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Even if college is several months or a few years away, high school can be a great time to start saving for future college expenses. This is especially true as the cost of higher education continues to climb.

Just making a few simple moves, like picking up a part-time or summer job and signing up for AP classes (which may allow you to skip some college classes and save on tuition), can go a long way once you get to campus.

Read on for more tips on how to start saving up money for college while you are still in high school.

Advancing Yourself With AP Classes

Achieving an AP Exam score of 3 or higher may allow incoming freshmen to skip introductory college courses or gain credit toward graduation. The College Board reports that nearly all colleges and universities in the U.S. offer credit, advanced placement, or both based on your AP scores.

Most colleges have a policy outlining the minimum scores needed to earn credit for specific AP Exams, plus how much credit will be awarded and how it applies to your degree or graduation requirements. The College Board offers an AP credit policy search online, but it’s wise to double check with your individual school.

Earning college credit before you even step foot on campus freshman year can be a great way to save money on future college classes in the long run. You might even be able to graduate early, which could mean thousands of dollars in savings depending on which university you attend. Of course, there are fees to take the AP Exams, but that amount may be offset by the amount of credit hours you’re able to gain if you score well.

Picking Up a Part-Time or Summer Job

Working in high school and setting aside at least a portion of your earnings in a savings account earmarked for college can definitely come in handy when it comes time to cover expenses like books, meals, entertainment, or off-campus rent.

Recently, some companies with part-time and entry-level jobs — perfect for high school students — have started offering tuition support or reimbursement for eligible employees. At Starbucks, for instance, part- and full-time employees are able to get 100% of their tuition reimbursed for a first-time bachelor’s degree through Arizona State University’s online program. Working at Chipotle, you may also be able to receive some tuition assistance every year.

Managing Expenses by Budgeting

It’s never too early to start good money habits, such as maintaining a balanced budget. You might start with a simple spreadsheet that tracks your monthly income (like allowance or any paychecks you earn) as well as your monthly spending, separating your expenses into essential and nonessential. You may be able to free up more money for college savings by cutting back on nonessential expenses. The popular 50/30/20 budget rule suggests putting 20% of your income toward savings for long-term money goals, like saving for school.

Starting to save in high school could potentially help minimize the financial burdens you face during college. Maintaining a budget in high school could also help prepare you for keeping your expenses in line as a college student.

When making a college budget, make sure you research what things like books, transportation, rent, and groceries are going to cost in the area. You can then look at what you might be able to cut in order to save more, like smaller meal plans, off-campus housing, renting used textbooks, or taking the bus rather than bringing your car.

Recommended: 33 Ideas for Saving Money While Dorm Shopping

Switching Up Your Savings Account

A high-yield checking or savings account could earn you significantly more money by paying a higher-than-average interest rate. This could help your college savings fund grow more quickly.

If you earn a regular paycheck, one easy way to save is to split up your direct deposit between your checking and savings account. This way, you guarantee some money automatically ends up in savings, making it a little harder to spend. You could also set up an automatic transfer within your account so that you don’t have to constantly remind yourself to save.

Researching Scholarships and Grants

Scholarships and grants are both forms of aid that don’t need to be repaid, essentially making them free money. Getting a scholarship, or a few, can go a long way in lessening the financial burden you face in college. Some scholarships are awarded to incoming freshmen so spending some time researching scholarships and grants could pay off in the long run.

There are online databases, like FastWeb or Scholarships.com, that aggregate information about different scholarships and what their application process looks like. Each scholarship is likely to have their own eligibility criteria and application requirements so pay attention to the details when you are applying.

Different Ways to Pay for College

The U.S. government offers aid in the form of federal student loans, but also grants and some scholarships, which can significantly reduce the cost of college. It’s important when applying to schools to consider all of the costs involved. You can estimate your financial aid online ahead of time, so you can make an educated decision about where to attend school.

Filling out the FAFSA form every year is an important step toward securing federal aid, including merit-based scholarships and federal student loans.

If savings, financial aid, and federal student loans aren’t enough to pay for college, private student loans are another option to consider. These loans are made by private lenders and aren’t required to follow the same regulations as federal student loans. Because of this, they lack the borrower protections afforded to federal student loans and are generally considered an option only after all other sources of funding have been reviewed.

The Takeaway

High school is the perfect time to start preparing for college and how you’ll pay for it. Taking on a summer or part-time job can boost your income and allow you to start socking away money for future college expenses. Other ways to make the cost of college more manageable include taking AP classes, researching scholarship options, applying for federal financial aid, and taking out federal or private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

How much should a high school student save for college?

There is no one set amount that a high school student should save for college. Much depends upon individual circumstances. However, the rule of thumb is that it can be wise for families (parents, relatives, and the student) to save up one-third of the costs and finance the rest. College tours are a good way to gain insights into a campus and how it operates. You can also hear from a student guide about important insider topics and ask questions from a current student.

What are good ways for a student to save for college?

Getting a job, whether part-time or full-time over the summer, is one good way for a student to accumulate funds for college. Taking AP classes can also be helpful, as a good score on the AP Exam can help a student place out of introductory courses and potentially graduate early. This can result in significant tuition savings.

What if I don’t use up 529 funds for tuition?

If 529 funds aren’t used by a student, they can likely be transferred for use by another family member on qualifying expenses, used to pay down student loans, or withdrawn for nonqualifying expenses (which can trigger taxes and penalties), among other options.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Student loans can help you finance your college education. However, you don’t want to take on more debt than you can comfortably pay back after you graduate. As of June 2025, student borrowers owe roughly $1.8 trillion in student loan debt, including federal and private student loans, according to the Federal Reserve.

High school can be a great time to start learning about the types of student loans available to you, how interest accrues, and what you can expect when it comes time to repay any student loans you take out. Read on to learn some of the ABCs of student loans, and how to not let them weigh down your financial future.

Student Loan Types

There are two main categories for student loans: federal and private student loans.

Federal Student Loans

Federal student loans are funded by the federal government. Interest rates are fixed (and comparatively fair) and are set by Congress. Federal student loans also come with protections like income-driven repayment and deferment or forbearance options in the case of life changes, such as sudden loss of a job or other roadblocks to repayment.

The following are the federal student loan options offered:

•   Direct Subsidized Loans These are available to eligible undergraduates with a proven financial need. The government subsidizes (meaning it pays for) the interest that accrues on these loans while the student borrower is enrolled in school at least half-time and during the loan’s grace period (more on that below), and other qualifying periods of deferment.

•   Direct Unsubsidized Loans These are available to eligible undergraduates and graduate students regardless of financial need. Student borrowers are responsible for paying all of the accrued interest on unsubsidized student loans.

