Food spending is one that students often turn to when they want to free up money for other areas of their budget. While a certain amount and quality of food is a necessity, for most Americans much of their food spending is a ‘want.’ There are several approaches a grad student can take to spend less on food while still meeting needs.
Stretch that Stipend
When money is tight, as it is for many grad students, frugal practices are necessary just to stay in the black. But everyone should consider being frugal in certain areas of her life just so she can put her money where it matters most and prevent herself from spending where it doesn’t matter as much (based on her individual values). Frugality prevents waste, which means there is more money available for the important or fun things in life.
Further reading: Frugality, What Is It Good For?
This set of pages will be continually updated with frugal tips and stories of how individuals implemented them. If you have a frugal practice to add (and especially if you can share a story), please email contact at gradstudentfinances dot org or leave a comment.
Further Reading (Meta-Lists):
- Surviving on a Stipend
- Grad School on a Budget Part 1 and Part 2
- How I’ve Live on an $800 Monthly Budget in the City
- DIY Frugal Living Investments
- 12 Shocking Frugal Hacks (You Won’t Believe #2)
- 11 Benefits of Frugality that Have Nothing to Do with Money
- 111 Ways to Save Money on Household Bills
- 66 Ways to Save Money in New York City (almost all are applicable everywhere!)
- How to Save Money as a Grad Student
- 10 Ways to Save More Money
For most people, transportation is their second largest single expense after housing. Owning a car is incredibly expensive, especially if you are making debt payments on a newer vehicle. Anything you can do to move away from the solo car commuter model is likely to be a frugal choice. Luckily, car-free or car-minimal lifestyles are often easier for students than other workers.
Near some universities, a car is a virtual necessity. However, you can minimize your spending on your vehicle and commute by making judicious choices both in your initial purchase and ongoing usage.
Purchasing a Car
An ideal frugal vehicle would have a low purchase price (with no debt) and be fuel-efficient, reliable, and inexpensive to maintain and repair. Because this is such a financially impactful purchase, you should devote significant time and energy to researching the vehicle you want to buy and where to buy it from.
Private sales are generally less expensive than dealer sales, though they may not include a warrantee or previous inspections. You should have a mechanic check over a private sale vehicle before you purchase it.
New cars lose an enormous fraction of their value in the first year of ownership. A better value is to buy a car that is at least a few years old, but has been well maintained. The common wisdom is that driving a car “into the ground” (until it is no long usable) after purchase maximizes the value you can get out of the car.
Financing a car not only causes you to pay interest over the life of the loan but, like any other kind of debt, can also enable you to overbuy. If possible, buy a car with cash. If that’s not possible, think about the total price you will pay to own the car, not just the monthly payment amount.
To reduce your fuel spending, expend less fuel or buy your fuel at lower prices. If you are not willing to buy a car with better gas mileage, you can practice hypermiling to increase your gas mileage in any vehicle, or simply reduce the amount you drive by substituting lower-cost transit methods. Keeping your car well maintained should also minimize your fuel usage; tire pressure, for example, has a large impact on fuel efficiency. There are now many apps available such as Gas Buddy to help you find the best gas prices nearby.
To reduce your spending on car insurance, buy only as much insurance coverage as you need. For example, you can raise your deductible if you have savings on hand to meet it. You may not be required to maintain comprehensive coverage if you own your car outright. However, carefully consider the possible consequences of reducing your insurance coverage and make sure that you have the savings to cover the potential downside.
Compare prices across multiple insurance providers to find the best price, including bundling services. Be sure to ask about all available discounts offered by your insurance company, such as those for being a good student or having a clean driving record. To lower your insurance cost, you can own a less expensive and/or safer vehicle, drive fewer miles per year, install a driving monitoring device, and pay for multiple months of coverage at once.
No matter how car-dependent a town seems, there are always people who live there without owning their own cars. If you are evaluating whether to buy or bring a car to grad school, seek the counsel of first-year international students. Many are not able to buy cars when they first arrive in the US, and by talking with a few students you can see whether the no-car lifestyle is attractive to you in terms of where you would need to live and shop. Even if you own a car, you can minimize your ongoing expenses by commuting by another method and using your car infrequently.
One of the advantages of living with a roommate who attends your university or in a housing complex with many students is that you have great potential carpooling companions. You might be the primary driver or split the driving evenly if you own a car, or you could suggest a carpooling arrangement to a neighbor who shares your schedule. A periodic or informal arrangement will help you spend less on gas and a formalized commitment can result in you paying for less gas and only a fraction of a parking permit. Carpooling can also be easily be combined with any of the below methods, such as hitching an occasional ride when the weather is bad. With carpooling, you have most of the conveniences of driving, such as a fast commute and being protected from the elements, but you will have to take one or more other people’s schedules into account.
