How to Save Money as a Student

Student money advice usually starts with instant noodles. It should start with a form, because the largest sums available to students are the ones nobody claims.

Start with what you are owed, not what you spend

In the US: the education tax credits. The IRS runs two, and most students or the parent claiming them qualify for one.

	American Opportunity Tax Credit	Lifetime Learning Credit
Maximum	2,500 dollars per student	2,000 dollars per tax return
Refundable	Yes, 40 percent up to 1,000 dollars	No
Years available	First 4 years of higher education only	Unlimited
Income limit (MAGI)	Under 90,000 dollars, or 180,000 dollars joint	Under 90,000 dollars, or 180,000 dollars joint
Covers	Tuition, enrolment fees, course materials	Tuition and enrolment fees

Two details people miss. The AOTC counts course materials even when they were not bought from the school, so textbooks and required equipment qualify. And because 40 percent is refundable, it can pay out money even if your tax bill is already zero. You claim either credit on Form 8863 with your return, and only one credit per student per year.

In the UK: Council Tax. GOV.UK is unambiguous that households where everyone is a full-time student do not have to pay Council Tax. If a bill arrives anyway, you apply for the exemption rather than paying it. Full-time generally means a course lasting at least a year with at least 21 hours of study a week, or for under-20s on courses up to A level, at least three months and 12 hours a week.

If you share with a non-student, the household is billed, but a discount may still apply because student residents are disregarded when counting adults. A house with one worker and three students is very often paying the full rate when it should be on a single-person discount. Check the bill.

Bursaries and hardship funds. Every UK university and college runs its own bursaries, scholarships and hardship fund, with its own rules and its own amounts. GOV.UK's guidance is that hardship funds go to students in financial difficulty, including those with children, mature students, care leavers and disabled students, and are usually paid as a lump sum or instalments without needing repayment.

These are consistently under-applied for, because the application is tedious and students assume they will not qualify. The expected value of one afternoon spent on the form is higher than almost anything else on this page.

Then fix the recurring costs

Once the claimable money is claimed, attack the bills that repeat every month rather than the ones that repeat every day.

Accommodation. By far the largest line. The saving is in the decision, not the management: how far out you live, how many people you share with, whether bills are included. Read the contract for the length of the tenancy, since a 51-week contract on a 30-week course is four months of rent for an empty room.

Phone and broadband. Check whether you are on a plan that ended its minimum term. Out-of-contract prices are routinely higher than the same provider's current offer for a new customer.

Transport. Student railcards, campus bus passes and city travel schemes are the rare discount worth buying up front, because the break-even is usually a handful of journeys.

Subscriptions. Most streaming and music services run student pricing, and several will verify your status in a couple of minutes. This is the one everyday saving that is worth doing immediately, because it applies automatically every month thereafter.

Everyday spending, honestly

The daily-habit advice is real but small. It is worth doing after the above, not instead of it.

• Cook in batches and eat what you cooked. Food waste is the biggest hidden cost in a student kitchen, ahead of what you paid for the ingredients.
• Buy textbooks last. Check the library, second-hand copies and previous editions before buying new. Some required texts turn out to be optional in practice.
• Carry a student ID everywhere. Discounts exist in places that never advertise them, including cinemas, museums, haircuts and software.
• Use one account for spending. Keep the loan or grant in a separate account and move a weekly amount across. It converts a lump sum into a budget without any tracking effort.

The bottom line

Spend one afternoon on the claimable money: check whether you or your parents can claim an education tax credit, check your Council Tax status, and apply to your institution's bursary and hardship fund. Then sort accommodation and contracts, add student pricing to your subscriptions, and let the daily habits be the last five percent rather than the whole plan.