Published in: Student Loans | Oct. 13, 2019

How to Make Your Money Last All Semester Long

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When you're a college student, you can't afford to run out of cash midway through the year. Here's how you can make sure your funds last. 

If you're a college student living on student loans, chances are good that you'll get a big lump sum of money at the beginning of the semester when your loan funds are distributed. 

The problem is that this money is meant to last for months. And sometimes it can be hard to figure out how to make sure you don't run out before the semester comes to an end and you have to wait until the next one to get more cash. 

You can't afford to run out of funds in the middle of the school year -- and fortunately, you don't have to. You can just follow these simple tips for making sure that your cash lasts. 

A college student studying in a library.

Image source: Getty Images

1. Figure out how much cash is available to spend each month

When you get your money as a lump sum, it can feel as if you're flush with cash and will have plenty to live on. But you need to remember that this money must cover months of living expenses. So sit down and calculate exactly how much you're going to have available either each week or each month. This will give you a clearer idea of what you can actually afford to spend.

If you've got a $5,000 deposit, for example, and this money needs to last you for four months, then you actually have only $1,250 a month available. Once you've done this calculation, you'll be able to move forward with the next step in the budgeting process. 

2. Make a budget that covers your spending

After you know how much money is available to you for each week or each month, it's time to make your budget. This means allocating every dollar that you've got in the bank to purchases that you'll need to make. 

If you're living on campus and room and board is covered, making your budget will be easier because you'll know you can spend all the money you have on discretionary expenses. But if you're responsible for paying your own rent, buying your own food, and paying for transportation to school, you need to make sure that you're able to cover these essential expenses first.

Don't forget to budget for textbooks and other costs that you may need to pay for to further your academic or professional career, such as extra tutoring or clothing for job interviews. 

And make sure to put aside a set amount each month for things like entertainment and dining out. While you don't want to waste too much money on these unnecessary expenses, chances are good that you’re going to do these things -- so work them into your budget. 

If you have the spare cash, you may also want to budget to make interest payments on your unsubsidized student loans. While this can be unaffordable for many college students, the payoff can be great as it will prevent your balance from growing before graduation. If you can make it happen, you can avoid accruing all the interest that would eventually be added to your principal balance over the course of several years. 

3. Avoid frivolous purchases you don't need

College is expensive, which is why so many people end up borrowing money for it. But every dollar you take out from your student loan funds now is money that has to be paid back later. You don't want to borrow for things you don't really need, get stuck paying interest on the loan, and end up having to spend years paying back the debt you've taken on.

Frivolous expenses are also much more likely to lead to your money running out ahead of schedule, which could put you in a difficult position.

So while it's OK to allocate some money for having fun in college, you should make sure you're not devoting too much of your cash to unnecessary spending. In particular, it's best to avoid borrowing to cover big-ticket items such as spring break trips. 

You should also be careful to avoid overspending in situations where you know your self-control might slip. If you tend to spend too much cash when you go to the bars with your friends, for example, then just take a small amount of money with you that you've budgeted for entertainment. When that cash is gone, you'll know you're done for the evening. 

4. Look for ways to cut costs

Being mindful about the money you spend is also important so that every dollar stretches further. This means looking for bargains whenever you can.

As a college student who probably has more spare time than money, now is an ideal time to search for coupons for food items and other purchases you have to make. Using coupons can save you a surprising amount and make your money last longer. 

You can also take advantage of opportunities to get free food by attending events -- there are usually lots of them on college campuses. And consider shopping for gently used textbooks or renting them instead of buying them, as books often eat up a big portion of any college student's budget. 

5. Steer clear of credit card debt

When you're trying to make your money last, one of the worst things you can do is to end up in credit card debt. 

If you borrow on a credit card, chances are good that you'll have to pay a very high interest rate, which will make every purchase much more expensive. The interest charges alone can eat up a big portion of your budget, not to mention the fact that you'll have to pay back the principal to become debt-free. 

You don't want to commit future dollars to credit card debt and have less money to live on later. So borrow only if you can afford to pay the full amount back when the statement comes and keep careful track of what you're using your cards to buy.

It can make sense to put some purchases on a credit card to earn points or cash back if you are 100% sure you won't go over budget -- but if you don't trust yourself to spend responsibly, getting a card in college is simply not worth the risk.

Now you know how you can make your money last 

If you take these five basic steps, you shouldn't need to worry about your student loan funds running out before you get your next influx of money. You can also hopefully avoid going further into debt which could make it harder to stay on budget in the future.

Developing these good money habits now will not only help ensure your college experience is one that's free of financial worries, but it can also help prepare you to budget successfully and pay down your student debt well after graduation.

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