College on a Beer Budget…Part I

Many debate the value of a college education today.  The escalating tuition has led many experts to declare that college doesn’t make financial sense.  However, numerous studies provide evidence to the power of earning a college degree.  It statistically provides far greater lifetime income opportunities to pad your net worth.

As someone who graduated from college in four years with honors while emerging without any debts and an actual positive net worth, I would like to share some of my most valuable tips to enjoying the college experience while setting you up for net worth growth and early financial independence.  The list below identifies my keys to a great college experience on a beer budget.

C'mon, it did win the blue ribbon.....119 years ago

C’mon, it did win the blue ribbon…..119 years ago

  • Know what you want

I’ve seen many friends float through school without an idea of what they truly wanted to do, only to change their minds three years deep into school.  Realize that each year wasted in the average public in-state four-year University at 15k would grow to 30k after 10 years and 60k after 20 years if it had been invested instead.  This also assumes that one pays for school out of pocket without taking loans.  If the year is financed with loans then the 25k and 50k figures boost significantly and create a further barrier to one’s financial independence.

  • High school AP courses

High school AP classes or running start are wonderful ways for students to save on college expenses.  At virtually no cost, each class passed provides about a $1,500 boost to one’s net worth by replacing a 5 credit course at a public university.

  • Hustle scholarships

I received about $14k in scholarships covering about 35% of my combined tuition and living expenses in school and about 70% of my tuition expenses.  This is without even being eligible for the need based scholarships which are plentiful.  This was some of the easiest money I’ve ever made and helped greatly to emerge debt free from school.  I probably spent a maximum of 40 hours applying for scholarships.  So, I basically earned $350/hour while researching and preparing applications for scholarships.

That is over 10 times the wage I earn today after obtaining my engineering degree.  Looking back, I wish I devoted even more time chasing scholarships after looking at the ROI (return on investment).  It might even prove more valuable for some students to spend summers devoted to churning out scholarship applications rather than toiling away at a minimum wage job.

  • Community college

I didn’t go this route, but I know it’s a valuable method of minimizing education cost.  The primary savings comes from both reduced tuition rates and living expenses since many community college students live at home with their parents and save big money on housing, food, etc.

  • Attend In-State University

This was my route in school.  I attended an in-state public university for the cost factor.  At my time starting in 2004, a 4-year degree with all associated school and living costs ran about $40 k in comparison to $120k for out of state or private university.  I just looked at it from the perspective that I wasn’t going to gain an experience or starting salary at an out-of-state university worthy of the 300% premium in price.

  • Take max credits per term

This is one of the prime ways to minimize college costs.  The standard term is typically 15 credit hours.  However, most schools allow one to take up to 18 without paying extra fees.  Utilizing this method could potentially save two quarters of schooling or around $10,000 at an in-state public university.  I graduated in four years with 214 credits taking an average of 17.8 per quarter.  My degree required the most credits of any bachelor’s program which led to most of my program counterparts spending five years in school. If I had a less intensive program, I would have been set for early graduation in probably 3.25 years.

The decision to overload on credits allowed me to both save the extra ~$12k (at 2008 tuition rates) from having to take the extra year of classes as well as preventing the opportunity cost of missing out on a year’s wages for my engineering job. All in all, this decision put my net worth ahead by well over $80,000 today by maximizing course credits.

  • The dorm mini-fridge is your friend

As a health and cost conscious individual, I wasn’t enthused about the dorm meal plans.  Expensive and filled with unhealthy fast food-style grub, I opted for the lowest of the mandatory meal plans.  I would typically have only one large meal at the buffet style cafeteria for dinner.  I would focus on loading up on whatever was served on the nightly menu and my plate(s) consisted of proteins, vegetables and milk to supply the bulk of my daily caloric needs.

Otherwise, I lived out of food stashed in my dorm mini fridge and pantry.  I’d make weekly runs to the grocery store and stock up on healthy frugal fare including cottage cheese, greek yogurt, string cheese and fruits (mainly bananas, apples and oranges). I’d also have steady supplies of plain oats, tuna fish, black beans and whey protein power. I’d have oats or cottage cheese with a scoop of protein powder and banana to provide a quick healthy meal for under a buck. Lunch would be a small snack made of the above staples before my nightly buffet feast.

  • Cook large batches

This is one of the most effective means of minimizing both your time and cost per meal.  As a student swamped with assignments and deadlines, this was my favorite way to feed my face.  Large batches of chili, lentil soup, bean soup, and spaghetti served to provide tasty fare that could provide food for most of the week.

  • Staple foods

Fill your cabinets with cheap, unprocessed, staple foods.  Find these at the perimeter of the grocery store to avoid the processed, overpriced garbage.  Load up on oats, beans, rice, eggs, cheese, lean meats and veggies.  This will help you stay fit and frugal.

  • Work summers

I was fortunately able to work only in the summers during school, allowing me to focus on school and grades during the year.  I was able to work full time in the summers making between $12-16/hr to earn between $6,500-$8,500 over the summer.  This helped me pad my bank account enough to provide enough funding for all my living expenses during the school year outside of tuition related expenses.  Working during the summer is a huge benefit to escaping college debt free.

  • Pre-funk

Yes, college students love to party.  It’s a way to hangout with your friends, meet girls and socialize.  Obviously, it can be very costly to hit the bars for a night of drinking.  That’s why I would embrace the pre-funk.  Before walking downtown to the bar scene, we would enjoy a few hop sodas at home so we’d only need a beer or two once we hit the bar.  Just remember to walk or bum a ride home.

Well this post is getting quite lengthy and I still have a few more tips to share, so that will conclude the first round of tips for college on a budget. If you’re not in the shoes of the frugal college student, hopefully you can share some of these tidbits with friends or family to help them gain the perks of a college education without the debt burden that can follow for a lifetime.

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