College Strategies

Lesson 6: Spending, Saving & Financial Aid

Apart from learning a lot of things in college you choose, or don’t, you will be forced to learn how to deal with money. Whether you have a part-time job, a loan or you receive money from your parents to pay tuition, it is important to know what to do and where to find financial aid when you need it.

The Art of Saving

Saving is truly an art, and people who are broke usually choose to be. I am not talking about a homeless person on the street; but I am talking about students and professionals who just do not have solid money management skills. To know how much you can spend or save, you have to know first how much you make!

As income in this lesson we are considering conventional income; from a part time job for example, and non conventional income: such as loans and grants.

Any money that goes into your pocket, one way or the other, is income. First of all you need to know what your fixed-can’t-do-anything-about-it spending is going to be: tuition and rent. You have to pay these two for sure. So calculate what the exact amount is, and subtract it from your total expected income. If you already have access over your funds, whether that be through a loan, money from your parents or from your job, put that amount away in a fixed deposit or high interest savings account. While you have it you might as well make some extra money with it!

Do some research on different savings plans in different banks; especially if you receive your interest free government loan before your tuition payment due date the only sensible thing to do with the money is to lock it away in a 1-2 month fixed deposit/savings account. Do not speculate with this money, because any sort of mutual fund, stock or other investment can be very volatile and you might end up loosing a large part of the initial sum.

After you deposit this money dedicated for your tuition and rent, you might have a sum left. Do not go on a shopping/party binge and spend it all! It will be your grocery money. If you are still living at home though, put it away as well so you get interest. If you have a part time job, or you are going to have one throughout the school year, always set aside 10% of your pay and deposit it in a savings account. You never know when an emergency might come up and you need some fast cash. No matter how little you make; you are not going to miss the 10% and you will learn how to make due without. Any big business book on the market will advise you to pay yourself first before paying anyone else. That is the only way to hold onto money and not go broke.

Buy items in bulk when you can, or share them with your roommates and split the costs. This can save a lot of money in the long run. When buying fruits and vegetables stick to what is in season, it is what your body needs anyways and fruits and veggies in season are much cheaper. Also try to eat out less; if there is a particular hamburger place you really love consider checking out what they put on the burgers and make it at home. It will likely be less greasy, healthier and definitely cheaper. Eating out is what robs most students of their money big time. It can really add up and dig into your budget.

If you are paying utilities in the place you live, make it a habit to turn off the lights when they are not being used. If your roommates are horrible at it, force them somehow to do it anyways; for example bill them a quarter every time they don’t. It is also not necessary to wash all your clothes in hot water; usually they do not get dirty enough to make that necessary, unless if you have serious grease stains. Save up the stuff that has to be washed hot and never run half a load. Also consider hanging some things to dry and using your dryer mainly for large items like bed sheets.

Turn off appliances instead of leaving them on stand-by can also curb your hydro bill at the end of the month.

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