hundreds of dollars.
Avoid Debt Like the Plague
Debt is the enemy of wealth, especially for a college student. Avoid debt like the plague and your future self will thank you.
A lot of credit card companies spend a lot of money marketing on college campuses. Ignore them! If you can’t pay for it in cash, you can’t afford it.
If you do have to take out student loans, make sure to shop around for the lowest possible interest rate. And, if your loan lets you, make payments while you’re still in school. Even small amounts each month will make a big difference in the long run.
Cut Down on Housing Costs
Housing is one of the largest expenses (besides school) for any college student. Consider the cost of living on-campus vs. living off-campus. Every city and school is different, so do your research.
Sometimes off-campus apartments or houses are very affordable. Sometimes living in a dorm is cheaper. But be careful, if you don’t have a kitchen in your dorm you could be stuck footing the bill for an overpriced meal plan.
Having roommates also brings down your housing costs. Look for fellow classmates with a frugal mindset and aspiration goals. That way, you can all help each other reach your financial goals.
Building Your Small Fortune
If you follow all of the above strategies, you can graduate from college with a small fortune waiting for you in the bank. Carry these strategies into your adult life and you’re sure to live a life of financial independence.
The key tenets are easy: Reduce spending, increase earnings, and invest savings. Putting these tenets into action is the tricky part. It takes a lot of willpower.
The payoffs of saving in college will be worth it. You will leave college with a strong financial foundation that will lead to a life of financial independence. Instead of struggling to make student loan payments, you will be able to invest in yourself and your future.