•   Direct PLUS Loans These are available to eligible parents of undergraduate students and to graduate or professional students. They are not subsidized by the government. (Note: As of July 1, 2026, Federal Direct PLUS Loans for graduate students will no longer be available. Federal Direct Loans will remain, however, and are available to graduate and professional students.)

Private Student Loans

Private student loans are issued by nongovernment institutions, such as banks, credit unions, and online lenders. The requirements for applying for these types of loans may be more stringent.

Lenders will typically look at the student’s or their cosigner’s credit history, income, and other financial information. Some lenders require you to begin making payments while you are in school, while others allow you to wait until six months after you graduate. Either way, interest typically begins to accrue as soon as the funds are disbursed.

How to Apply for a Student Loan

The process for applying for student loans varies based on whether the loan is private or federal.

Applying for a Federal Student Loan

To apply for a federal student loan, you need to fill out and submit the Free Application for Federal Student Aid (FAFSA®). Even if you don’t think you’ll be approved for financial aid, it can be worth submitting the FAFSA. The application is free and you may qualify despite your circumstances. The FAFSA also gives you access to federal student loans.

Every year, the FAFSA form usually becomes available online as of October 1 for the next school year. Once you complete the FAFSA, it will be used to determine the combination of federal loans, grants, and work-study you’re eligible for. Some colleges and universities also use information from the FAFSA to determine if you qualify for school-specific financial aid.

Applying for a Private Student Loan

It’s important to take the time to do some research and find a lender with a good reputation that offers competitive rates and terms. Ideally, you want a lender that offers flexible repayment options, reasonable (or no) fees, and will provide helpful customer support if you find yourself having any issues with your student loan payments.

If you decide to apply for a private student loan, you will more than likely have to reveal personal financial details, like your credit history. Since students typically don’t have much, or any, credit history, they often need to apply with a cosigner. That’s someone who will share the responsibility with you of paying back the loan.

In many cases, that cosigner would be a parent or an adult with whom you have a close relationship. Getting a cosigner may increase your chances of getting a better interest rate, which could help you spend less in interest over the life of the loan.

Types of Student Loan Interest Rates

The interest rate on your student loans could have a lasting impact on your future finances. The interest charged is a percentage of your unpaid loan principal — that is, the amount you borrowed. Interest is paid to the lender in exchange for the opportunity to borrow money from them.

You can typically choose from between two types of interest rates: fixed-rate and variable rates.

Fixed-rate student loans: These types of loans offer an interest rate that remains the same throughout the life of the loan. This could give you peace of mind, knowing that the rate won’t change, even if the state of the economy does. Interest rates could fluctuate wildly during the course of your loan, but a fixed-rate won’t be affected. As previously mentioned, federal student loans have a fixed interest rate. Some private lenders also offer student loans with a fixed interest rate.

Variable-rate loans: These types of loans come with an interest rate that can increase or decrease based on market fluctuations. Some private lenders offer student loans with variable interest rates. These are also sometimes called floating-rate loans, because the interest rate can change during the life of the loan.

A variable-rate school loan might start with a lower rate than a fixed-rate loan but keep in mind that your interest rate — and monthly payment — could rise later on. A variable- rate loan can make sense if you plan to pay off your student loan early before rates have a chance to rise too much, expect rates to fall in the future, or you have some wiggle room in your budget in case of rising interest rates.

Student Loan Mistakes to Avoid

1. Failing to Research Your Loans

With any type of student loan, it’s key to understand what you are agreeing to. You’ll want to make sure you understand what the interest rate will be, what your monthly payment will be, when you’ll need to start repayment, and how you plan to cover that obligation.

2. Borrowing Too Many Loans

It’s nice to be approved and accepted, but too many loans (borrowing more money than you actually need) can lead to a heavy financial burden after graduation. Generally, you’ll want to use any college savings, financial aid, and federal student loans before looking to private student loans (which tend to come with higher interest rates than federal student loans). If you’ll need to take on significant debt to attend a certain school, you might consider choosing a less expensive institution.

3. Not Having a Plan

Life can be unpredictable. The one thing you could have power over is your school loan repayment plan. It’s important that you know exactly when your student loan repayment plan starts (in some cases, that could be before you graduate), and exactly what your monthly payment will be.

It can also be helpful to set up a budget that accounts for all of your college costs, including tuition, books, room and board, food expenses, and anything else related directly to your education. If you budget for it ahead of time, you can help make it easier to use your student loan money wisely.

4. Not Realizing That Interest Continues Accruing

Understanding how and when interest accrues on your student loans is critical. For many student loans, interest will accrue while you are in school and during your grace periods. (A grace period is the period of time after you graduate or drop down below half-time attendance, during which you are not required to make payments.)

With the exception of subsidized federal student loans, interest will continue to accrue even if you are not making payments on your student loan. It will then typically be capitalized. Capitalization occurs when the accrued interest is added to the principal balance of the loan (the original amount borrowed). This new value becomes the balance on which interest is calculated moving forward.

Repaying Your Student Loan

Another important factor is understanding what repayment plans are available to you based on the type of loan you borrowed.

Repaying Federal Loans

For Direct Subsidized and Unsubsidized Federal Loans, students who are enrolled in school at least half-time aren’t required to make payments on their student loans. On these loans, repayments officially begin after the loan’s grace period.

Federal loans typically have a six-month grace period after graduation, which allows you time before you have to start repaying your loans. It’s important to note that even though you may be granted a grace period, depending on the loan you have, you may still be responsible for paying the interest on the loan during the time you are not making payments.

Note that PLUS Loans require repayments as soon as the loan is disbursed (or paid out).

Borrowers who take out a new student loans on or after July 1, 2026 will have access to the following federal repayment plans:

•   Standard Repayment Plan On this plan, monthly payments are a fixed amount and the repayment term can range from 10 to 25 years depending on the loan amount. For example, loan balances under $25,000 have a 10-year repayment term (120 monthly payments), while balances between $25,000 and $49,999 have a 15-year repayment term (180 monthly payments).

•   Repayment Assistance Program (RAP) This new income-driven repayment plan will replace existing income-driven repayment plans starting in July 2026. Under RAP, monthly payments range from 1% to 10% of a borrower’s adjusted gross income over a term of up to 30 years. At that point, any remaining debt will be forgiven.

With private student loans, the repayment terms are determined by the lender. That schedule will tell you exactly when your first payment is due and how much you will owe.

Unlike federal loans, many private loans have to be paid back before you graduate, so be sure to review your agreement closely and know exactly what you are going to need to do. Contact the lender directly if you have any questions.

