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College is an exciting time in your life. It may be one of the first times you’re away from home, living on your own and taking a crack at being an adult. 

Unfortunately, one of the downsides of adulting is managing your finances. You’ve probably come to terms with it now that you’ve applied for student loans and scholarships. 

But tuition is far from the only expense you’ll face as you earn a degree. You’ll have to balance a growing budget that includes rent and groceries. Then there are all those stressful expenses you forget exist, like a doctor’s bill after you visit the walk-in clinic. 

An emergency fund can help you handle these surprise expenses without missing sleep. 

What is an Emergency Fund?

An emergency fund is a special stash of cash set aside for urgent purchases and unexpected expenses. These savings act as a safety net when things go wrong, and you don’t have the cash on hand to deal with them. 

It’s not for expenses you know are coming, like textbooks or tuition. Instead, it’s for unexpected emergencies, like replacing a stolen laptop you need for remote learning or taking your car into the shop after it breaks down suddenly.

After graduation, financial advisors recommend saving as much as three to six months of your living expenses in this fund. 

That’s a lofty goal for a student, so don’t stress yourself out chasing it.

Try saving $100 at first. This will give you a solid head start. And, if you make regular contributions to this fund, it will grow steadily over time. 

What if Your Emergency Fund Falls Short?

If a costly expense arrives before you can squirrel away a robust fund, you wouldn’t be alone. According to the Federal Reserve, 40 percent of Americans have $400 or less in their savings accounts. 

Without this fund, you still have several options:

  • Borrow from the Bank of Mom and Dad
  • Charge it to your student credit card
  • Apply for an online loan

This last option may be a convenient choice if your parents aren’t an option, and you’ve already maxed out your student credit card. 

Online loans may be easier to apply for than a traditional bank loan. While banks often have strict standards for credit scores, online loan lenders look at other factors to determine your creditworthiness. 

This comes in handy if you have less-than-perfect credit. No matter where you credit rests, always shop around to find an online solution that best fits your needs — whether that’s an installment loan or line of credit.

Think Carefully Before You Borrow

For a lot of students, borrowing money is the name of the game. According to the Institute for College Access & Success, the average student ends up graduating with nearly $30,000 in debt. 

You probably had to take out a student loan to cover the cost of attendance, and you may even rely on your credit card to cover other essential expenses. What’s one more online loan going to do? 

Using any kind of loan (student, online, or otherwise) when savings would work just as well may not be a bright idea. It can make managing your finances after you graduate more challenging. 

Why make your first forays into the “real world” any harder than they have to be?

How Do You Save More Money?

The value of savings may be obvious. What’s a little harder to pin down is how you can save on a student’s budget. 

While it’s true, you won’t have the same opportunities to save as someone earning $60k a year, there are still chances to squirrel away a few dollars here and there. 

Anticipate Your Costs

An unexpected emergency is as its name suggests: unforeseen. You won’t know when an emergency bill will arrive or how much it will cost. 

But you aren’t totally defenseless. 

By sitting down and looking at your budget, you can get a good idea of what could be in store judging by your spending habits. 

Consider it the opposite of wishful thinking. This worst-case scenario brainstorming session may help you identify possible issues. Take your car, for example. If you drive a beater, you can probably expect to sink a little more money into its maintenance than if you were driving a car off the lot. 

Leverage Windfalls 

Did grandma send you a check in the mail on your birthday? Did you receive a small bursary from your college? What about a tax refund? Any of these windfalls can help you establish a modest emergency fund. 

Take this as a reminder to research smaller scholarships and bursaries that usually go unclaimed. The effort of applying will pay off if you win one or two. 

Apply for a Part-Time Job

If you have time to spare in your week, consider picking up a part-time job or online hustle. Earning a regular paycheck makes it easier to contribute consistently, especially if you automate your deposits. Plus, it may take some of the pressure of other parts of your budget. 

Mind Your Expenses

If injecting more cash into your budget isn’t possible, consider how you can reduce your spending. Eliminating unnecessary spending is one way to free up more cash for savings. 

Take a look at your streaming subscriptions; can you cancel this or split the cost with friends? What about takeout? If you order pizza every time you hit the books, consider making a homemade version instead. 

Don’t be afraid to eye your fixed expenses with a critical eye, too. You may be able to spend less overall on groceries by following cookbooks designed for people on a limited income. You may be able to save on rent by moving farther away from campus and living with more roommates. 

Stick with It

Building an emergency fund in college won’t be easy, but neither is maintaining a 3.0 GPA to keep your scholarship; both take work. In between studying hard, you’ll need to spend some time with your budget and commit to positive spending habits to help you reach this goal. 

Once you do, don’t stop saving. The larger your emergency fund is, the more effective it is protecting you from urgent expenses.  

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