Whether you're a full-time or part-time student, university or college life is tough, but what makes the process even more difficult is the inability to save money due to the increasing expenses and the accumulation of debt. Some are able to manage the expenses by working a job on the side, but for others, that can make school life even more difficult. Whatever situation you find yourself in, you can always start saving somewhere, even if it is the smallest amount.
1. Examine your expenses
Have a look at how much you are making every week or month. How much is coming out of this income for your expenses? These will include everything from subscriptions, to bills, student supplies, tech, fuel, and rent or accommodation. Writing down these expenses will help you put your spending into perspective. You will need to consider which of these are most important, depending on what you utilise the most.
For example, if you are a student that travels frequently to university for your classes, your travel expenses are necessary in order to complete your degree. However, if you are an online student, you probably don't need to travel as much, and may need to prioritise your income on things like the technology you use to learn from home. This may include your computer or desk setup, along with ensuring you have stable connection while learning online.
Also examine the expenses that may not be of use to you. For example, are you subscribed to streaming services such as Netflix or Spotify, and find that you don't really use them? Consider cancelling subscriptions that are not being used regularly, as they tend to add up. Keep in mind whether your subscriptions renew automatically, as companies will bill you without warning. Reducing the tendency to 'eat out' can also go a long way to keeping more money in your pocket. Instead, opt for making simple meals that are better for your health and productivity long-term.
A good way of affirming whether an expense is useful or important is to consider whether it is a need or a want.
2. Make a budget and stick to it
If you take into consideration how much you are spending on subscriptions and necessities, you should be able to work out how much you spend on a weekly or monthly basis. Use this as a guide to work out how much you need to put aside for important expenses like your phone bill, rent, fuel, or food. To work out a 'budget' that is fitted to you, use the total cost of your current basic necessities as a guide. Use this new budget to inform your future choices. If you know you are going to need a certain amount every month, take this amount out of your earnings and set it aside for when those expenses arise.
Additionally, you may find it useful to start an emergency fund separate to your savings. Having a dedicated emergency fund can go a long way in helping you maximise your savings, as well as keep you prepared for unexpected costs like car repairs, broken tech, and your health. By separating your needed expenses from your emergency fund, you can decide how much to save with the remaining income.
3. Set yourself a goal
Writing your budget down instead of just thinking about it can help motivate you to stick to your savings plan. After writing down your budget and expenses, you will have a clearer idea on what you will be able to save. This can help you set up specific financial goals, such as reaching a certain amount by the end of a month, or dedicating a particular amount on a daily or weekly basis. The amount you dedicate to save each day or week does not have to be big. Even putting aside small amounts like $5 a day can add up in the long-term.
Setting goals can help you manage your earnings and expenses by ensuring you don't spend on things you do not need. You can track your goals by also utilising earning and spending trackers. These trackers are very helpful as they allow you to visually see what you are making and what you are putting in. You can find a free spending tracker here to download.
Also consider your short-term and long-term goals as a student. As a student, your long-term goal is most likely to graduate and hopefully commence a successful career in your field. Short term goals that can progress you to this stage would include going your classes, completing your assessments, or working your part-time job. Aligning your current financial goals with your future financial goals will help you stay consistent and not lose focus of your objective.
You will also find that reaching your smaller financial goals (e.g. reach $$$ by end of the week) will inspire and motivate you to pursue your bigger ones (e.g. pay off student debt).
4. Control your impulse buying
Now, even I am guilty of this one. Let's be real. It's hard as a student to see others live your dream(s). Sometimes this results in us falling into FOMO (fear of missing out), and going on a spending spree to immediately fulfil our wants and desires. Soon enough we realise that although retail therapy can help us in the very short-term, it does not generally help us feel better in the long-term.
So how do we curb this potentially dangerous habit? Think about each item that you are currently wanting to purchase. Is it a need or a want? How will it benefit you in a week's time? Or a year? Will it continue to provide you the same feeling or benefit each time? If you ever find yourself stuck in a position where you are really tempted to purchase something, leave it for at least another two weeks and see if you are still passionate about buying it.
I know what you're thinking, I can't do that! But give yourself at least two weeks, and see if it helps curb your need to purchase it. Also consider whether it is something that can benefit you long term. Now, eating food is obviously a need but if it's ordering food, then this is very much a want. Instead, consider whether you can make something similar in your kitchen.
If you are really interested in purchasing an item of clothing, consider whether you need it because you saw someone else wearing it, or because it is something that is going to meaningfully contribute to your life.
Creating another fund designated for spending on leisure, in addition to your emergency and priority funds, can also help prevent you from spending out of your savings. It can also give you the satisfaction of spending your money where and how you want while being self-disciplined. By starting a leisure fund, you can set aside income for splurging on yourself, which can also help motivate you to save in its own right.
The most important thing to take away from saving as a student, is that it is okay to spend on yourself, but doing so excessively will lead to your finances controlling you. Remember, it does not matter where you start, just as long as you make a start.