If Repaying Loans Becomes a Problem

Nobody plans on not paying back their student loans, but sometimes life can throw a few financial punches that you weren’t expecting. A smart strategy if this were to happen to you: Face the problem head-on.

Options for Federal Student Loans

If a borrower is struggling to make payments on their federal student loans, they may consider changing their repayment plan. Federal loans, as mentioned, offer an income-driven repayment option which ties the monthly payments to the borrower’s income. This can help make monthly payments more manageable.

In cases when even income-driven repayment is too much, borrowers may be able to apply for forbearance, which allows them to pause payments due to financial difficulties or changes in employment. Keep in mind that if you get a forbearance, you’re still responsible for the interest that accrues while you’re not making payments.

Students who take out federal student loans before July 1, 2027 also have access to loan deferment. This is similar to forbearance except that with some types of loans (including Direct Subsidized loans), you are not responsible for the interest that accrues during a deferment.

Options for Private Student Loans

Private lenders are not required to offer the same repayment plans or borrower protections (like forbearance and deferment, mentioned above) as federal student loans. Some private lenders may be willing to work with you during times of financial difficulty so that you can continue making payments. Check in directly with your lender to see what payment plans or options they may have available to you.

A Note on Student Loan Default

After a certain number of missed payments (which can vary depending on whether you have borrowed a federal or private student loan), your loan may enter default. That can have serious financial consequences, such as impacting your credit score.

Declaring bankruptcy generally won’t rid you of your federal student loan obligations. It is extremely challenging to get student loans (federal or private) discharged in bankruptcy.

What to Do if You Don’t Get Enough Federal Loans

Federal loans are just one source of funding for college. Here are some other ways to cover your education costs.

Scholarships

Scholarships do not typically have to be paid back. If you’re not sure where to begin your scholarship search, you might ask your high school guidance counselor for recommendations. An online scholarship search tool can also be helpful.

In addition, you may want to try local community and civic organizations, as well as businesses and religious groups. You can also ask about scholarships in your college’s financial aid office.

You can also try scouting scholarships based on a certain skill or talent: music, writing, sports, and even academics. Qualifying for multiple small scholarships could add up and go a long way toward helping ease your financial burden.

Grants

Grants for college work like scholarships in that you typically don’t have to pay them back. They are often offered by the federal government (and would be part of your federal aid package); in some cases, in exchange for a grant, you agree to work in a certain field for a set period of time after graduation.

Work-Study

Through the Federal Work-Study program, you can earn money to put toward school expenses by working jobs around your college’s campus. If you are approved for work-study, it will be included as a part of your financial aid award. Then, you may need to apply for jobs that are part of the program. These jobs may be on- or off-campus.

If you can’t find a work-study job to fit your schedule, there may be other part-time job opportunities available off-campus. You could inquire about part-time work at your on-campus career services office.

Private Student Loans

As mentioned, a private student loan may cover the remaining tuition costs not covered by your federal financial aid package. Qualifying for these loans typically requires a credit check, and your credit history can potentially affect your private loan interest rate. For undergraduates with little-to-no credit applying for private student loans, they may benefit from applying with a cosigner in order to qualify for a more competitive rate.

As another reminder, private loans are not required to offer the same benefits or borrower protections afforded to federal student loans. As a result, most students only consider private student loan options after all other sources of aid and funding have been carefully evaluated.

The Takeaway

When it comes to student loans, federal student loans should generally be your first choice since they often have lower interest rates and offer more borrower protections than private loans. Completing the FAFSA is the gateway to these opportunities and it’s worth submitting even if you’re unsure about qualifying for aid.

Understanding how student loan interest accrues and when you’ll have to begin making payments, along with only borrowing what you truly need, can help you avoid being weighed down by student debt.

Also don’t overlook other sources of funding such as scholarships, grants, and work study programs, which can help reduce the amount you need to borrow.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What is the $5,500 student loan?

The $5,500 student loan usually refers to the maximum annual amount first-year undergraduates can borrow through the federal student loan program. For dependent freshman, the borrowing limit is $5,500, of which no more than $3,500 can be subsidized (which means the interest is paid by the government while you’re in school). Independent students and upperclassmen may qualify for higher limits.

At what age does FAFSA stop using parents’ income?

Generally, the Free Application for Federal Student Aid (FAFSA®) relies on parental income until you are 24 years old. At that point, you are considered an independent student and your parents’ income is no longer a factor in determining your financial aid eligibility. However, students may be considered independent before age 24 if they are married, graduate students, have dependents of their own, veterans, or meet other specific criteria.

Do parents who make $120,000 still qualify for FAFSA?

Yes, families earning $120,000 can still qualify for FAFSA®, since FAFSA is an application for federal student aid and has no specific income cutoff. While families with higher incomes may not qualify for need-based grants like Pell Grants, students can still receive federal loans and possibly work-study. In addition, many colleges require FAFSA for both need- and merit-based scholarships.

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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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Setting financial goals is one of the most important steps you can take toward building a secure and stress-free future. Without clear goals, it’s easy to spend impulsively, fall into debt, or miss out on opportunities to build wealth. Whether you’re saving for a vacation, trying to get ahead of debt, or preparing for retirement, a well-structured financial plan can help you stay focused and motivated.

What follows is an essential guide to financial goals — from understanding their importance to setting achievable milestones and adjusting your plan when life changes.

What Are Financial Goals and Why Are They Important?

Financial goals are specific money-related targets you set to guide your financial decisions. They give you direction and help you align your daily spending habits with long-term priorities. Instead of letting money just come and go from month to month, you create a roadmap that leads you toward stability, independence, and growth.

Goals are also important because they provide:

•   Clarity: They help you understand what you’re working toward.

•   Motivation: Defined goals encourage you to save instead of overspend.

•   Control: They prevent financial stress by giving you a sense of purpose.

•   A way to track progress: Goals let you measure how far you’ve come.

Without goals, money has a tendency to slip through the cracks. With them, you can make strategic decisions that improve your financial health step by step.

💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.

Types of Financial Goals: Short-, Mid-, and Long-Term

Financial goals depend on timeframes and priorities. Generally, they fall into three categories — short-, mid- and long-term goals.

Examples of Short-Term Financial Goals (1-3 Years)

Short-term goals are immediate priorities. They include the things you want to buy or do within the next few months or years, and help build momentum for bigger challenges. Examples include:

•   Building an emergency fund

•   Paying off a credit card balance

•   Saving for a vacation or holiday gifts

•   Creating a monthly budget and sticking to it

•   Setting aside money for a new laptop or phone

Examples of Mid-Term Financial Goals (3-10 Years)

Mid-term goals take more time and planning and act as a bridge between short-term wins and long-term security.

