It’s over. Let’s not kid ourselves. There’s no way you’re affording college; (Tuition? No way. Room and board? That’s rich. Don’t even get me started on books…….And what the hell is a student success fee?”). The average annual in-state tuition in California is about $14k, and that doesn’t cover room & board or books, not to mention a variety of other secondary costs. For those of you who feel like you could use a little help, or more like a lot, here are some tips to help you save:
Put unused loan money in Certificate of Deposits
You’ll find that once you get your student loans, you’ll have access to an amount of money much larger than what you’ve ever had previously. 99% of students make the mistake of either spending it or just letting that money sit there. This solves both those issues. As mentioned in previous Money Masters iterations, a CD is a commodity where your money is locked up for a predetermined amount of time, and earns compound interest on a juicy compound interest rate along the way. With 4-year CD rates around 2% right now, you’re effectively cutting your loans in half if you have the discipline.
Segmenting your paycheck
I guess the first part of this is getting a job, but that’s less advice and more a necessity. Similar with student loans, a lot of us have difficulty resisting the urge to spend that hefty $10.50 an hour before taxes. But segmenting your paycheck can aid in this by providing organizational structure. For example, you can allocate 25% for loans, 25% for spending, and 50% for operating costs. If you have a bank account you can do this automatically, but if you don’t you can just grab a couple envelopes and a sharpie (although let’s be honest you’re accessing the stash at least once).
Be an entrepreneur
You don’t need to start the next Facebook, but the entrepreneurial spirit will always keep you out of debt. Simple things like buying cases of sodas and snacks from Costco and selling them for a 150% markup can start you off solid. Utilize any special skills you have like dancing and become a freelance instructor. Regardless of ways and means, getting in the habit of making money early on will set you up nicely down the road.