Depending on your city and the length of your commute, using public transport for your commute might be a viable option. Look into whether your university offers discounted rail or bus passes for its students and whether buying a bulk pass will be cheaper than individual fares. Your university bus system may pick up for near/on-campus transportation where the public transportation leaves off. One of the advantages to public transport is that you may be able to work while riding the train or bus, but a common drawback is a longer commute. Be careful that your cost for using public transit does not grow larger than the ownership of an inexpensive car, if your primary reason for using this method is cost savings.
Biking or walking to work is likely to be a wonderful synergy of physical exercise, sustainable living, and frugality, but also depends heavily on the bike- and pedestrian-friendliness of your city and university. You must carefully choose where you live to make walking feasible and examine the routes to your university before committing to biking. Don’t forget to have a plan for any changes you may want to make to your commute after dark or in adverse weather conditions. Biking for your commute will require a monetary investment in a bicycle and appropriate clothing and there will be some ongoing maintenance costs, but these are virtually always much lower than the comparable cost for a car.
Depending on the nature of your research and the disposition of your advisor, working from home some of the time may be an option. The money that you end up not spending on commuting costs is likely to be slightly offset by increased power usage at home. Even if you have the option to work from home, you may find that working at your university is advantageous for productivity or social reasons, but you should try out both options to see what works best for you and how much less money you spend when you work remotely.
For most people, housing is their largest single monthly expense. A judicious choice in where and with whom to live during grad school can really help you balance your money. Moving isn’t easy, but if you find that you are spending too much on your living quarters, you can make a one-time decision to change that situation for the better.
Making housing decisions is likely to be most difficult in your first year before you are familiar with the local market. Through the course of your first year, take careful note of where your peers live and ask them how much they pay in rent. Then, when your lease is up, you can make a more optimal housing decision than your initial choice. Even if you live in the same place for many years and like living there, research your other options; cities change, and a better housing fit for you or a better price may have become available.
Further reading: Apartment Hunting
Rent vs. Buy
The default choice for grad students is to rent. Typically, grad students desire flexibility and are not financially prepared to be homeowners. Because buying a home is so expensive up front and there is the possibility of housing prices dropping, it only makes financial sense to buy if you have a reasonably long time horizon for living in the home. (The rule of thumb is five years, but this can vary quite a bit with the local housing market.) Therefore, renting a home is the more frugal choice in the short term, but buying a home can be more frugal in the long term. If you rent out one or more rooms in your home to roommates, your home can even become a source of extra income and a form of investment.
Resource: New York Times Rent vs. Buy Calculator
Alone vs. with Others
It is virtually always less expensive to share your living space with others, whether that is with your family or roommates. You can split not only your rent but also utilities and save time by trading off common-area chores. Although many single grad students prefer to live alone, they should calculate exactly how much they are paying for that premium and consider if they would value spending that money elsewhere more. Your university may have a database similar to craigslist where you can find roommates who are also students or university employees, which is a great initial screening tool.
Further reading: Find a Roommate and Financial Freedom
On-Campus vs. Off-Campus
Universities often offer on-campus graduate housing to international and sometimes domestic students. In some high cost-of-living cities, the on-campus housing is subsidized and therefore highly desirable and competitive. You should ask older students already living in on-campus housing for tips on how to gain entry. At other universities, on-campus housing is a convenient but more expensive option in comparison with off-campus housing. However, paying more for rent may be a frugal choice if it sufficiently reduces your living cost in other areas such as transportation. If you are living in on-campus housing and desire to move off-campus, start looking for housing options a few months in advance of the end of your current lease.
Further reading: Our House Is a Very, Very, Very Cheap House
Location, Location, Location
While location is tantamount when buying a home, it is also of importance when renting. The proximity to your university and other factors about the neighborhood you live in will greatly influence the price of your rental. Renting closer to work or on a more convenient route will cut your commuting costs and time and may even facilitate your ability to work in the evenings or on weekends. If you are investigating living car-free, the location of your home becomes even more important for its proximity to public transit, work, and retailers.
Size and Amenities
How many square feet you can get for your housing dollar will vary greatly depending on the city you live in, and you may have to adjust your expectations of personal space if you are moving up in cost of living. Carefully consider the amenities that your housing may offer you – a gym, pool, clubhouse, parking – and whether you would use them before committing to a higher rent.