They often involve saving or investing for significant life milestones and might include:

•   Paying off significant debt (such as student loans)

•   Saving for a wedding or dream vacation

•   Saving for a down payment on a house

•   Funding a large-scale renovation

•   Growing an investment portfolio

Examples of Long-Term Financial Goals (10+ Years)

Long-term goals shape your financial future and often require consistent commitment. These goals can seem intimidating, but breaking them into smaller steps makes them achievable. Common long-term goals include:

•   Saving for retirement through 401(k)s, IRAs, or pensions

•   Paying off a mortgage completely

•   Funding your children’s college education

•   Achieving financial independence or early retirement

•   Building generational wealth through investments

Recommended: Savings Goals by Age

How to Set Financial Goals in 5 Steps

Now that you understand the different types of goals, here’s how to set them effectively:

Step 1: Understand Your Current Financial Health

Before setting goals, it’s important to have a clear picture of where you currently stand. You can do this by gathering the last several months of financial statements and then using them to determine:

•   Your average monthly income

•   Your average monthly spending

•   Current debt balances

•   Status of your emergency savings and retirement accounts

This assessment forms the foundation for realistic goal setting.

Step 2: Define What You Want to Achieve

Once you have a snapshot of your overall financial situation, it’s worth spending some time reflecting on your money goals: what is really important to you.

While there are many things people commonly save for, like a down payment on a house or retirement fund, your financial goals might not be the same as your sibling’s or your coworker’s.

Think about what you would like to accomplish in the next few years, in five or so years, as well as decades from now, and simply jot them down. Keep in mind that these goals aren’t set in stone — they can and likely will change over time.

Step 3: Make Your Goals S.M.A.R.T.

A vague goal like “save money” is hard to stick to. Instead, consider using the S.M.A.R.T. framework:

•   S for Specific: Be clear  about what you want to achieve, such as exactly what you want to save or how much you’ll need to pay off a debt.

•   M for Measurable: Assign real numbers to your goals. Measurable goals allow you to track your progress and monitor your success.

•   A for Achievable: Setting unrealistic expectations can lead to frustration and disappointment. Ensure your goals are realistic for your income and expenses.

•   R for Relevant: Make sure your goals align with your overall financial plan and your life priorities.

•   T for Time-based: Set a deadline (e.g., within 10 months) for each goal.

SMART goals help keep you accountable and focused.

Step 4: Create a Budget That Includes Your Goals

Your budget is the tool that makes your goals achievable. And thanks to Step 1, you already know your average monthly income and expenses. The next step is to decide if your current spending aligns with your goals, or if you need to rejigger your spending to free up more funds for saving.

There are many different types of budgets, but one popular framework is the 50/30/20 rule. This divides your take-home income into three categories:

•   50% for needs (housing, food, utilities)

•   30% for wants (entertainment, travel)

•   20% for savings and debt repayment

“Thinking about where to put your 20% savings each month can help you reach your goals,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “High-yield savings accounts, money market accounts, certificates of deposit, and cash management accounts are all vehicles that may pay more interest than a traditional savings account, helping your savings grow.”

Step 5: Track Your Progress and Stay Flexible

Once you’ve set some goals and established a budget, it’s a good idea to track your spending for a few months to make sure you are sticking to the plan.

You can track your spending with plain old pen and paper or a computer spreadsheet, but a simpler option is to put a budgeting app on your phone. Your bank may even offer a free tool that automatically tracks and categorizes your spending in real time.

If you find that your budget isn’t realistic, or your financial situation changes at some point, you may need to make some adjustments to your budget. That’s why it’s important to check in with your money regularly.

Common Financial Goal Examples

Here are some six popular financial goals you might include on your list:

1. Build an Emergency Fund

Whether you’re easily covering your monthly expenses or grabbing change from the bottom of your bag to buy a coffee, many people are living paycheck to paycheck. But what if that paycheck disappeared or if you had a large, unexpected expense? Enter the emergency fund.

Having an emergency fund can help you comfortably manage an unexpected medical bill, major car or home repair, or a sudden loss of income with having to run up high-interest debt.

A general rule of thumb is to have three to six months’ worth of living expenses set aside for emergencies. While that can be a sizable sum, keep in mind that you don’t have to build your back-up fund overnight. You might first set a short-term goal of saving a small cushion of $1,000, then build from there.

Recommended: Emergency Fund Calculator

2. Pay Down High-Interest Debt

High-interest credit card debt can feel like a treadmill: Despite constant effort, you never seem to get any closer to the finish line. By prioritizing repayment, however, you can make real progress. This will free up cash flow you can then redirect towards savings and investments.

Two popular payoff approaches are the debt avalanche (paying off the highest-interset debt first) and the debt snowball (paying off the smallest balance first to build momentum). Whichever you choose, the key is to consistently make extra payments and avoid new debt along the way.

3. Start Saving for Retirement

Most of us know we should be saving for retirement, but making it happen can be challenging when there are so many competing places to put our money. The good news is that even small contributions to a retirement account can grow to significant savings over time. This is largely due to the magic of compounding returns — when the returns you earn start earning returns on their own.

One rule of thumb is to save at least 15% of your pre-tax income each year, including any employer match. If that’s not feasible right now, try to contribute at least up to any employer match (otherwise you’re leaving free money on the table).

4. Save for a Down Payment on a House

For many people, owning a home is a major milestone and a symbol of financial stability. But buying a home often requires a significant down payment, typically ranging from 3% to 20% of the purchase price. Saving for this can feel overwhelming, but breaking it into smaller milestones makes the goal achievable.

Consider opening a dedicated high-yield savings account for your down payment fund so it remains separate from everyday spending. Or, if your bank offers savings vaults, you might create a sub-savings account within your main one earmarked for your down payment. Then automate contributions to this account or vault so it grows over time.

💡 Quick Tip: Most savings accounts only earn a fraction of a percentage in interest. Not at SoFi. Our high-yield savings account can help you make meaningful progress towards your financial goals.

5. Invest for the First Time

Investing allows your money to work for you, building wealth beyond what traditional savings accounts can provide. While investing might seem intimidating at first, starting small is often the best approach. Low-cost options like index funds, exchange-traded funds (EFTs), or robo-advisors make it easier than ever to get started without needing extensive financial knowledge. As your income grows, you can increase contributions and diversify your portfolio.

6. Pay Off Student Loans

Student loans are a reality for millions of people, and paying them off can take years. Carrying this debt affects your ability to save, invest, and even qualify for other financial opportunities like a mortgage. That’s why making a structured repayment plan is so important.

