College Students' Spending Habits (How to Waste Money)

By Elana Goodwin on July 25, 2014

This article is brought to you by CORT, a subsidiary of Berkshire-Hathaway and the world’s largest furniture rental and relocation services company. To learn more about how we can help college students like you, click here.

You’ve had a long day of classes and don’t feel like cooking — so instead, you call up your favorite pizza place and order a large pie – so you’ll have leftovers — and throw in some wings, a salad and breadsticks.

Of course, they tack on a delivery fee so in one night, you end up spending nearly $30 on food that may last you a few meals but is much more costly than if you’d just cooked yourself. But hey — you didn’t have to cook it and you can just charge it to your credit card.

Habits like this are behind college students’ expenses and spending being much higher than they should be as students tend to waste a fair amount of money each week.

Photo Credit: Brittany Hardin/maysbusiness.tamu.edu

According to research by Nationwide, 40 percent of college students’ spending is discretionary — meaning it’s being spent on technology, entertainment, clothes, etc. which is high considering just 26 percent of their spending is on room and board, 19 percent is on their college tuition and the correlating fees, and another 12 percent is dedicated to other expenses.

One of the biggest money wasters college students spend an exorbitant amount of money on is coffee as well as other food items. If you indulge in, say Starbucks, every day, even if you’re only getting a tall regular coffee there, you’re still spending around $60 a month on coffee. And that’s not even taking into consideration what other drinks you may get, like Frappuccinos, Chai Teas, or Iced Coffees. Those are over $3 a drink, and that’s just for the smallest size.

Rather than shelling out money each day for coffee someone else makes, college students should buy some kind of coffeemaker and brew their own at home, indulging in a bought cup of Joe only rarely as it’s an expense you don’t really need to have on a limited budget (which most students are on).

The same applies to eating out at restaurants. Research shows that students spend more than $11 billion a year on snacks and beverages, as well as around $5.5 billion on alcohol annually.

Photo Credit: Nationwide

Another way to curb your spending habits is to get rid of your credit card or have one only for emergencies. This way, you have to pay cash for everything, which will help decrease the amount of purchases you’re making per week.

Many college students think of their credit cards as magical passes to free stuff. This is because they’re either charged to their parents’ accounts or because the students don’t feel the immediate hit of cash leaving their hands, and therefore chalk up the expense as not such a big deal.

“The problem with always whipping out plastic is that you are missing the tangible feeling that you get with cash,” says Dayana Yochim, Fool.com’s financial expert. “Think of credit cards as poker chips being used by people sitting at tables in Vegas. If they had to throw down cash instead, they’d be a lot more careful–the same thing applies to every day spending.”

Of course, students are spending too much by buying new textbooks, too. Oftentimes, students feel they need to buy their textbooks quickly and will go to the nearest book store to buy all the textbooks for their classes, many of them new.

This is a spending habit that students can easily change; more students should look into buying used textbooks, renting the books they need for the semester, or exploring ebook and digital options for the books they need.

Because you rarely use your textbooks for more than one semester and are unlikely to crack them open again after the class is over, buying new textbooks is a waste of money, even if you’re able to sell them (for less than you paid) after the semester’s over.

Finally, students are spending too much on entertainment. Movie tickets, concert tickets, football tickets, even cable TV all are costly expenses. Instead of spending money on movies and concerts, check out what campus events and entertainment your school offers, as many have bands come perform at the school and students can go free of charge and the same is true for movies as many universities have movie screenings on campus that are free.

Additionally rather than buying a football tickets bundle, look into only buying tickets to the games you’re sure you can go to or buy them off other students. With Netflix and other video streaming sites on your computer, you can also cut out cable costs by just watching TV on your computer.

Other expenses college students pay more than they should for include transportation, rent, school supplies, Spring Break trips, and furniture and decor for their apartments, dorms or houses. Many students also don’t take advantage of the numerous special deals offered to students, like getting a percentage off their purchase with their student ID.

Look into cutting some of these big money-wasting habits and you’ll be on your way to spending money more responsibly and saving a bundle of it too.

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