From skyrocketing tuition to textbook expenses, college students have seen the cost of higher education continue to rise, making the “American dream” harder to achieve. In-state tuition and fees at public national universities have grown about 56%, adjusted for inflation, over the last two decades, according to U.S. News and World Report.
Many families are looking for alternative solutions, such as sending their children to community college, where students are estimated to save $8,000 per year compared to a public four-year in-state college.
But for students currently attending college, traditional money-saving strategies such as loading up on AP or dual-enrollment courses are no longer an option. While becoming a resident assistant (RA) is a great way to save money on room and board costs, many Miami University students have expressed concerns about inadequate compensation and a higher workload than other universities.
So, how can current college students save (or even make) money while not having access to these traditional strategies?
1. Avoid credit card debt and take advantage of rewards
Building credit in college is a great way to kick-start your financial future and procure better loans after college. However, credit card debt can quickly weigh you down with high and compounding interest.
According to Forbes, the average annual percentage rate (APR), the interest on unpaid debt, of student credit cards for the week of Jan. 22 is about 27%, making credit card debt more of a burden.
If you use credit cards in college, pay the card in full every month. Doing this ensures that you won’t incur additional debt in interest and can get a better credit score.
While credit cards may be unwise for some, those who use them responsibly can reap many benefits through credit card rewards. Many student and secured cards offer rewards such as cash-back on restaurants and gas. Some companies, such as Discover, give cardholders a cash-back match at the end of their first year.
Cash-back can quickly add up and save you hundreds of dollars per year. Remember to spend only what you typically would on debit and ensure you meet the sign-up bonus requirements.
2. Invest extra money
If you have a chunk of cash sitting idly in your checking or savings account that you will not need in the next six months to a year, it may be wise to invest that money into a certificate of deposit (CD) or a major index fund.
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With a current annual inflation rate of 3.4%, the money in your checking account is losing value. Investing in CDs and low-risk index funds is a great way to ensure your savings aren’t losing value.
As of January, CDs can offer interest rates of up to 5.51% with little to no risk for the lender. Index funds, such as the S&P 500, average annual returns of up to 10% but with the risk of market volatility.
To mitigate the risk of market volatility, only invest money you will not need soon and hold your assets as long as possible.
3. Take advantage of student discounts
One of the benefits of being a college student is the numerous student discounts. Whether talking about subscription services or even mainstream brands, there are many ways for students to take advantage of these discounts.
Sites such as UNiDAYS and StudentBeans make it easy for students to find deals and save money. Apple Music and Spotify offer student subscriptions, and many other services, such as newspapers and video platforms, are free if you are a Miami student.
4. Delete Doordash and Uber Eats
In a late-night study crunch, delivering food may be convenient, but doing this too often may lead to financial disaster.
With services such as DoorDash and Uber Eats, you pay for the food, the driver, high delivery and service fees, and occasionally fees to the merchants. According to the New York Times, price markups can be as high as 25% to 91% for certain orders.
Not only do high fees hurt the consumer, but they also hurt local restaurants. According to CNN, delivery services charge restaurants up to 30% per order, leaving profits laser-thin or red.
A better alternative to delivery apps is to order pickup from the restaurants directly, avoiding high fees and saving money.