Start by reviewing your repayment options — federal loans may offer an income-driven repayment plan or refinancing opportunities. Making extra payments towards the principal when possible can reduce the overall interest you pay and shorten the repayment timeline.

Financial Goal Examples for Students

Students often juggle limited income with rising expenses, making financial goals essential. Here are some practical ones to consider:

•  Creating and sticking to a monthly budget

•  Building a small emergency fund (even $500 helps)

•  Paying off credit card balances in full each month

•  Saving for textbooks or tuition payments

•  Beginning to invest through a low-cost brokerage app

•  Applying for scholarships or part-time jobs to reduce student loan reliance

Setting goals early can help students avoid financial pitfalls and build healthy habits for adulthood.

How to Adjust Your Financial Goals if Your Circumstances Change

Life rarely goes exactly as planned. You might face job loss, medical expenses, or unexpected windfalls like a bonus or inheritance. When your circumstances shift, it’s important to:

•  Reevaluate your priorities: Decide which goals still matter most.

•  Adjust timelines: You may be able to shorten a deadline or you might need to extend one or more of your timelines.

•  Reallocate resources: If money is tight or your priorities change, you may want to shift money from one goal to another.

•  Stay flexible: Remember, goals are not fixed — they evolve with your life.

The Takeaway

Setting financial goals isn’t about perfection — it’s about progress. By understanding your current financial health, defining clear objectives, and using the SMART framework, you can create a roadmap toward stability and success.

Whether you’re saving for your first emergency fund, tackling debt, or planning for retirement, goals can give you the motivation and direction you need to take control of your financial future. The key is consistency. Start small, stay flexible, and remember that every step forward brings you closer to your near- and long-term aspirations.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

Is it wise to invest your emergency fund?

Generally, it’s not wise to invest your emergency fund in risky assets like stocks or mutual funds. An emergency fund should remain easily accessible and safe, since its purpose is to cover unexpected expenses or a sudden loss of income. Keeping it in a high-yield savings account or money market account balances safety with some interest growth. Once your emergency fund is secure, you can focus on investing other money for long-term goals.

What is the most important financial goal?

For many people, the most important financial goal is to build a strong foundation of financial security. This typically means creating a healthy emergency fund and paying down high-interest debt. Without stability, it’s difficult to make progress toward other goals like saving for retirement, buying a home, or investing.

Once your essential safety net is in place, you can prioritize goals that align with your lifestyle and values, such as long-term wealth building, financial independence, or providing for your family’s future.

How many financial goals should you have at once?

It’s often best to focus on a manageable number of goals (such as two or three) at one time. Trying to juggle too many can spread your money and attention too thin, making it harder to make meaningful progress. A practical approach is to prioritize one short-term goal (like building an emergency fund), one medium-term goal (such as saving for a car or vacation), and one long-term goal (like retirement savings). This balance helps you stay focused while still moving forward in multiple areas.

What is a good financial goal for a beginner?

A great financial goal for beginners is starting an emergency fund. Even saving a small amount, such as $500, can provide a cushion against unexpected expenses and reduce the need to rely on credit cards or loans. Once that’s established, beginners can aim to save three to six months of living expenses. Other beginner-friendly goals include paying off small debts, creating a realistic budget, or setting up automatic savings. These goals build confidence and establish strong money habits for future success.

How can I set financial goals with a partner or family?

Setting financial goals with a partner or family starts with open communication about values, priorities, and long-term dreams. Begin by discussing shared goals, such as buying a home, paying off debt, or saving for children’s education. Next, agree on a budget and assign responsibilities for managing finances to ensure accountability. Regular check-ins help you stay on track, celebrate progress, and adjust goals as life circumstances change.

What tools can help me track my financial goals?

Several tools can make tracking financial goals easier and more organized. Budgeting apps like YNAB, GoodBudget, or PocketGuard allow you to set savings targets and monitor spending. Spreadsheets are another customizable option for tracking progress. Many banks also offer built-in goal-tracking features through their mobile apps.

For long-term goals, investment platforms often provide dashboards showing growth toward retirement or wealth-building objectives. The key is choosing a tool you’ll use consistently, helping you stay motivated and accountable.

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College can be expensive, and beyond tuition and room and board, you’ll also need to buy quite a few things to set up your dorm room. This can include everything from fun bedding and artwork to mundane items like power strips and bath caddies. Fortunately, there are ways to save money on dorm room essentials without sacrificing on style, function, or comfort.

What follows are smart college shopping tips and tricks that will help you set up your room without breaking the bank.

Tips to Save Money Shopping for Dorm Room Essentials

If you are looking to save when it comes to college dorm shopping, here are some helpful tips.

1. Research Your Dorm

Before going dorm room shopping, look into how big your dorm room is and what furnishings are provided by the university. Then, you’ll have an idea of what you need to buy and can avoid spending money on things that you’ll have when you get to the dorm.

2. Check Out the Dorm Room Rules

It’s also important to find out the rules for your dorm room. For instance, perhaps your college won’t allow you to have candles or incense burning in your room, or it won’t let you bring a microwave. You’ll know not to purchase these items because they are forbidden.

3. Don’t Buy Too Much

Dorm rooms are (often) tiny. When looking into how to shop for your college dorm, less is generally more. Avoid buying oversized items and don’t feel like you need to get every single item on those “college dorm essentials” lists.

Think of the things you already use in your daily life and use that as a guide for what you’ll need in college. If you find there is something you’re missing when you arrive, you can always pick it up after move-in day.

4. Create a College Dorm Checklist

Make a comprehensive list of what you need before you start shopping. When you’re in the store, don’t be tempted to spend just because something is cute or it seems like you’ll absolutely need it. You typically need much less than you think.

5. Take Inventory of What You Have

You may already own a bunch of things you need for your dorm room, such as a shower caddy or a small fan. Go around your room at home and take inventory of what you have so you can decide what to buy.

6. Assess the Laundry Situation

Before you purchase a laundry basket or bag, you may want to find out where the washing machines are located — are they in your dorm or across the quad? Based on the answer, you might choose a laundry bag over a basket or vice versa, and can avoid buying the wrong thing (and wasting money).

7. Use Coupons

Look for coupons in your local circulars as well as online when determining what to buy for college dorms. Check out coupon websites like RetailMeNot and Coupons.com, or use a browser extension like Honey to snag the best deals.

8. Shop at Discount Stores

Why pay full price when you can go to a discount store and find exactly what you need for less? Check out places like Ross, HomeGoods, Marshalls, or Dollar Stores for deals on college shopping needs.

