Can You Save Money as a Student With Limited Income?

It’s possible to save money as a student, even if you earn minimum wage.

How to save money effectively as a studentIt’s not easy to save money as a student, particularly if your on-campus or off-campus job pays you a pittance. However, if you make saving a priority and utilize some of the creative tactics outlined below, you can put aside a surprising amount of money while you continue to pay tuition, chip away at your student loans, and make the most of student life.

Automatic Savings Deposits

The sooner you get into the habit of putting aside money for savings, the better. If invested correctly, the savings you begin to build up now could pay huge dividends down the road. Even ten dollars a week could make a major difference in your long-term savings. Make saving easier by setting up an automatic deposit system with your bank. You can arrange to take a certain amount of money out of your checking account every month and place it in savings. Resist the temptation to simply divert this money back to checking; once it hits your savings account, it should stay there.

Determine a Prudent Balance Between Savings and Paying Off Loans

If you’re like most students, you’ve taken out at least one federal or private loan in the interest of covering your tuition bill. Many loans allow you to wait until after you’ve graduated or stopped attending college to start making payments, but this approach isn’t always wise; it’s a quick recipe for extensive interest. Unfortunately, few students can afford to both pay down student loans and put money into savings at the same time.

There is no one clear approach to savings and loan payments that works best in all situations; a lot will depend on your interest rates, both for your loans and your savings account. Having an emergency fund is always prudent, so work on building that up first, and then, once you have a little money set aside, split your efforts between student loan interest (which you can write off on your taxes) and savings.

Put Your Entire Tax Refund Toward Savings

How to save money effectively as a studentThere’s nothing quite like receiving that much-needed refund and going on a big shopping trip. But is that the best use of your refund? Depending on how much you get back, you could potentially put hundreds of dollars — or more — toward savings. Look carefully into write-offs to determine whether you can maximize your return. Although students tend to be ineligible for most write-offs, you could potentially use charitable contributions, health care expenses, student loan interest, or even tuition. If necessary, consult with your parents to determine who will take education tax breaks.

Live at Home and Attend Community College

If you’re blowing all your money on tuition and an overrated dorm room, you’ll never have enough to set aside for savings. Consider rethinking what it means to have a true college experience — do you really need to live on campus? By swapping those first two years at a more expensive institution for community college, you could save tens of thousands of dollars, giving you more room to invest your meager paycheck in savings. Furthermore, if you spend those two years living with your parents, you can save a bundle on rent and meal plans.

Saving is rarely a priority for college students, but it should be. Even if you make minimum wage and only work a few hours a week, you can still get into the habit of setting aside a few dollars each week. The more you save now, the better off you’ll be after graduation.

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