If you’re in university or college, you’re likely getting the education you need for your future career. But you might not be as knowledgeable about your personal finances as you are your major. Our summer savings tips can help you avoid burning through student loans before the next school year even starts.
You might be asking yourself why that’s so important. After all, once you’ve graduated and started working, you’ll pay it back, right?
The problem is diplomas typically come with a pretty hefty debt. As a Licensed Insolvency Trustee, I have seen it time and again – students and recent grads turning to credit cards for their daily needs.
It becomes hard for them to keep up with paying even the minimum balances on those cards, let alone repaying their student loans. Not long after that, calls from credit card companies or debt collection agencies follow.
So how can you make smarter choices when it comes to your finances?
Here are 10 summer saving tips every college student and recent grad should know.
Be involved with your finances every day
Dedicate a notebook to tracking your expenses. If you write down every single expenditure you make – no matter how small – you will know exactly where your money is going. You become accountable for what you spend. This practice will also help you to…
Work out a budget
By starting each month with a real budget in place, one where you allocate your dollars to something specific, you take control of your finances instead of just letting life happen. You should understand how much money you have coming in, and how much you should spend every week to stay within budget.
For example, if you have a summer job, figure out your take-home pay. Add up your necessities (rent, utilities, groceries, transportation, etc.) so you know what is left for spending and saving.
Cut the fat
Think back to just the last month of your spending. Did you waste any money on junk or fast food? Maybe you bought some throwaway products, or enjoyed luxury services you didn’t really need? It’s time to focus on spending less than you make and getting rid of the things you thought you needed or wanted – but probably really didn’t.
For example, instead of spending money at a salon getting your nails done, try doing it yourself at home. Maybe make a spa night of it with a friend. Instead of going out to the movies, subscribe to Netflix or another streaming channel. You’ll get access to what feels like an endless amount of shows and movies for the price of less than one movie ticket per month.
Prepare food in advance, rather than taking out for convenience
It’s cheaper to make your own food. Buy ingredients that are on sale and consider making meals in advance and freezing the extras. For example, if tomatoes are on sale, stock up, make a pasta sauce or lasagna, and freeze the unused portions. Thaw it in the fridge the day before you want your “instant meal” ready.
You may also want to invest in a slow cooker. This way, you can prep your foods when you have time (for example in the morning) and pop it into the slow cooker, which will be ready to eat by the time you return home in the evening.
Shop second hand or consignment stores
If a new summer wardrobe is a necessity in your mind, you can still enjoy one. We would just advise you to do so frugally. There are some interesting, unique finds available in thrift stores. You may even run into items with the original tags still on, and end up paying only a fraction of their retail cost.
Splurge only on what you truly love
Many people confuse being on a summer budget with being bored. But if you eliminate the unnecessary things that you don’t need – or even want – you’ll free up some savings to splurge on the things you are passionate about. Whether it is a getaway to a place you’ve been wanting to check out, or a guitar you’ve had your eye on that just went on sale, be sure you save regularly so that you can use those savings toward something you love.
Use only debit – not credit
This way, you will only spend money you actually have so as not to get further into debt.
Start an emergency fund
It is never too early to start saving your money. Many graduates are left jobless right after they get their diplomas. You may need to have some rent money saved to get you through to your first post-college job. Aim to set aside as much as you can so that one day in the not-too-distant-future, you will have saved at least six months worth of living expenses.
Pick up a book on personal finances
Over the summer, pick up a book at the library on handling your personal finances. This work now will reap dividends later. I like The Money Book for the Young, Fabulous & Broke by Suze Orman.
Don’t take on more debt
If you keep your debt down, you open yourself up to a wider range of job opportunities when you graduate. That’s because you’re not pressed to immediately start working at any job to pay off spiralling debt. This way, you can pick the position that best suits you and your future career goals.
If you’re a student considering taking on more debt, your next best step is to contact a Licensed Insolvency Trustee before doing so. The financial decisions you make today can have a serious impact on your tomorrow.
Contact a Licensed Insolvency Trustee Today
If you’re starting to get concerned about your student loans piling up or your reliance on credit card debt, contact a Licensed Insolvency Trustee.
At your free initial consultation, we will review your financial circumstances and advise you on every debt relief option available to you. We’re able to assist with the full range of debt relief options, from simple budgeting help all the way to filing for bankruptcy.
By nipping any debt issues in the bud early, you may save yourself from the stress and anxiety of being in way over your head. Contact us today and get started on the road to better financial health.