9. Look for All-in-One Sets

Complete sets — such as bed-in-a-bag, towel, dish, and toiletry sets — are often an excellent value compared to buying each item individually. Sets also make packing easier, since everything is essentially already packed. Just make sure you actually need everything (or most) of the items included in the set.

10. Sign Up for Target Circle

Another retailer that has a wide selection of items for dorm rooms is Target. People who sign up for their rewards program, Target Circle, can receive exclusive access to special discounts and promotions.

Recommended: How to Save Money in College – 20 Ways

11. Use Amazon Prime

Students can get a significant discount on an Amazon Prime membership, plus possibly discounts on flights and free food delivery. You’ll also receive fast, free delivery on all your college dorm essentials.

12. Use a Cash-Back Credit Card

If shopping with a credit card, use one that offers cash back. If you are searching for a credit card, try to find one that has no annual fee and a welcome bonus.

13. Don’t Buy the Cheapest Stuff

While it may be tempting to buy the cheapest dorm room items possible, buying flimsy things that will need to be replaced may not be cost-effective. Items will need to be sturdy enough to last you over the next four years or so. Even if you have to pay a little more up front, it’s going to be worth it if your stuff actually lasts until graduation.

14. Leave the Printer at Home

Some colleges offer free printing services as part of tuition. If that’s the case at your school, don’t worry about buying a printer.

15. Shop the Sales

Consider shopping when stores are running sales. This could be on shopping holidays like Labor Day and the Fourth of July, or in August when college kids are getting ready to head back to school.

16. Don’t Fall for the “Great for Dorms” Tags

Be wary of items labeled as ideal for dorms. These may be marked up, and it may be possible to find a less expensive counterpart that isn’t necessarily marketed for college dorm rooms.

17. Do Price Matching

Look into the prices of products at different stores to make sure you’re getting the best deal. If you find a lower price at another store, ask your preferred store if they will match the other deal. Many will.

18. Use Your College ID for Discounts

If you already have your student ID, you may be able to snag some bargains on college dorm essentials from some local stores. Keep your ID on you at all times when you’re out and about and shopping for the school year.

Recommended: 10 Money Management Tips for College Students

19. Create a Budget

Come up with a budget for your college dorm checklist and then stick to it. When you go shopping without a set college shopping budget, you could end up spending way too much.

20. Look for Hand-Me-Downs

Did your siblings go to college? How about your friends? They may have dorm room essentials they’re no longer using and would be happy to give them to you. Ask around and see if they have anything they’re willing to pass on before you spend money.

21. Check In With Your Roommate

If you coordinate with your roommate on things you need to buy, you can save money. For instance, maybe they’re willing to buy some cleaning supplies if you provide snacks or bring a vacuum.

Recommended: College Freshman Checklist for the Upcoming School Year

22. Try Thrift Stores

Check out your local thrift stores and hunt down bargains on dorm room essentials.

23. Buy on Facebook Marketplace

You can also find deals on Facebook Marketplace. Log on and search for deals near your home or college, or find sellers who are willing to ship your dorm room essentials to you. Proceed with caution, however, to avoid scams like the overpayment ploy.

24. Use Craigslist

When figuring out what to buy for college dorms, you might also check out Craigslist for local items for sale. Don’t be afraid to haggle to pay the prices you can actually afford for your college dorm stuff.

25. Shop With Cash Back Websites

Take a look at sites like Rakuten or Upromise that allow account holders to earn rewards on purchases. You can shop for dorm room items and earn cashback or other rewards on the items you were already planning to buy.

26. Use Gift Cards

Did you receive gift cards from family members and friends when you graduated from high school? Then put them towards your college dorm checklist so you don’t have to spend your own money on items.

27. Start a Registry

Your family and friends may want to contribute and purchase some of your dorm room essentials for you. Stores like Walmart and Target make it easy to start a college dorm registry or wish list you can share with your loved ones.

28. Look for Free Shipping

Look for free shipping to avoid expensive shipping costs. If you’re going to college far away from home, double check that the stores you are ordering from offer free shipping to that location.

29. Wait to Shop

If you’re on the fence about some purchases, wait until you move into the dorm. This way you can avoid spending money on something you won’t actually use.

30. Rent Instead of Buying

Sometimes, colleges will offer you the chance to rent bigger ticket items, like a minifridge, for your dorm room. If you price it out, you may find this is cheaper than buying the item, especially if you split the rental cost with your roommate.

31. Shop With Friends

You might want to get a group of friends together to go shopping together. You can share tips and possibly get better deals by purchasing in bulk and splitting up what you buy.

32. Sign Up for Stores’ Email Lists

Stores send coupons, sale alerts, and more out to their mailing lists. Consider signing up for the mailing list for stores at which you plan to do a considerable amount of dorm room shopping.

33. Set Up Price Alerts

You can set up price alerts through tools like CamelCamelCamel, an Amazon price tracker, to find out when college dorm stuff is going on sale so you know when to purchase it.

Bonus Tip: Best Places to Buy College Stuff

When shopping for college dorm stuff, where you shop can have a big impact on how much you spend, whether you’re shopping online or in person. Here are a few stores that offer a variety of dorm room essentials, typically at competitive prices:

• Amazon

• Target

• Walmart

• Overstock

• Wayfair

• HomeGoods

• Marshalls

• TJ Maxx

• Ross

• The Container Store

• The Dollar Tree

• IKEA

Paying for College

Shopping for college dorm room essentials can feel overwhelming, but things like making a list, creating a budget, shopping online with free shipping, and taking advantage of student discounts can help make it more manageable, and more affordable.

Another way to help with college expenses is to take advantage of any financial aid you are eligible for. You apply for aid simply by filling out the Free Application for Federal Student Aid (FAFSA) each year. Your financial aid package may include grants, scholarships, work-study, and federal loans, which can be used for tuition as well as other college expenses.

If you still have gaps in funding, you might also look into private student loans. These are available through banks, credit unions, and online lenders. Rates may be higher than federal loans, but you can often borrow up to the full cost of attendance. Just keep in mind that private loans may not offer the borrower protections — like income-based repayment and deferment or forbearance — that automatically come with federal student loans.

The Takeaway

To make setting up your dorm room as affordable as possible, understand room dimensions, forbidden items, and what your roommate is bringing in advance. Then try tactics like renting items, bringing furnishings from home, splitting bulk items with roommates and friends, and using coupon codes and cash-back tools to minimize the cost.

College can be expensive, so looking into grants, scholarships, and federal and private student loans can help you fund your education.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

How much should you spend on dorm room supplies?

The amount spent on dorm room supplies can vary tremendously from student to student and campus to campus. However, U.S. News & World Report recently cited a study saying the average is around $750.

How much is too much stuff to bring to college?

