For simplicity let's say my monthly food budget is $500.

My university has a plan where if you buy $400 worth of 'university currency' you get another $100 free.

If I were to do that, I would save $100 in the course of time it takes for me to spend $500 in food at the university.

However, if I buy it I will either have to use savings to eat up to $400 into next month's food budget, or live on $100 of non-university dining for a whole month (thereby spending more than usual at the university, cutting into the $100 savings I wanted).

How do I approach buying this package?

2 Answers 2


Take the offer only if there's no catch:

  • You're sure you'll spend the credits.

  • You shouldn't have to buy something you wouldn't otherwise buy, or from an overpriced shop, or eat in a restaurant that serves worse food.

  • You should have plenty of savings and won't miss the money that's blocked for the duration it takes to spend it.

If there's a catch, like one of the above, don't take the offer, and retain your flexibility.


I presume you mean your monthly food budget is $100, not $500.

The key word is budget, not monthly.

If you expect to use the whole $500 of credits eventually, and you have enough cash to make that purchase while leaving yourself sufficient reserves for your other needs of course you should take advantage of the 20% discount.

If this would crimp your style, you have to make a decision about how much you are willing to sacrifice to save $100. That ain't chump change, even by today's standards. And remember that, since you're budgeting, you can distribute the pain across multiple months. Would you pay an extra $25 for four months to get $200 back in the fifth month?

Of course if you really can't afford to pay in advance (where you need to decide what "afford" means), this option simply isn't available to you. And if you don't think you'll spend all $500 on things which accept this campus cash (maybe you'll be cooking for yourself or eating off-campus), it may not actually save you anything and indeed may tie up money that you would have used elsewhere.

You need to decide whether you can afford to make that up-front investment, based on weighing the cost now against the savings later. That isn't a decision we can make for you. Note that it also depends on how well-priced and well-prepared the school's offerings are!

Btw, this is an exercise in what is known as "opportunity cost" Buying in advance (assuming you can afford to do so) ties up that money for a while and thus may cost you the opportunity to do something else with it. You need to make an educated guess about how much that will inconvenience you and whether that cost is worth the gain.

  • 3
    I would also seriously evaluate the prices. Just because you're getting 25% more "for free" doesn't rule out the very high likelihood that the University shops where you can spend those credits have prices that account for that 25% premium
    – THEAO
    Jul 30, 2015 at 4:27
  • Depends on the school. There are some that don't nickle-and-dime the students to death.
    – keshlam
    Jul 30, 2015 at 5:56

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