Not long ago, JD over at GetRichSlowly mentioned that he had been asked how you’re supposed to spend less than you earn when you’re in college and not earning anything. This is a great question, and one that I thought I’d take a shot at myself.
While it’s not mathematically possible to spend less than you earn when you’re not making any money, there are still a number of things you can do to keep yourself from sliding too far into oblivion…
Apply for scholarships
While it’s too late for most struggling students to take full advantage of this advice, anyone finishing up high school and heading to college should consider all possible alternatives when it comes to applying for scholarships. Even if it’s “only” a few hundred (or few thousand) dollars, that translates into less debt at the end.
Consider getting a part-time job
I know, I know. This is probably the last thing that a lot of students want to hear, but… Increasing the income side of the equation is a great way to help balance the books. Even if you can only make a small dent in your expenses, you’ll graduate with less debt and, if you’re fortunate enough to land a job in a related field, you might even pick up some useful work experience.
Minimize your expenses
There are two sides to every coin. We’ve already addressed the income side, but what about outgo? Yes, you’re likely in the hole financially, but that doesn’t mean you should throw in the towel and just keep on spending. You know the drill… Carefully consider your spending decisions, distinguish between wants and needs, and cut costs wherever possible.
Admittedly, picking up a part-time job and cutting your expenses often won’t enough to balance your budget while in college. Rather, a great many students will go into debt while they’re in school. This isn’t necessarily a bad thing, as education is an investment that typically pays generous future dividends. So…
When debt is unavoidable, be smart about it. Stay away from high interest consumer debt (credit cards). Instead, try to limit your borrowing to student loans, which typically offer an interest deferral while you remain a student as well as possible tax breaks when you’re paying them back.
The bottom line… Just because you can’t actually spend less than you earn doesn’t mean that you shouldn’t narrow the gap as much as possible. All too often, debt becomes a slippery slope. Since you can’t afford to stay out of it in the first place, what’s the harm of taking on just a bit more? Avoid that sort of thinking and you’ll have a far richer existence once you graduate and get a “real” job.