Controlling Spending Habits

While there are a ton of finance blogs out there, some of them actually pretty good, I think some college student specific advice can be very helpful. Assuming you followed all my tips you have probably saved a lot of money that is either in your pocket or helping relieve the bills associated with paying for school.

Now, the first tip I will give follows the assumption that you are a student who lives solely on financial aid, loans, scholarships, whatever. If you are a freshman chances are you live on campus and have a meal plan as well. This means that for freshman you probably have almost no refund coming to you.

Refund: This is the excess of a students financial aid that is given back to them to cover parts of their budget themselves, like buying their books or paying their own rent if they live on campus.


Since most everything is already paid for if you are a freshman under the situation I laid out, it's a lot easier to go broke but also not nearly as damaging since you won't be late on rent or go hungry. Still, I would suggest doing something quite radical, and I suggest this to every person I know.

Don't Spend Any Money On Any Non-Essential Goods

For you the freshman this basically means don't spend any money, period. Everything is already covered for you so save up that money for a rainy day or to pay back your parents or your loans, if you have any. For everyone else it's a great way to save money and control consumerist habits.

Now if you are a student who still lives solely on financial aid but has decided to get their own apartment and buy their groceries, things become complicated. A refund that was previously maybe only hundreds of dollars is now thousands of dollars and your primary if not only source of income for the next 4 months of the semester. What to do?

Pay Bills In Advance and Budget Into The Future

This means write your landlord a check for the rent for the entire semester up until the next refund. This will insure that even if you don't listen to my other tips and go broke, at least you have somewhere to live. Then you should budget out your monthly utilities bill and calculate it for the semester.

Once you have that number, take that amount in money it somewhere you can't touch it for any other purpose. Use the envelope system or something very much like it.

Do this for every major bill as well. Try to pay off your car insurance in advance and even your cable/internet provider. If you can't pay them up front, put it away in the envelope.

For groceries, once again draw up a budget and put away a semester's worth of grocery money where you can't touch it.

At the end of this your refund should contain almost nothing or very little spending money because you have all your bills covered, you can even budget your gas expenses.

Now this is a failsafe device and a good saving tool. You should put all that money away and just not spend anything like I recommended earlier. But if you can't do that, you can now rest easy because if you go totally broke, you will still have paid your bills, transporation, and have food money so you don't die.

I like to call this style of spending basically forcing yourself to be broke. I've been broke before and it basically left me with no option: I can't spend anymore money on anything I don't need. Now my paychecks can only go towards food and bills. The one thing I realized when I was broke is that my spending habits were never better, and this is the way I should always be living. Therefore if you separate yourself with as much of your money as you can, you save yourself FROM yourself. Forcing yourself to be broke insures you won't spend money stupidly.

The only exception to what I see as a brilliant idea is the introduction of credit cards. Let me start off the bat by saying that I have a lot of things I could say about credit cards but this is not about politics. I would just suggest watching the documentary 'Affluenza' on that matter.

What I will say is that there are two ways to think about credit cards if you are in college:

1) Don't use them, ever. If you have a card card, cut it up or keep it where you can only touch it in emergency circumstances

2) Use a cash backrewards card for every purchase you have to make and than pay off the balance that same day through your checking account. Don't use credit for anything you would not use cash on and never let the balance sit there. This has a three-fold effect of improving your credit, teaching you good credit card skills, and also making you money.

Credit cards that offer cash back rewards can end up making you from a few bucks to hundreds of dollars a year depending on how much you spend. Me personally I use the Chase Freedom card and the only thing I can't use my card on is my Rent, meaning that I can MAKE about 130 dollars a year at my current spending habits.

Now, that is only counting how much I need to spend on bills and groceries. Therefore, I have to stress, this method only works if you don't allow yourself to buy frivolous crap but rather buy food and pay your bills ONLY and immediately pay the funds back with your debit card.

If you cannot trust yourself you are better off following the first suggestion.