“I’m so broke” has been the universal college student’s tagline since the beginning of time. It can be hard to manage a full course load, extracurriculars, and a social life, not to mention a budget on top of that. And sometimes, even with a budget, you may find yourself scraping for pennies or checking your bank account and wondering just where all your money went. But I’ll tell you where it went—on your plastic. Cards make it so easy to spend on a college campus and, with a credit card, even easier to spend money you don’t have. Since you don’t see the cash, it is so quick and simple to swipe away when eating out or shopping. But if you’re not careful, you may end up swiping away all your savings.
Here are 4 fixes to plastic-swiping that will help you keep your cash!
1. Leave the card at home!
Being able to carry all your money on you (or the possibility of spending more money than you currently have with a credit card), it’s easy for your money to slip between your fingers. Don’t have a $5 bill to pay for that Starbuck’s frappe on you? No problem, just pull out your debit card. Are those new kicks just a bit out of your price range? Just use your credit card! You can buy them now and pay later. The advent of plastic has made it so simple for people to spend because it’s just a piece of plastic representing your money. Since you don’t see the money or actually pass it to the cashier, the disassociation causes you to be more likely to spend. Ever had to break a $20 to buy something that was just one or two dollars? Exactly. If you leave your card at home and only carry cash, you’ll be less tempted to buy things. It’ll make you think twice about your purchases and having to part with your hard earned money.
2. Pay in cash
This is especially true at clubs or bars. When you pay for your drinks with a card, you open up a tab that you can easily continue charging on throughout the night. Before you know it, you may have rung up a huge tab by the end of the night. Next time you go out, make a little budget for yourself by bringing a set amount of cash. Set apart what you might have to pay for cover and what you will spend for drinks (and if you have mega late munchies, what you will spend at the drive-thru). By going out with a set amount of cash, you’re safe from spending unwanted money because you’ve already pre-planned what you’re going to spend. If you run out of cash, you run out while keeping your checking account balance high and your monthly payments low.
3. Don’t get a credit card or close your accounts
Getting a credit card in college is usually the first step to getting your second or third (or fifth) card. There’s always a new deal with credit cards for low interest, no interest if purchase is paid within a certain time, no monthly fee, and the list goes on. With those kinds of deals, the appeal of a credit card is great. Being able to afford something now, that you normally wouldn’t be able to, and then just pay it off in a couple of months? Too good to be true! And truth be told, it can be. Without good financial planning and strong willpower, that same type of thinking can push you into large debts that can take years to pay off or a huge chunk of your paycheck each month. So if you don’t have a credit card yet, don’t get one unless you are certain you can withhold from reckless spending and afford your monthly payments. This also applies to store credit cards. They’re huge money traps and can be more expensive in the long run than standalone credit cards. If you do have a card, or multiple ones, keep paying them and close as many as you can. If you must keep one, make sure you pay on time and don’t miss payments to keep your credit score intact.
4. Plan a realistic budget (and stick to it!)
The importance of having a budget in college cannot be stressed enough. Not only is it important to help you save money, but it also helps you keep track of your spending and build good financial habits you’ll need in the future. Setting a yearly budget, or a new one after each break you go back home, can be helpful, but with the spontaneity of college life, it may be better to set a monthly one. So before each month, draft a list of how much money you want, or can, spend. The first and most important things to be budgeted should be food and living expenses. After those have been accounted for, budget everything else as necessary. Your budget doesn’t even have to be fancy like an Excel spreadsheet; it can even just be a list you made on your phone. Along with making a budget, make sure you stick to it! Check your budget often and keep your receipts after you spend. Add the amounts from your different receipts and subtract from your budget. By looking at your budget and keeping track of how much you spend, you’ll be more likely to keep to your budget and save.
Follow these tips and you can be certain you’ll be the last person saying “I’m so broke!”