While there’s no definitive answer to how much stuff is too much to bring to college, conventional wisdom says that most students can get by with one-third of the amount of clothing and furnishings they actually bring. Remember, dorm rooms tend to be very small.

What to do if you overpack for college?

If you overpack for college, you might consider sending some items home, renting a small storage unit near campus to hold the excess, or selling or donating things you don’t need.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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College life is about getting a great education, exploring interests and activities, and forging your own adult identity. It’s also a perfect time to establish some good money habits that will set the scene for financial success today and tomorrow.

From developing a budget to opening bank accounts, there are ways you can make your money work harder for you over time so you can achieve your goals.

Read on to learn the 10 best strategies for good money management for college students.

Why Learning to Manage Your Money in College Is a Superpower

As a student, you’re at a key point in your life where you’re taking charge of your finances, perhaps for the first time ever. Learning the skills and knowledge you need to make informed decisions about your money — something known as financial literacy — is important now and in the future. It can help you save more, spend wisely, and avoid too much debt. Being financially savvy can also help manage your student loans and choose the bank accounts and credit cards that make the most sense for you.

The financial moves you make as a college student can set you up to build wealth and reach your financial goals in your twenties, thirties, and beyond. This includes buying a car, renting an apartment, putting a down payment on a house someday, and saving for retirement.

10 Essential Money Management Tips for College

Here are 10 financial tips for college students that can help you spend less and save more during and after school.

1. Create a Simple College Budget That Actually Works

Budgeting may sound complicated, but making a budget is simply a matter of figuring how much is coming into your bank account each month and how much is going out, and then making sure the latter doesn’t exceed the former.

To get started, list all of your sources of income, such as from a part-time job or family contributions.

If you are living off a fixed amount of money for each semester, say from summer earnings, you may want to divide this lump sum by the number of months you need to make the money last.

Once you know how much you have to live on monthly, make a list of regular expenses that you will be responsible for paying, such as your cell phone or a car payment, or maybe rent if you live off campus.

Next, you’ll want to subtract your fixed expenses from your monthly income. This will give you the amount you have left over to cover variable and discretionary expenses, such as eating out, buying clothes, and entertainment. You can then come up with target spending amounts for each category.

Doing your best to stay within these spending limits can help ensure that your money lasts until the end of the semester, and help you avoid running up costly credit card debt.

2. Open a Student-Friendly Bank Account (like SoFi)

You might feel like you don’t have enough income to start saving money yet, but even just putting a small amount in the bank regularly can add up over time.

You can open a checking account as a place to start saving. If you’re able to set aside $50 a month, you could soon have a decent sum. And if you have a part-time job, your paycheck can be directly deposited into your account. That way you won’t be tempted to spend it.

Being diligent about saving money each month can help cultivate a habit that will serve you later when you can afford to save more for your future goals, including retirement.

As you’re choosing a bank, you may want to look for one with an ATM near you for convenience and to avoid out-of-network fees. For example, with a SoFi checking account, you’ll have fee-free access to more than 55,000 ATMs worldwide.

3. Build Your Credit Score Responsibly With a Credit Card

When you open a bank account, you’ll likely also apply for a debit card to make managing your financial transactions easier. But don’t forget about a credit card for convenience, as a backup for emergencies and to start building a credit history.

But don’t overdo it. To manage finances in college, use your credit card only when you need it. Pay off your debt in full each month, otherwise you could end up paying a high-interest rate on the balance, which can make it even harder to pay off.

Using your credit card responsibly by making small purchases and paying off the balance in full can help you build your credit.

4. Start a Small Emergency Fund for Unexpected Costs

Life can be unpredictable and having a financial safety net can help protect you from costs that pop up — if your car breaks down or you’re facing a sudden (and costly) medical procedure, for example. That’s why it’s important to start an emergency fund or back-up savings fund as a critical part of your long-term financial health.

Having an emergency fund can help keep you from having to rely on credit cards to get through a financial challenge.

How much you should put aside for emergencies each month is up to you and your financial situation. Many financial professionals recommend saving at least three to six months’ worth of expenses. But it’s better to have a small fund than not to have a fund at all. The key is to start saving something each month, no matter how small the amount may seem.

When building your emergency fund, it’s a good idea to fund the account regularly if you can. Consider setting up an automatic transfer to your savings so you don’t have to think about it.

Ideally, your emergency fund should be in a separate savings account so you won’t be tempted to spend the money on something else.

5. Understand How Your Student Loans Work

A crucial part of money management for college students is understanding how your student loans work and what’s required to repay them. Familiarize yourself with the types of loans you have (federal and/or private), and then take a look at how the interest on each loan is handled. For example, if you have federal Direct Subsidized Loans, the interest is covered for you while you’re in school. With federal Direct Unsubsidized Loans, however, you are responsible for all the interest that accrues — even while you’re in school — and it accrues daily, meaning it can build up significantly over time. For this reason, you may want to make interest-only payments on your loans while you’re in school, if possible.

You can find information about your loans by logging into your account at StudentAid.gov. There, you’ll see the different loans you have, how much you owe, the interest rate of each, and who your loan servicer is.

While you’re at it, start exploring the different options for repayment, so you can get started without a hitch when the time comes. Many changes are coming to student loans as part of the big domestic policy bill that was signed into law in July 2025, so it’s a good idea to study up on the options now.

6. Find Ways to Earn Extra Income On Campus or Online

There are a number of side hustles for college students that can help you earn some extra cash. For instance, you could become a tutor and help other college students learn a subject in which you excel. Or you could pet-sit on evenings and weekends or do lunchtime dog walking (as long as you don’t have class). Other potentially lucrative side hustles include becoming a ride share driver or delivering food and groceries for a company like DoorDash or Instacart.

A side hustle can be flexible so you can fit it around your class schedule. You can also set your own hours for the most part, unlike a more traditional job. You can use some of the money you earn to cover your daily expenses and then put the rest into the bank to build your savings.

7. Master the Art of Saving on Everyday Expenses

Financial tips for college students include saving money on the daily expenses that can add up over time. Take eating out. You may get tired of cafeteria fare. At the same time, you don’t want to blow your budget on eating in restaurants every weekend. If you have access to a kitchen, consider purchasing ingredients from your local supermarket and putting together some simple, tasty meals, instead of eating out. This can be a good way to save money on food.

Another idea to stretch your money is to find freebies. Facebook has groups where people can post items they no longer want. You might be able to score free clothes, furniture, or room decor. Freecycle and NextDoor also have listings for things that people are giving away.

