Money Saving Strategies for College Studentstax tips | August 31, 2017 | By Susannah McQuitty
Ever just get to the point where saving money for college and living on your own feels less like managing your expenses and more like throwing pebbles at a freight train? Yes, that’s weirdly specific. I’ve been there.
How about a few “little things” you can do to cut expenses, and then a few big-ticket items to make a dent in your school bill?
Little ways to save around campus
Make your own coffee. Yes, that paper cup and colored straw looks really nice on your social profiles, but it’s a huge money suck.
Get a coffee pot for your dorm and experiment with creamers, syrups, roasts and so on. You can drop about $40 at the beginning of the semester to get set up with all of the above, and then just keep buying the grounds (about $5 for 36 cups of joe).
Or, you know, you could get takeout coffee 3 times a week for a 16-week semester and pay around $144. And that’s if you don’t tip.
Eat café food (as much as you can stomach). Probably not exactly the advice you wanted to hear, but listen: Most cafeteria plans are pre-paid at the beginning of the semester, so you’re not just losing money if you eat out. You’re paying twice to eat one meal.
Sometimes you can’t help a late-night drive-thru when the café’s closed, but remember that each school-provided meal is around $11 each. You may be eating on a couple bucks, but that’s a couple bucks added to the $11 you already spent. That makes just about the most expensive drive-thru taco you’ve ever eaten.
Get involved in clubs for your major. Chances are, your school’s already pushing this pretty hard, especially if you’re a freshman. Clubs for your interests are great, but clubs related to your major are the best: Upperclassmen can hook you up with used textbooks.
I can’t tell you how many times I’d take my $50 book back to the bookstore at the end of a semester only to be informed that it’s now only worth 50 cents. I’m sorry, what?
I guarantee you, there are some juniors and seniors who’d be happy to meet you halfway on their used books. That’s 25 bucks for each of you.
Big ways to save once a year
And then, of course, there are the tax savings you can cash in on once a year. When the time rolls around for you to file your tax return, remember these tax breaks: Either you or your parents will want to check these out (whoever is paying your expenses gets the tax breaks).
The American Opportunity Tax Credit (AOC or AOTC). For the first four years of college, you may qualify to have up $2,500 knocked off your tax liability. Even better, you could get up to $1,000 of that amount in a refund, even if you don’t owe any tax at all.
There’s an $80,000 income ceiling for single filers to qualify for the credit ($160,000 if you’re married filing jointly), but the average student probably isn’t raking that much in during the year.
The Lifetime Learning Credit (LLC). The Lifetime Learning Credit doesn’t have the first-four-years restriction, so it can be used for anything from your undergrad to professional courses. As long as you qualify, there’s no limit to the amount of years you can claim it — and the amount is up to $2,000.
The LLC isn’t refundable, though: It’s limited to your tax liability.
The tuition and fees deduction. Don’t qualify for either of the credits? There’s one more safety net, and that’s the tuition and fees deduction. While it doesn’t go straight to your tax liability (since it’s a deduction), it can cut your taxable income by as much as $4,000, even if you don’t itemize deductions.
Important note ahead: You can only choose one of the tax breaks above, even if you qualify for all of them. When you file with 1040.com, we’ll help you take the option that saves you the most money and boosts your refund as much as possible, so you can save money as a college student — because every little bit adds up, doesn’t it?