For a college student, paying upward of $4,560 for a year at BYU can be a challenge, and it’s even harder when trying to save while in school.
Fortunately for students, there are many resources available to help find the best ways to save. According to the experts, there are five ways students can best save for school: apply for financial aid, pay yourself first, let your money work for you, track your expenses and pick the right institution.
Apply for Financial Aid
BYU Financial Services offers thousands of dollars in scholarships to students who qualify. However, Paul Conrad, Outreach and Financial Education manager with the BYU Financial Aid Office, said it’s important to watch application deadlines, as they can change.
“I always encourage students to apply and be aware of deadlines,” Conrad said. “You can always respectfully decline a scholarship if you decide not to attend.”
There are many different kinds of scholarships. Aside from BYU’s Academic Scholarships, individual departments offer scholarships to students in their programs.
Off-campus scholarships are also available. These are more frequently available and are somewhat less competitive. For example, websites like fastwebscholarships.com allow students to create a profile and receive emails whenever a scholarship is added they might qualify for.
Grants and loans are options too. Just because some financial aid needs to be paid back, doesn’t mean it’s not a credible resource to students.
Pay Yourself First
Kevin Banks, marketing manager for Utah Community Credit Union, said the best first step to saving money is to pay yourself first — after paying the Lord, of course.
“The golden rule of savings is paying yourself first,” Banks said. “Once your direct deposit hits, you should set up an automatic transfer to a different account like an auxiliary savings or money market.”
Transferring a portion of each paycheck to a separate account ensures that money is out of the way and forgotten until it’s needed. According to Banks, one of the many benefits of this savings method is there are no overdraft fees and no temptations to access money that needs to be saved rather than spent.
Let Your Money Work for You
Students work hard for their money, but many don’t know how to make their money work for them. Local credit unions and banks offer several services that are safer than stocks and earn interest over time.
One of the best examples of this is a certificate of deposit, or CD. In a CD, the account holder deposits a certain amount of money and contracts to leave it in the account, untouched, for a certain period of time. CDs are usually associated with a fixed interest rate, earning account holders money on top of the amount originally deposited.
While this is a good savings option, Banks said interest rates are low across the board and it’s therefore not the best option for students.
“Rates are slow across the whole financial spectrum,” Banks said. “It’s a good time to borrow but not a good time to save right now.”
Track Your Expenses
Tracking monthly expenses can be tedious for some, but Conrad said it is a great way to help save money for future spending.
“Tracking your spending is kind of like looking in the rear-view mirror,” Conrad said. “The purpose is so you can be aware of where your money is going and use that information to make a spending plan.”
Both Banks and Conrad agreed that, often, people don’t realize how much they spend on things like eating out. By looking back and finding ways to spend less in the future, students can develop good financial habits and avoid debt in the future.
“That’s the fun of it, to say, ‘can I still do the things I enjoy doing at a lower cost?'” Conrad said.
Banks also suggested easy ways to track your spending on the go, including mobile banking, text banking and even mobile deposits, which he said Utah Community Credit Union will begin offering within upcoming months.
Pick the Right Institution
One of the most important ways to save is to pick the right institution.
“Since September, a lot of institutions have implemented a lot of fees into their checking accounts,” Banks said. “If you don’t monitor that, you’ll fall out of their qualifications and you’ll be charged extra fees.”
Conrad added any account that requires interest payments should be avoided because that money could be used for food, clothes, entertainment, etc.
Overall, experts suggest students find a checking account that’s free and go with someone they trust.
While these are only a few suggestions among many ways to save, Conrad emphasized the most important goal isn’t to get ahead financially, but to stay out of debt.
“It’s pretty hard to get ahead sometimes,” Conrad said. “It’s hard to save and set aside money and come out of college with a lot of extra savings. The real name of the game is to try to avoid debt and get through school so that when you do graduate, then your positioned to make progress financially.”