Finally, rethink some of your major expenses, like textbooks. Buying them new can be costly. Fortunately, there are a number of ways to save on college costs like this. One option is to buy up-to-date versions of used textbooks whenever you can. Getting the digital version of a book can also yield savings. You could also rent what you need from a third-party bookseller, such as Amazon or Chegg.

Sell any books that you’ve purchased (new or used) that you won’t need again in the future to recoup some of the expense.

8. Use Your Student ID for All It’s Worth

You may think of your ID card only as a form of identification and a way to get into college sporting events. But there are actually additional benefits that come with a student ID, and many can help you save money.

Some businesses, especially those near universities, offer students discounts when they show a student ID card.

Next time you go to the movies, shop for school supplies, go out to eat, or get a haircut, it’s a good idea to ask if they offer any discounts for local college students.

In addition, many national and online retailers, including major clothing, sneaker, and computer brands, offer discounts to college students.

You may also be able to use your student ID to get a better deal on your cell phone plan and streaming services. Make sure to maximize this valuable resource.

9. Protect Yourself From Financial Scams Targeting Students

College students who are on their own for the first time and learning how to manage their money can be prime targets for scammers. In fact, young adults ages 18 to 24 report the second median highest dollar loss to scams after adults 65+), according to the Better Business Bureau’s 2024 BBB Scam Tracker Risk Report.

Some common scams that target college students include:

•   Fake employment offers — students are asked to pay a fee or provide personal and financial information to fill out an “application”.

•   Student loan debt-relief scams — students are contacted by representatives who claim to be from debt relief companies and offer to reduce or eliminate their college debt for a fee.

•   Fake scholarships or grant offers — students receive notice that they’ve been awarded a grant or scholarship they never applied for and are asked to supply their Social Security number or other personal information in order to receive it.

To avoid becoming a victim of a scam, never give out personal information to anyone you don’t know. If you are contacted unsolicited by a person asking for information or a fee or a supposed service they can provide for you, hang up or don’t respond to their text or email. And beware offers that seem too good to be true. Always err on the side of caution.

10. Dip Your Toes Into Investing (Even With Small Amounts)

Investing when you’re young can potentially be one of the best ways to help your money grow over time.

That’s thanks to compound returns, which is when any returns you earn are reinvested to earn additional returns. The earlier you start investing, the more benefit you may gain from compounding.

It’s important to keep in mind, however, that all investments involve some level of risk because the market fluctuates over time.

If you’re interested in investing, you could start small by opening a traditional or Roth IRA and putting a little money from a part-time job into it, or you could opt for an online brokerage account. Either way, even if you invest just $50 a month, you’ll be saving for your future.

A Deeper Dive: How to Build Your Credit in College

Building your credit now as a college student can help you once you graduate. Without a credit history, it can be challenging to take out a loan or get a credit card, among other things. If you’ve already established credit, you’ll likely be able to get your post-college life started more easily.

To help build your credit, get a credit card while you’re in college. Use it judiciously for small purchases and then consistently pay your bill on time and in full each month. This kind of responsible credit card use can help you build your credit history. You’ll need a strong credit history if you want to get the best terms on a car loan, a mortgage, or a student loan for grad school. Your credit can even affect your job prospects and your ability to rent an apartment.

It’s also a good idea to monitor your credit report regularly to make sure it’s accurate. You can get a free credit report annually from the three major credit bureaus. If you spot any errors, be sure to report them right away.

And finally, once it’s time to start making your student loan payments, be sure to make each monthly payment on time and in full. This can help you establish a positive payment history, which can also strengthen your credit.

A Deeper Dive: Making Sense of Your Student Loans

As noted earlier, understanding your student loans and how they work is extremely important. A student loan is a legal obligation and you are responsible for paying what you borrow, plus interest. Staying on top of your loans now, while you’re still in college, can make it easier to manage them.

First, make sure you know what kind of student loans you have. There are federal and private student loans, and they each work differently. Find out the interest rate for each loan and how the interest is handled.

Keep track of how much you’re borrowing with student loans and try not to borrow more than you need. Read the terms and conditions of your loans and make sure you understand them. Keep all your loan documents so you can refer to them when you have questions. Know who your loan servicer is and contact them if you have questions.

And log into your account on StudentAid.gov to make sure all the information on your federal loans is correct and up to date.

Finally, make your monthly student loan payments in full and on time. If you are struggling to repay your loans, contact your loan servicer to see what your options are. For instance, with federal student loans, you may be able to switch to a repayment plan that bases your monthly payments on your discretionary income and family size.

The Takeaway

College can provide a great opportunity to develop the money skills you’ll need after you graduate. By learning basic money management techniques now, you can gain confidence in your ability to handle your finances well after graduation.

In 10 years, you’ll likely thank yourself for putting in the effort to learn how to set and stick to a monthly budget, use credit cards wisely, save and invest money, manage your student loans, and build your credit score.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

How much money should a college student have in savings?

College students should have an emergency savings fund to help cover any unexpected expenses. While financial professionals often recommend having three to six months’ worth of living expenses in an emergency fund, that amount might be difficult for a college student with a limited income. Instead, some financial pros suggest aiming to have $500 or $1,000 in the bank as a college student. To help get there, save regularly. Even if you deposit just $20 in your emergency fund each week, it will continue to grow steadily.

How can I start a budget in college?

One method for starting a budget in college is to use the 50/30/20 rule. Here’s how it works: You allocate 50% of your income to needs (such as bills, rent, and other fixed monthly expenses), 30% to wants (such as eating out or going to the movies), and 20% to saving for your financial goals (such as a down payment on a car or a house, or for retirement). Because the formula is simple, it can be an easy way to manage your money as a college student and after graduation.

Is it a good idea to get a job during my freshman year?

Whether or not it’s a good idea to get a job during your freshman year depends on your unique circumstances and financial situation. A job can help you cover some of the costs of college, but you’ll want to make sure that it doesn’t interfere with your classwork or studies. If you need the income, you may want to consider a flexible part-time job that you can do after classes or on weekends as your schedule allows, such as pet-sitting or tutoring.

What are the most common financial mistakes students make?

Some of the most common financial mistakes students make include overspending, charging too much on credit cards, failing to put money into savings, and mismanaging student loans, including borrowing more than needed. To avoid these mistakes, make a budget so that you don’t spend too much. Also, use credit cards only for small purchases and pay your bill in full each month to avoid accumulating credit card debt. Put money into a savings account regularly. And finally, make sure you know exactly how much you need to pay for college, and don’t borrow more than that in student loans.

What percent of college students drop out because of money?

According to the most recent statistics from the Education Data Initiative, approximately 23% of college students leave school every year, and 41% of college dropouts say they left for financial reasons.

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