College life? It’s not all carefree. For a lot of us, college is the first taste of real independence; but that can also mean newfound responsibilities. Budgeting for college students can be especially tough: Balancing classes, maybe a job, and being fully accountable to yourself is a lot to take on. (Don’t worry, you got this!) One of the biggest responsibilities is managing a personal budget, possibly for the first time.
Some may think that crippling student debt is a uniquely American issue, but debt accrued by Canadian students has been on the rise for years, with the debt cost of a bachelor’s degree now averaging around $30,000 upon graduation. Being saddled with debt when leaving college can be a major burden for a lot of young people, and the spending and saving habits formed during college years can follow us long term.
KOHO represents an ideal introduction to the world of personal finance. With easy-to-use tools designed to track a budget, and no-interest spending through prepaid Visa accounts, KOHO is a great first step to developing lifelong financial responsibility. Here are some practical, real-world budgeting tips that college students can take advantage of, and how KOHO can help reinforce those smart spending and saving habits.
1. Get a job
Of course, college should be fun. The freedom of being on your own for the first time is something to be savored and the social aspects of college are nearly as vital as classes. But if you’re able to, adding a part-time job to the equation can be a huge help to managing a budget. It’s estimated that 40% of students hold down jobs while in school, so it’s not an unprecedented challenge. Many college jobs have flexible schedules built to accommodate students, so if you can, find something that can fit into your workload without spreading yourself too thin. That little extra cash can make a huge difference in managing a budget. KOHO can be set to quickly receive direct deposit funds, making your money available to you when you need it.
2. Pay off high-interest debt first
Accruing credit card debt can be a particularly insidious outcome to living on a budget. And sitting on high-interest debt can be financially ruinous in the long run, because it will grow at higher interest rates than other debt. Additionally, it can affect your credit score over time, creating a snowball effect no one wants. Remember, you’re already accruing student loan debt, so chipping away at higher-interest debt as a priority will help in the long run.
You can configure KOHO to handle not only your credit card payments, but also to deduct and manage your other bills so they’re taken care of automatically. If you’re able to, double or triple high-interest debt payments to cut it down as much and as quickly as possible to keep it from ballooning.
"For a lot of us, college is the first taste of real independence; but that can also mean newfound responsibilities."
3. Shop deals and use coupons
Using coupons is definitely not the coolest thing in the world, but it’s certainly cooler than paying full price for something you could get cheaper. Keep an eye out for deals at retailers when you’re making everyday purchases. KOHO offers additional cash back with multiple top retailers across Canada, which can be a great place to start when searching for deals. A little bit of diligence in researching price comparisons can wind up saving you big in the long run. Especially when you make deal hunting a part of your buying routine, the savings made each month can really add up over time.
4. Keep an eye on student discounts
There are a number of deals, offers, and special prices that are granted to students; take advantage! When you’re making a purchase or choosing between services, compare whether they have options available with a student ID or email. You’re already paying for school, you may as well get some special financial perks out of it!
5. Use financial apps
With apps available for pretty much everything these days, it makes sense that there are countless personal finance apps out there to help you keep a tight budget by monitoring your spending. Apps like Mint work to track spending across all of your accounts versus your income. Or, you could use KOHO, which not only offers detailed categorization of your spending habits to more fully track your budgeting, but also has a RoundUp feature that sets aside spare change to be saved for later. Need a place to start? Try our ultimate budget template by entering your email at the bottom of this article!
"Using coupons is definitely not the coolest thing in the world, but it’s certainly cooler than paying full price for something you could get cheaper."
6. Don’t waste food
$31 billion of food is wasted in Canada each year; can you afford to be a part of that problem? When you’re grocery shopping, avoid overbuying, especially perishable items that may go bad before you get a chance to eat them. By spending smartly on a mix of items with long shelf lives and fresh ingredients, you can not only spare yourself from wasting money, but you can help the broader problem of food waste.
7. Collaborate with roommates
Having roommates in college is pretty much a necessity, so if you’re planning on doing college solo, you may be setting yourself up for a much more expensive ride. Of course, living with roommates can be a challenge in its own right, but the savings on housing make it well worth it. It’s key to go beyond just having roommates to cut down on housing costs though. Setting aside funds for food and house necessities like toiletries and cleaning supplies can be great for financial responsibility. You could even consider a KOHO joint account designated for house expenses that everyone contributes to each month. That way house bills and joint food costs can be covered as a team. It’s always a challenge managing the personalities of roommates, especially when money is on the line, but creating communal expenses for the house where everyone has a stake can lead to big savings.
8. Set aside funds for fun
There are expenses that you’re definitely going to have: food, shelter, gas or public transportation, and other necessities. In building your budget, calculate those monthly costs, and then choose how much you can reasonably afford on discretionary spending for clothing, dining out, and other things you enjoy but may not need.
For those discretionary expenses, set a certain amount of cash aside each month. By paying for those expenses from a finite source, you’ve given yourself a limited amount of resources for fun that you won’t feel guilty about or risk overspending for. When the discretionary cash is gone, your fun expenses are exhausted for the month. And who knows, maybe you’ll have some left over, which you can save for a larger purchase later on!
9. Take advantage of free events
College campuses are hotbeds of free activities built for the budget-conscious student. Keep an eye on activities calendars and note special events at institutions in your area. Museums will often offer free admission for college students on certain nights, and there are countless free concerts and film screenings hosted by student organizations. Going to free events can be a great way to remain active in your community and socialize without blowing your budget on bars, restaurants, and expensive show tickets.
10. Be conscious of your books
One of the expenses students don’t factor in until it’s too late is the cost of textbooks and other materials. Textbooks can run as high as $1,000 per semester, which is pretty crushing when you’re already living on a shoestring budget. Always opt for used books whenever possible, and sell back any books you won’t need anymore to student bookstores to help defray some of the cost. Also, compare prices online to see if there are international versions of textbooks that can be bought for cheaper. It’s also important to take stock of how long you’ll need a book; if you’re only going to need a book for a few days or weeks, try and rent the book from a library to avoid buying it for short-term use. You’ll save some dollars and trees!
"Going to free events can be a great way to remain active in your community and socialize without blowing your budget on bars, restaurants, and expensive show tickets."
11. Take stock of what you use and pare down
There are a number of items and expenses we all carry with us that aren’t strictly necessary, but serve to weigh us down financially and can stifle our space. If you have a number of items you’re not using, consider selling them on eBay, Poshmark, Craigslist or any number of other services for selling goods; you’ll pare down your space (which in turn can help save in the long run on moving costs), as well as put some extra cash in your pocket.
But don’t limit an audit to just your physical belongings: take stock of subscription services you’re paying for each month or year, and get rid of the ones you’re not using frequently enough to justify the expense.
12. Get a cash back credit card
Credit cards can be a big responsibility for someone managing a budget for the first time, so proceed with caution. If you feel like you can manage expenses well enough to get a credit card make sure you’re getting one that offers cash back incentives. If you’re concerned about taking on the responsibility of a credit card but still want cash-back perks, consider a KOHO account, which earns you cash back on every spend with a prepaid Visa. KOHO helps you earn on everyday spending, and ultimately, keeping your money where it belongs, with you.
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