High school juniors and seniors—I’m talking to you. It’s never too soon (or too late, for that matter) to start developing good money habits. If you’re planning on heading off to college soon, you might be expected to manage your own saving and spending. Here are some pointers to help you save some money before your college journey begins.
Why should you save for college?
Saving is always a smart move, but especially for college. Not only do you need to pay for housing, school supplies, meals, and transportation costs, but there’s also the lesser-talked-about necessities like paper towels, trash bags, toiletries, and more. Plus, don’t forget that you’ll want late night pizza with your friends, impromptu shopping trips, last-minute concerts, and a bunch of other stuff. The list goes on and on, and it varies depending on whether you’ll be living on or off campus, but either way, your spending can really add up. Having some money set aside can really help you manage these costs.
After tuition, how much additional money should you save?
The amount of money you need outside of tuition will 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 bills?
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.
How can you save for college?
Saving and budgeting before you start your freshman year will help you focus more on school and less on scrambling to pay for things.
Here’s where you can start:
Begin with a budget. Now’s a great time to start thinking about your spending habits (if you haven’t already). This monthly budget worksheet can help can help you understand what you need each month, and how much extra you’ll want to earn or save now to make it happen. There are also lots of monthly fixed and variable expenses to keep in mind, too: the Department of Education made a list of common costs that could help you. Don’t forget about the expenses that change from month to month, like getting to and from school during winter break.
Outline your savings goals. Will you be saving up to pay for your fixed expenses, like your phone bill, car payment, and rent? Or do you need to save for variable costs like clothes, entertainment, and spring break plans? Whatever your goal is, knowing what you’re saving for will help keep you motivated and on track.
Open a bank account (or two). To grow your savings, you’ll need a smart, convenient place for your money to grow. If you haven’t already, now is a good time to open both a checking account and a savings account. Having both can help you categorize your funds, making it less likely to overspend and easier to save.
You’ll also want to find a bank with these key features:
o No monthly fees or minimum balance. Other fees to avoid can be for ATM use or for overdrafts. Your goal is to save as much as possible, not to be penalized when you withdraw funds to cover school supplies.
o A good location with ATMs on campus or near your housing. If you need to access your savings or checking account in a pinch, you don’t want to have to search high and low for a place to do it.
o Automatic deposits for your income. That way, it’s a “set it and forget it” way to save. Some banks will waive minimums and other fees if you have money directly deposited every month.
o A mobile app. Almost every bank has an app, so download it! You can make deposits, transfer funds, pay bills, and more through the app.
Automate your savings. If you have a regular source of income (part-time job, allowance, etc.), it’s a good idea to build automated savings into your routine. Turn your savings account (or money market account) contributions into a monthly expense.
If you get a paycheck, you can have some money deposited directly into your savings account. This way, it’s money that you don’t have to think about.
What options do you have to save for college?
After you’ve taken those steps to start saving for college, here are some other things you can do:
Use your phone. Download your bank’s mobile app so you can easily transfer funds into your savings account and monitor your savings. There are also a few 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.
Consider a part-time job. Working is a win all around—you can start building your resume, gain experience working with people, and earn money! There are so many types of jobs out there, ranging from internships to working at a local ice cream shop.
Sell your unwanted goods. Selling things you don’t want or need anymore have more pros than just you earning some extra cash. You can help others in need and enjoy the peace that a clutter-free space can bring. Here’s how to get started.
First, think about what you don’t need anymore. Do you have clothes you don’t really wear? Books you’re not reading? Furniture pieces you could live without?
Next, decide whether you want to sell your items at a consignment store, or through an online seller. There are tons of apps and websites where you can sell your stuff at your own prices. Social media is also a great place to sell things to people you know.
Turn gifts into savings. Some people get cash as graduation gifts (lucky you if you’re one of them). Instead of spending right away, think about putting some of it away as savings. If it helps, you can even tag it as savings for a particular school expense, like a new laptop or dorm supplies.
How much should you save for college?
Saving for college now means less money you’ll have to borrow or pay out of pocket. However, the thought that you’ll save the entire amount needed to pay for college as an incoming freshman—including tuition and fees, room and board, books and supplies, and everything else that comes with college—is daunting. So how much do you really need to save?
Start with a goal that’s more manageable. 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 a high school senior, and you want to save enough to cover your textbooks next year as a college freshman. According to the College Board, the average undergraduate will spend about $1,240 a year on books and supplies1. If you’re at the start of your senior year in high school, you have about 12 months left to save. If you set a monthly goal, it’d be about $112 a month.
When learning how to pay for college, there’s a lot of talk about scholarships, grants, and loans. But the more you can save for college now, the more you’ll have for everything you need. The saving habits you develop now will help you manage money all through your life.