Budgeting, Investing, and Saving Money as a College Student

American philosopher Biggie Smalls once wrote "It's like the more money we come across, the more problems we see." 

Unfortunately, Biggie Smalls is in no way qualified to give the American public any advice about what to do with their finances. As a college student, this can be a disturbing revelation. I too remember feeling betrayed by Biggie when I got my first bill from Concordia. In that moment, mo' money certainly seemed like it would have solved the majority of my problems. 

Much like Mr. Smalls, I am also unqualified to give people financial advice, but as a business major, I have the general appearance of someone who would. Over the years, I've gotten a pretty good grasp of how to handle my own finances, and I've also learned how important it is for other students to do the same. 

"But Aubrey, that sounds like a stressful and tedious activity."  

Great observation! I would have to agree. However, being aware of your financial situation now is ultimately much less stressful than realizing that you've run out of money before graduation, so I would highly recommend taking control of your finances as soon as possible. 

"But Aubrey, how do I do that?"

Silly goose, I was just about to tell you that! 

Step 1: Make a personal budget  

For most people, this will probably be the most stressful part of this process. There are a lot of different components to consider, and your financial situation can change on a pretty regular basis. As much as I would love to give you a “one size fits all” budgeting template, that’s simply not realistic because of how unique every student’s financial situation is. I can, however, give you a list of the biggest things to consider while you’re budgeting. 

• Savings, income, and tuition: this is the bread and butter of your budget, otherwise referred to as the Brutterget™. Consider how much you have in savings, how much you make in a year, and how much you expect you’ll be paying for school each year, then multiply that number by four to get an idea of your overall financial position.   
• Family contributions: sometimes Grandma Betty is more than happy to pay for some of your tuition; sometimes Grandma Betty spends all her money on an annual cruise. In either case, it’s important that you respect Grandma’s financial decisions, and that you apply her contributions (or lack thereof) to your budget. 
• Miscellaneous spending: one of the biggest mistakes I made my freshman year was not accounting for any additional spending. Between Walmart runs, Christmas gifts, and coffee dates, I had a huge difference between my expected and actual expenses. Even though it seems like a big number, I would recommend allocating at least $1000 in miscellaneous spending for each school year. 
• Alternative revenue streams: If you know that Grandma Betty is going to cut you a big check on your birthday each year, take note of that in your budget, then tell Grandma thank you. Same goes for your babysitting job, side hustle, or your yearly tax return. They may not amount to much but including them will give you the most accurate idea of your financial position. 

Step 2. Schedule your loans 

If all of your earthly possessions and your check from grandma aren’t enough to pay the bills on their own, you will probably have to apply for a grant or a loan. 

"What's the difference between a grant and a loan, Aubrey?" 

Great question, you're on fire today. Grants are lump sums of cash that are awarded to students with no obligation to repay. Unfortunately, you may not be eligible for grants depending on your family's financial situation (among other criteria).   

A loan is like a grant’s uglier little brother. You will also get a lump sum of cash, but you will be obligated to repay it with interest. Student loans can also come from a variety of different sources, such as banks, the government, or other private financial institutions. You will need to fill out the FAFSA to determine your eligibility for federal aid and may even need to look for aid from private institutions if grants and federal loans will not cover your tuition. 

Your budget will give you a clear idea of how much additional aid you will need. If you don’t want to take out more than the federal loan, you may need to start taking out loans right away, even if you have the money to pay for it at the time. 

Step 3. Use your resources to maximize your personal revenue 

Uh-oh. That step uses some bigger words. Don't worry, it's not actually that bad! Here are some ways you can make extra money in college: 

• Get a job: this is perhaps the most obvious option, so I won’t talk about it too much. However, one thing I will emphasize is that you want to make sure you can handle having a job before you get one. If you have to choose between your grades and debt, prioritize your grades –it will serve you better in the long run. 
• Make some investments with higher returns: this is probably the best thing that you can do for yourself as a college student. If you know that you have some extra money put aside, don’t just let it sit in your savings account. Certain investments like CDs or T bonds can offer 4-5% yields at no risk, which greatly exceeds the 0.01% interest rate you’ll typically receive in a savings account. If you know that you won’t need to take out a loan in your college career, it would serve you well to invest in your retirement using a Roth IRA (it’s never too early to start!) 
• Sell the stuff you're not using anymore: Facebook marketplace, Poshmark, and other reselling sites are simple ways to get rid of old stuff and make cash along the way. 
• Sign up for some survey websites: Admittedly, this isn't the best return on your investment, but if you have a couple of spare minutes in your day, you can easily make a couple hundred dollars off of survey websites like Prolific or Survey Junkie. 

Step 4. Don't be afraid to take some risks 

Statistically, the majority of undergraduate students will graduate with student debt, so don't be afraid to join the ranks. College is ultimately just an investment in yourself, and if you play your cards right, there will be a substantial return on your investment. Keep the big picture in mind. If attending your dream school or pursuing your dream career means going into some debt, take that risk! Just be sure that you have a good grasp of your finances so you know exactly how much of a risk you're taking ;) 

Aubrey is a senior business major at Concordia. She is on the dance team, she sings in the A Capella choir, and she is a shift manager at 10:31, Concordia's on campus coffee shop. In her free time, she enjoys crocheting, doing puzzles, and going for walks.