Sunday, March 10, 2013

Savings Challenge #1 - BYOW

Welcome to the first savings challenge! Over the next few weeks you'll learn how to recover when  your financial aid award gets reduced.   The first challenges target ways to cut expenses.  The second set of challenges will present creative (or downright boring) ways to earn lost funds from a different source.

Break it down. Let's say your work study award is slashed by $2,000.  First, break it down. These funds are typically earned through a 5-10 hour/week on-campus job at around $9/hour.  That's roughly $35-$75/week cash in your pocket to spend after taxes. Be honest. These funds are probably not going toward the big bills like tuition or room and board.  And, they aren't earned soon enough to use toward books.  More than likely these funds buy everyday stuff from toothpaste, to extra class supplies, bus passes, and - yes - fun.

Challenge #1:  BYOW One of the highest margin items we buy is non-alcoholic drinks (alcohol is addressed in a later challenge).  Ever notice how pricey soft drinks are on restaurant menus?  That's because soft drinks & coffee drinks cost the vendor pennies, making soft drinks one of the highest profit items on the menu. That's how coffee kiosks and soda machines make billions of dollars from students annually, one $2 pepsi or $5 double mocha latte ($6 with tax and tip) at a time.

Chances are, some of your hard-earned $35-$75 bucks are going directly toward that profit. Rather than hand over your cash to beverage industry executives, do your budget - and your health - a favor.  Invest in a Brita water bottle with filter ($17 at Target) and trade the coffee shops and pop machines for each and every water fountain you pass by.  The water is cold, the filter makes it taste great, there are no long lines to make you late for class, and you are doing the environment a favor by reducing the number of plastic cups and bottles in land fills.

At $5 spent per day on average for soda or coffee, that is $35 per week you won't miss from reduced work study funds (besides the hours spent earning it).  And if you feel bad not buying from your roomate the barista, put a tip jar in your room and donate daily.  You'll still save money and the roommate won't have to share the tips. Everyone wins.

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