Money Saving Tips for College Students (2024)

FAQs

What is the 50 30 20 rule? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

Save money on housing

Outside of tuition, housing is often college students' biggest expense, clocking in at about $11,000 and $13,000 a year, depending on whether you live on or off campus. Research costs both on campus and in surrounding neighborhoods to figure out the best living option for you.

Fidelity suggests 1x your income

So the average 30-year-old should have $50,000 to $60,000 saved by Fidelity's standards. Assuming that your income stays at $50,000 over time, here are financial milestones by decade. These goals aren't set in stone. Other financial planners suggest slightly different targets.

making $4,000 a month using the 75 10 15 method. 75% goes towards your needs, so use $3,000 towards housing bills, transport, and groceries. 10% goes towards want. So $400 to spend on dining out, entertainment, and hobbies.

Most families plan to save about a third of future college costs for each child. On average, however, families save only about 10% of college costs when the child turns 18, falling short of the goal.

Make sure you allocate enough money for necessities such as food and rent, and then prioritize your other expenses accordingly. Consider using the 50/30/20 rule, where 50% of your income goes to necessities, 30% goes to discretionary spending, and 20% goes to saving and debt repayment.

50% of your income goes toward needs, like rent, transportation and health care. 30% of your income goes toward wants, like dining out, streaming services and travel. 20% of your income goes toward savings and paying off debt, like an emergency fund, credit card bills and student loan payments.

How much to save per month for college? ›

For a private non-profit college, you'll have to invest $600 a month. If your investments yield a 6% rate of return each year, you'll earn roughly enough money to cover 1/3 of your child's total college costs once they're 18. While this may seem like a lot, investing any amount of money each month is a good idea.

If your savings are currently a bit anemic, aim for enough money to cover three to six months of expenses. To put a number to that goal, add up all your regular expenses and multiply the total by at least three. Hopefully, you'll never need to dip into those funds, but if you do, they'll be waiting for you.

Applying the 50/30/20 rule would give them a monthly budget of: 50% for mandatory expenses = $2,500. 20% to savings and debt repayment = $1,000. 30% for wants and discretionary spending = $1,500.

However, the key difference is it moves 10% from the "savings" bucket to the "needs" bucket. "People may be unable to use the 50/30/20 budget right now because their needs are more than 50% of their income," Kendall Meade, a certified financial planner at SoFi, said in an email.

It may not work for everyone. Depending on your income and expenses, the 50/30/20 rule may not be realistic for your individual financial situation. You may need to allocate a higher percentage to necessities or a lower percentage to wants in order to make ends meet. It doesn't account for irregular expenses.

The 50/30/20 has worked for some people — especially in past years when the cost of living was lower — but it's especially unfeasible for low-income Americans and people who live in expensive cities like San Francisco or New York. There, it's next to impossible to find a rent or mortgage at half your take-home salary.