College | July 19, 2022 | Ashley Boucher
It’s never too soon (or too late, for that matter) to start developing a strong foundation of financial habits and behaviors. This is especially true for high school juniors and seniors who will be headed off to college soon, where they may be expected to manage their own saving and spending.
Seems like a no brainer but that question comes up a lot. Well, as you probably know by now, paying for college means more than financing tuition. In many cases, students need to pay for housing, textbooks, meals, utilities, entertainment, and gas or other transportation costs like rideshares. There’s also the lesser-talked-about necessities like paper towels, trash bags, toiletries, etc. The list can vary depending on whether you’ll be living on or off campus, but either way, your spending can really add up.
According to a 2021 College Board reportfootnote 1, full-time students paid between $18,220–$27,200 a year for out-of-pocket living expenses. This number can vary for each student, based on several factors: Will you be moving back home during the summer? Will you live on or off campus? Will you have a meal plan, or will you be cooking meals at home? Do you pay your own cell phone bill?
The answers to these questions will help determine how much you’ll need to spend each month—and can give you a clearer idea of how much you’ll need to save.
When you’re in college, you want to spend your time focused on studies instead of how to make ends meet. To help make sure you’re financially prepared, start thinking about saving and budgeting before you start your freshman year.
Having a plan is half the battle. Here’s where you can start:
After you’ve taken those steps to start saving for college, here are some other things you can do:
Use your phone. Did you know a key tool in growing your savings is already in your pocket (or maybe even in your hand) right now? That’s right—your cell phone is a huge asset in making sure you save successfully. By downloading your mobile banking app, you can easily transfer funds into your savings account and monitor your savings progress on a regular basis. There are also a few different mobile-savvy apps to help you save even more. For example, Simple and Qapital are both free apps that let you round up your daily transactions and place the ‘spare change’ into your mobile account. If you spend $2.80 on a coffee, for example, $.20 will go into your account. This is the digital equivalent of emptying your pockets every day and putting the change into a mug or jar.
Consider a part-time job. If you still have a summer or two before college, you might consider a part time job or paid summer internship. The benefits are endless: you’ll start to build your resume, gain experience working with people, and start to earn money! The different types of jobs range from working in a movie theatre, your local ice cream shop or bank, or ‘odds and ends’ gigs like dog walking, babysitting, or yardwork.
Sell your unwanted goods. The benefits of selling some of your unwanted or unnecessary items are endless! You can help others in need, enjoy the clarity a clutter-free space can bring, and potentially earn some cash. But you need to do some prep work.
First, what don’t you need anymore? A good place to find items you can part with might be your closet. What haven’t you worn in a year? What no longer fits? What could help someone else?
Next, find a consignment store and see what they may pay you for! Find out what guidelines they have—often they’re looking for specific brands or price levels, and they want Items that are clean, without holes or tears. If you don’t have a local consignment shop, you could host or join a community yard sale, or post on local Facebook pages geared toward selling.
Turn gifts into savings. If you’re lucky, your graduation may be celebrated by family and friends with a party, or even gifts. And if you’re fortunate enough to receive money for graduating high school, you might be inclined to dream up lavish or ‘fun’ ways to spend it. Instead of quickly spending whatever you receive, consider putting a portion of it away as savings. If it helps, you can even tag it as savings for a particular expense you’ll incur while in school, like textbooks or groceries.
Every dollar saved for college is a dollar you don’t have to spend out of pocket or borrow. That said, it may be unrealistic to think you’ll save the entire amount needed to pay for college—including tuition and fees, room and board, books and supplies, transportation, etc. This can add up, so how much do you need to save?
Start with a goal that’s a little easier to manage. Instead of wondering how much you should save for college, ask yourself how much you can afford to save each month. If you’re already in high school and planning to save, you have from a few months to a few years to divide your goal into months. Let’s say you’re an incoming freshman, or high school senior, and you want to save enough to cover your textbooks. According to the College Board, the average undergraduate will spend about $1,350 a year on books and suppliesfootnote 2. If you’re at the start of your senior year in high school, you have about 12 months or so left to save. In this case, if you set a monthly goal, it’d be about $112 a month.
There are a ton of options on where to save your money, but look for a few key features and benefits:
There’s a lot written on how to pay for college—with scholarships, grants, and loans. That’s true. But the more you can save now for college, the more you’ll have for all the extras, like books, personal items, clothes, and streaming services. The saving habits you develop now will be an important part of managing money all through your life.