Saving Money While Still Borrowing Money
Have you ever wondered how you were going to budget and save money while borrowing money to go to school? Below are several examples on how one is able to do just that. With a little patience and thinking things through, it is possible.
Example 1: Pay the Interest on Your Student Loan
You borrow a $6,000 Unsubsidized Stafford loan, and you pay the interest every month for 4 years.
- Starting balance: $6,000
- Accrued interest: $0
- Balance when you start repayment: $6,000
- Monthly payment: $69.05
- Total interest paid on loan for all time: $2,285.69
You borrow a $6,000 Unsubsidized Stafford loan, and you defer the interest every month for 4 years.
- Starting balance: $6,000
- Accrued interest: $1,632
- Balance when you start repayment: $7,632
- Monthly payment: $87.83
- Total interest paid on loan for all time: $2,907.48
How much would it cost you to make the monthly interest payment in the first example? It’s about $34 per month. If you can manage to save or earn that much money during your four years of college, you could save yourself $621.79 in interest that you will not have to pay back from capitalization. Visit Student Loan Info for more information on Unsubsidized Stafford loans.
Example 2: Cut the Coffee
Love your Starbucks or Caribou? Well, big chain coffee shops love your money. Coffee is the little thing that quietly drains your bank account without you ever noticing. That daily coffee costs you $150 per month (at $5 per coffee). At $1,800 per year, that’s a two month vacation in Southeast Asia. What is more important, your daily cup of Joe or getting to spend two more months on the beaches of Thailand?
Try giving up the store bought coffee or switch from the cappuccino to a standard brew. You could also start drinking tea or brew your own cup of coffee at home. Making it at home from high-quality beans still costs less than a buying a venti mocha from a big chain coffee shop. If you cannot live without your latte, try British chef Jamie Oliver’s trick: Put some milk in a container with a tight-fitting lid, shake it hard, and mmm, foam.
Example 3: Learn to Love Leftovers for Lunch
If you often buy lunch at work or eat out while running errands, try bringing your own lunch least four days a week. Treat yourself on the fifth, if you want. At $7.00 per lunch, that saves you $28 a week or about $112 a month. Yes, you spend more on groceries, but not $112 more, and most people spend more than $7.00 on lunch at a restaurant. You do not have to reheat the leftovers as they are, either — London broil makes excellent lunchtime fajitas, for example.
Example 4: Quit smoking: Smoking can not only kill you, but it kills your wallet too. At $10.00 a pack per day, that’s $3,650 every year. That is a lot of money. Even if you smoke half that it’s enough money to spend several months in Central America.
Do you have other money-saving tricks? Share with us in our comments section below.