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8 ways to avoid cards, live frugally as a college student

Dawn Papandrea

May 21, 2015

It's tempting to fall back on credit cards when you're a poor college student, but you're only setting yourself up for a tougher time when you graduate (and, likely, with student loans to pay).

Here's a crash course on how to save money, live frugally, and generate income while in college. Ready to take notes?

1. Treat college as a prerequisite to real life

Learning to budget in college might sound like a drag, but it will prepare you for what's to come after graduation, says Angela Mazzolini, accredited financial counselor and program director for Red to Black at Texas Tech University, which is a peer-to-peer financial coaching program on campus. “Hopefully, in the school environment, students can make some money mistakes and it [won't] affect the rest of their life. But practicing the skills can help in the future when they will have more money and more expenses,” she says.

2. Look at your spending syllabus

Determining how much money you'll need each month requires a bit of work on your part, but you can start by analyzing the school's cost of attendance breakdown — which includes tuition, fees, books, transportation and living expenses. Of course, this is the school's estimate, which may differ from your reality, so here's where your part comes in.

Mazzolini recommends tracking expenses for at least a month to get a good picture of where your money is going. You could use an app such as Mint, old-fashioned paper and pencil receipt tallying or track all of your spending via your debit card statements, she says.

Keep in mind that the school's estimate of your living expenses will not include things such as your cell phone, entertainment, food you order or clothing, says Mazzolini, so you'll have to add those line items to your budget. Before college, those might have been things that mom and dad would regularly foot the bill for, so it's important to have a conversation with them about how those expenses will be paid for once you're not living under their roof, says Mazzolini.

Once you crunch those numbers, the real work of living on a budget begins.

3. Pump up your frugal GPA

There's a good chance that you could improve your spending grade with just a few lifestyle tweaks, says Diane Austin, vice president for student affairs at Lasell College in Massachusetts. That includes looking for free or low-cost entertainment options, taking advantage of student discounts or even channeling your mom by using coupons. Also, stop bleeding your budget dry on convenience items.

“Freshman year can be a struggle, but try not to drop any classes. If you're having a problem, go talk to your teacher.”
–Jodi Okun, College Financial Aid Advisors

“Many colleges have water stations where you can fill reusable water bottles for free, for example. And buy non-perishable snacks for the room, in bulk; purchased this way, they are much less expensive than when purchased in snack machines in residence halls,” Austin says.

Another strategy is to spend less than the estimated amounts on that cost of attendance statement. For instance, you don't necessarily have to shell out as much on textbooks as the school estimated, says Jodi Okun, founder of College Financial Aid Advisors and brand spokesperson for Discover Student Loans. “You can rent or share textbooks, or use online textbooks. You can often cut the advertised costs in half by looking into other resources,” she says.

4. Be a working student

A great way to minimize the effect of college expenses is to generate some income. Whether you take on an on-campus job, sell your study notes online, or become a dog walker or a nanny, there are lots of ways to find work as a college student. “I see flyers up around the college all the time for part-time work,” says Mazzolini.

Plus, adds Okun, having work experience to put on your resume will help when it comes time to find full-time work.

5. Study hard to save thousands

The most effective way to really save on college is to make sure you graduate on time. “Freshman year can be a struggle, but try not to drop any classes,” says Okun. “If you're having a problem, go talk to your teacher.”

Better still, if you are academically capable of doing so, enroll in the maximum number of courses that you are permitted to take within a semester's normal tuition costs, says Austin. “Doing so, in one's sophomore and junior years, can position one to graduate a semester early, saving quite a bit of money,” she says. You could also look into taking one or two courses in the summer at a local public institution (just make sure the credits will transfer) to speed up your road to graduation.

6. Ace 'Intro to Student Loans 101'

Although you might not want to think about student loans until after you graduate, that's the wrong approach, says Okun. Before you even apply to college, you should understand things such as interest rates, origination costs and repayment terms. “There are a lot of different calculators to figure out what your payments are going to be,” she says. Bankrate's student loan calculator, for example, will help put numbers in perspective.

Keep in mind, private loans are typically taken to cover the costs that federal financial aid and federal loans don't cover. “When you have a gap amount, there are probably five different ways to pay it. The idea is to only borrow what you need. Don't take more, even if you are approved for more,” says Okun.

She recommends not borrowing more than your expected annual salary. So if your intended career field typically pays $45,000 to entry-level employees, try to keep your total loan amount below that.

If you can swing it, make the interest payments on your student loans while you're still in school, even though you're technically not required to do so. “If you do have that extra $25 or whatever small amount it is, get in the habit of making those payments,” says Okun. Doing so will keep your loans from ballooning due to compounding interest charges.

7. Take advantage of office hours

If you find yourself struggling with your finances, there are usually campus resources to help you. While not every school has an extensive program such as Texas Tech's Red to Black, you can most likely find on-campus workshops or free seminars to help with budgeting and other money matters.

You can also go to the financial aid office, says Mazzolini. “They definitely want to help students succeed, and they are not just there for loans and scholarships,” she says. Ultimately, the school doesn't want its students to default on their student loans, so they are motivated to make sure students develop good financial habits.

8. Earn some extra credit

As far as credit cards go, the only real reason to have one in college is to start building your credit history, says Mazzolini. “They are good to have in case of emergency, but have a clear definition of what an emergency is. A pair of shoes going on sale is not,” she says.

She suggests using your credit card for one category of expenses, such as gas or groceries, and then making sure the bill is paid in full every month. That's the most effective way to begin building your credit, says Mazzolini.

Secured cards are a good first choice: You pay a deposit, usually for the amount of your limit. You can also be an authorized user on a parent's card, provided that he or she has good payment habits. Whichever you choose, make sure the issuer reports your payment activity to the three major credit bureaus.

Moving from an environment in which mom and dad took care of all the finances to one in which you're financially independent can be a tough transition. But with proper planning from the start, you can graduate with a minor in money management.