How to create an emergency savings when you’re a broke college student

Setting up an emergency savings fund is extremely difficult for anyone – especially a broke college student. That said, it is extremely important to have an emergency fund set up in case any unexpected expenses come along. Car troubles, unexpected fees, parking tickets, etc. can be easily covered if you have an emergency fund set up.

Whether you’re a traditional or non-traditional student, this guide is meant to be flexible so that you can fit it to your needs.

So how do you save money?

1. Make a goal.

How much you want to save is very dependent on you and your lifestyle. The typical definition of an emergency fund is having 3 months’ worth of expenses saved up. This is if you’re saving up in case of a major catastrophe like a career loss. For our purposes, we are treating this fund as a place you can pull money from in case an unexpected expense pops up.

When I was in college, I wanted to have $2,000 in an emergency fund. This is because I knew that my car was old and would need expensive repairs at some point. You might feel comfortable with $1,000 or you might prefer a fund of $3,000. Think about any unexpected and expensive expenses that could pop up in the next few years and plan for those.

Once you have the amount you want to save, you need to figure out when you want this amount saved by. I wanted to reach $2,000 in my fund in one and a half years, so I needed to save about $115 per month to reach that goal.


2. Create your budget.

You don’t need to do anything fancy. In a spreadsheet or using pen and paper, write down your income per month and your expenses. Add in your monthly saving contribution as an expense line item.

Make sure to include all expenses. This includes line items for rent, utilities, food, entertainment, and so on.

If you’re able to include your monthly saving, then you’re on the right track! If your expenses exceed your income, then:

3. Figure out what you need to cut to accommodate your saving goal.

There are plenty of simple cuts you can make to reach your goal as well as some bigger lifestyle changes. There are some great articles out there that outline ways college students can save money, but we will name a few to get you started:

  • Attend events with free food. Universities always host events with free food. Keep an eye out for these events to help cut down on food costs.

  • Consider going car-less. This is a big lifestyle change if you already own a car. But cars come with a lot of expenses. If you live on campus in a small college town, the gas and maintenance may not be worth it. Consider leaving your car at home during the semester to cut down on those costs.

  • Live at home. If you go to school locally, you may already be doing this. But if you are living on campus and your home is less than 30 minutes away, consider moving back home. It will cut down on a lot of expenses and allow you to save more money.

  • Take advantage of student discounts. Almost everywhere offers a student discount of some sort. Make sure to carry your student ID with you and don’t be afraid to ask if there is a student discount available. It is usually only 10% – 15%, but if you were already going to buy the item, those dollars add up.

  • Limit eating out/getting takeout. Whether you’re on campus with a pre-paid meal plan, or live at home or in your own apartment, limit going to restaurants as much as possible. Takeout, fast food, and dining out may be easier, but it is a lot more expensive. Instead, cook at home and meal prep to cut back on food expenses.

  • Use the resources available on campuses. Most universities offer a free or discounted gym membership, student clinic, law services, counseling, and so forth. These services are already included in your tuition, so seek them out and take advantage of them. It can save you a lot of money.

This is a very limited list of things you can do to save money, and a lot of these may not apply to your situation. Use this list to get the ball rolling and sit down with your budget to figure out where you can cut back. Don’t be afraid to be harsh. This budget can grow and change with you. If you find your budget isn’t working for you, you can always change it.

4. Pay yourself first.

Now that you’ve decided how much to save each month and settled on a budget, it is time to start saving! Every time you get paid, make sure to pay yourself first.

Before making any purchases, make transfer what you need to your savings account. Treat it like any other bill. When you make the transfer, you won’t have to worry about whether you’ll have enough money leftover to save when you’re making purchases throughout the month.


Stick with it!

The biggest thing to remember is that you will face some discomfort, but you can’t let that stop you. It will not be fun to pass on invites to go out or skip takeout; but this discomfort now will save you from the extreme stress of trying to put together $1,500 when an emergency happens down the road.

When you feel yourself tempted to take money out your savings to buy last minute concert tickets or an impulse purchase (and trust me, you will be tempted), remind yourself of why you are doing this. And remind yourself that it is temporary. Once the savings is built up, you can choose to continue saving (always a good idea) or leave it and integrate the extra money somewhere else into your monthly budget.

Happy saving!

Rachel Morris