BUDGETING

Budgeting 101: Saving on a Limited Income

Saving money while in college can almost feel impossible when you have limited income. Planning to pay for college expenses such as books, tuition and transportation may make it seem like there’s nothing left at the end of the day. However, the idea of saving doesn’t mean you have to save a lot of money— it means you need a plan. Here are a few tips to consider as you prepare to start your savings journey.

Get Started Now

You don’t have to wait until you find a full-time or higher-paying job to get started. The best time to start adding to your savings can be now. Simply adding $5, $10 or $15 each time you get paid can start creating good saving habits. Instead of focusing on how much you wish to save, you may explore thoughts on how much money comes in each month and what expenses you can reduce. These ideas can help you create an attainable goal that won’t prevent you from missing paying important expenses.

Pay Yourself First

A great way to save money is to transfer your desired funds to a savings account before you can spend it. This can help keep you focused on paying your expenses, as the money for your savings account is already moved out of sight. Even with a limited income, you can start out by setting aside $5 or $10 during each pay period.

Spot Your Spending Leaks

Little expenses, such as food deliveries and daily coffee, can add up to a large impact when you're budgeting with a small income. Try to review your transaction statements for the past 30 days to identify how much you spend on these types of purchases. From there, you may choose one or two expenses that can be reduced and rerouted towards your savings. This step alone can start to show a positive change to your savings account balance.

Student Discounts

As a student, the power of discounts is held just by having your student ID. It can be used as a money-saving tool in certain places where you choose to spend your money. This can include retail stores, restaurants, entertainment, transportation, and even computer software you may need for your college courses. You can always ask if a student discount is offered, both in person and online. This simple question can save you hundreds of dollars throughout your college career.

Stretch Your Food Budget

After reviewing your statements, you may notice that food is your biggest category for overspending. Take control of your food spending habits by shifting your choices. You can cook larger portions and save leftovers, compare prices between grocery stores by checking apps, and take advantage of campus food resources that are commonly available to students. The decision to avoid placing a food delivery order that costs $15 every week can guarantee you $780 in your savings by the end of the year. Small changes now can mean more for your savings account later.

Set Your Emergency Fund Goals

Establishing an emergency fund can stop an unexpected expense from becoming credit card debt. Remember, this doesn’t mean you have to start saving hundreds of dollars. You can begin with a small goal, such as $200 or $500. An emergency fund is only available for your emergencies — things like car repairs, medical care costs or unexpected school expenses.

The idea of saving money on a limited income doesn’t mean you have to be perfect or sacrifice the things you enjoy. It just means you are more intentional about the financial choices you make with the money you have. The key is to start small, track your expenses and look for ways to reduce nonessential expenses. If you can make good choices now with a limited income, you are setting yourself up for a successful saving journey for the future.

Sources:

https://www.fidelity.com/learning-center/smart-money/how-to-save-money-in-college