If college is the first time you’re managing money on your own, it’s easy to blow past your college budget. But overspending could leave you broke — or worse, buried in debt.
According to Edvisors, 64% of college students have run out of money before the end of the semester. And the Manhattan Institute says that 68% of undergraduates are paying more than the recommended amount to attend college.
If you’re spending beyond your means at college, here are seven ways to take back control.
1. Rent or buy used textbooks
2. Don’t overdo it on dorm decor
3. Design a realistic college budget
4. Avoid using student loans on non-essentials
5. Take advantage of student discounts
6. Be careful about going out to eat too often
7. Ignore the pressure to “keep up with the Joneses”
New textbooks can be a big expense over the years, especially if you buy them from your overpriced college bookstore. According to the College Board, the average full-time undergraduate student at a public or private four-year school spends $1,240 on books and supplies each year.
To save yourself money, consider used textbooks instead. Online marketplaces like Chegg or Campus Books sell used textbooks for reduced prices. You might even be able to resell your textbooks and make some money back after your course has ended.
Besides buying used books, find out if you can rent any books for free from your library. That way, you can reduce a bill that would otherwise add up to thousands of dollars over the course of your education.
Although you want to make your dorm room feel like home, be careful not to overdo it with dorm furniture and decorations. In 2019, the National Retail Federation estimated that families will drop an average of $976.78 on back-to-college spending, with common purchases including electronics and dorm and apartment furnishings.
If you’re tempted to go all out in furnishing your dorm room, remember that your living situation is only temporary. You probably won’t hold on to a lot of the items after graduation. So think about what you really need in your living situation, and make sure to take advantage of back-to-school sales or special discount deals that happen around holidays.
Without tracking your expenses, you’ll have little way of knowing whether you’re overspending or not. Take the time to write down how much you spend each month, as well as any income you make from a part-time job.
Include major recurring expenses such as tuition, meals and room and board. Once you’ve allocated funds for these necessary expenses, you’ll see how much you have left for discretionary spending.
While you should set some money aside for going out to eat and social events, be careful not to go overboard. A budget-tracking app like Mint or YNAB can help you get a bird’s-eye view of your cash flow and ensure you’re not spending beyond your means.
While student loans can cover living expenses, be careful that you’re not using student loans on non-essentials. In 2017, Student Loan Hero discovered that students in the Class of 2017 were twice as likely to spend loan money on non-educational expenses as those in the Class of 2016.
But remember: Any money you borrow today will have to be paid back in the future — with interest. So even if you spend just $10 of your student loan money on a pizza, you could end up paying a lot more back to your lender.
As long as you don’t use student loans on non-essentials, you can avoid borrowing too much and ending up with a burdensome amount of debt after you graduate.
Your student ID could be your ticket to major savings. Many stores and restaurants offer discounts of 10% or more to college students.
So before buying a new computer or going out to eat, do some research on which companies could cut you a deal. By hunting for savings, you can avoid overspending while you’re in school.
Even if you have a meal plan, you might be tempted to go out to eat or hit up a bar with your new classmates. While it’s fine to set some money aside in your college budget for restaurants, bars and clubs, frequent nights out on the town could burn a major hole in your pocket.
Between marked-up prices, gratuities and tax, pricey meals and drinks can cause you to spend way beyond your means. Plus, you might overspend on other charges, like cab rides, cover charges and tips.
If you want to reduce your spending, cut down on going out for food and drinks and instead use your college meal plan or cook and hang out at home.
At college, you might find yourself surrounded by wealthy peers who don’t have to worry about keeping their spending in check. As a result, you feel tempted to keep up with their expensive lifestyle.
Plus, you might feel “FOMO” (fear of missing out) from others’ carefully curated Instagram feeds showing off pricey spring break trips or fancy dinners out. But everyone’s financial situation is different, and social media doesn’t always reflect reality.
Spending beyond your means to keep up could hurt your finances and leave you with major student debt that’s difficult to manage. So figure out what works for you and your finances, and avoid the trap of comparing yourself to others, whether in-person or online.
At college, you’re learning to live on your own and manage your money. Although this process might take some trial and error, there are steps you can take to curb spending. Whether you seek out preowned textbooks or student discounts, you can find ways to save money at college.
And above all, make sure you’re using student loan money on educational expenses, and not on spring break trips to Cancun. Although overspending might give you immediate gratification, it could leave you struggling to catch up after you graduate.