College is an exciting time filled with new experiences – but it can also be financially challenging for both students and their families. As a San Leandro college student, you may feel like saving money is impossible while paying tuition and other expenses. However, developing smart habits now will help you in the future.
As a financial representative with Modern Woodmen of America, I offer these tips to San Leandro students to be proactive and strategic with their money.
Understand your full financial picture
Take stock of your income sources, including financial aid, grants, scholarships, family support, and wages from a campus or part-time job. Then compile your regular expenses, like tuition, books, housing, transportation, food, entertainment, and more. List all of your expected income and expenses for each month and look for opportunities to trim costs.
Set specific saving goals
A defined saving goal gives you something to work toward and stay motivated and on track. Determine how much you need to save and when you need to save it by. This gives your saving efforts clear direction and purpose. Goals can be:
- Short-term, such as saving for books each semester, a deposit on an apartment, or a spring break trip.
- Midrange, like saving money to study abroad, buy a used car, or pursue an unpaid internship.
- Long-term, such as saving for graduate school tuition or a down payment on a home after college.
Make Saving Automatic
Set it and forget it! The most effortless way to stash cash is automation. Have your bank regularly transfer funds from checking to savings and time the transfers to hit soon after financial aid, scholarships or your paycheck hits your account.
Redirecting part of your income prevents temptation to spend it elsewhere. Your future self will thank you!
Harness tax breaks
Are you leaving money on the table? According to https://www.irs.gov/credits-deductions/individuals/llc, the Lifetime Learning Credit gifts up to $2,000 per year for tuition, books and required equipment. Better yet, according to https://www.irs.gov/publications/p970 the American Opportunity Tax Credit grants up to $2,500 in annual tax credits for qualified expenses during the first four years of college . Consult a tax professional to maximize potential credits.
Earn interest with a high-yield savings account
A FDIC-insured, high-yield savings account offers higher rates to accelerate growth through compound interest. Banking with an established institution also provides quick access to your funds, if needed.
Investigate banks and credit unions to find the highest annual percentage yields. Open an account now to start earning on your savings!
Check for campus perks
Many colleges partner with banks or credit unions to offer special packages for students. Look for waiver-friendly checking, better rates, financial literacy programs, and more.
Find creative ways to earn
Explore opportunities to build your savings through tutoring, taking notes for students with disabilities, administrative work, or guiding campus tours.
You can also use your skills or hobbies to offer music lessons, sell handmade crafts, referee youth sports, or babysit professors’ kids.
Invest in yourself
Spending wisely and saving sufficiently to take advantage of special developmental opportunities can have untold future value. Pursuing leadership roles, volunteer work, internships or study abroad programs lead to growth that pays off long-term – even if they’re unpaid now – by expanding your experiences, knowledge, skills, connections and credentials.
Start small, be consistent
Building up your savings doesn’t happen overnight. Focus on consistently setting aside small amounts whenever possible rather than sporadically saving large chunks. Over time, those small deposits add up through the power of compound interest.
Even transferring just $25 or $50 per month from your checking account to your savings account can make big impact. Pack your lunch instead of eating out, skip the morning coffee shop run, or rent textbooks instead of buying them new. Small daily choices allow you to put extra dollars toward your goals.
Saving money may not come naturally as a college student on a limited budget. But making it a priority now sets you up for financial stability and flexibility in the future. What you learn about money management now will benefit you for the rest of your life.
* Securities and advisory services offered through MWA Financial Services, Inc., a wholly owned subsidiary of Modern Woodmen of America. Member: FINRA, SIPC. Insurance and investment products are not FDIC insurance, have no bank guarantee, and may lose value. Tax issues are complex. Consult your tax professional before making a decision.
