As a student, you may be primarily focused on studying and getting a great education.
But college is also an opportunity to develop money management skills that can help set you up for financial success after you graduate.
You may be living on your own for the first time, holding down a part-time job, and also handling bills, along with college loans and/or financial aid.
Setting up some good financial habits now can help ease the financial stress of student life, and also help ensure you leave college in solid financial shape.
10 Tips for Managing Your Money As a College Student
Here are 10 money management tips that help you spend less and save more both during and after college.
- 1. Setting up a Basic Budget
- 2. Opening up a Savings Account
- 3. Buying Used Textbooks (and Selling Yours When Done)
- 4. Using Credit Cards Sparingly
- 5. Building Your Credit Score
- 6. Finding Free Stuff
- 7. Learning to Cook–and Eating out Less
- 8. Starting an Emergency Fund
- 9. Getting the Most out of Your Student ID
- 10. Getting Started with Investing
1. Setting up a Basic Budget
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 making sure the latter doesn’t exceed the former.
To get started, you’ll want to list all of your sources of income, such as from a job or family contributions.
If you are going to be living off a fixed amount of money for each semester, say from summer earnings or money from your family, you may want to divide this lump sum by the number of months you need to make this money last.
Once you know how much you have to live on each month, you’ll want to make a list of fixed expenses that you will be responsible for paying, such as cell phone or car payment, or maybe even rent if you live off campus.
Next, you’ll want to subtract your fixed expense from your monthly spending allotment. This will give you the amount you have left over to cover variable 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. Opening up a Savings Account
You might feel like you don’t have enough income to start saving money yet, but even just putting a small amount away each month can add up over time.
For example, if you’re able to set aside $50 a month now, you may soon have a decent nest egg that can help pay for something fun, like a road trip over the next school break.
What’s more, being diligent about saving money each month can help cultivate a habit that will serve you later when you can afford to save more in your nest egg and also for retirement.
Ready for a Better Banking Experience?
Open a SoFi Checking and Savings Account and start earning 1% APY on your cash!
3. Buying Used Textbooks (and Selling Yours When Done)
Textbooks can be so expensive! Fortunately, there are a number of ways to save money here.
One option is to buy used whenever you can. You’ll want to be sure, however, that you are getting the version the professor wants. If you have an earlier edition, you might struggle to find the content if the book has since been modified. Getting the digital version of a book can also yield savings.
Another option is to rent what you need from a third-party bookseller, such as Amazon or Chegg. You can often rent textbooks for an entire semester for significantly less than buying new, and may even be able to highlight them.
For books that you purchase (new or used) that you won’t need to refer to in the future, consider selling them when you’re done to recoup some of the expense.
4. Using Credit Cards Sparingly
Credit card companies love college students, and many may try to lure you into applying for cards. You’ll want to proceed with caution, however.
While having a credit card as a student can be a good idea–for convenience, as a backup for emergencies, and to start building credit history (more on that below), you’ll want to be careful that you don’t run up credit card debt.
If you charge more than you can afford to pay off at the end of the month, you can end up paying a high-interest rate on the balance, which can make it even hard to pay off.
As a result, it can be easy for college students to find themselves digging a debt hole that can be hard to climb out of.
If you choose to sign up for a new card, you may want to look for a rewards credit card that will let you rack up points you can use to get products or travel perks–and only charge what you can afford to pay back quickly.
5. Building Your Credit Score
A credit score is a three-digit number, typically between 300 and 850, designed to represent your credit risk, or the likelihood you will pay your bills on time.
Building credit might not seem like a priority when you’re still in school, but you’ll need it in the future if you want to finance a car, buy a house, or qualify for the best credit card offers. Your credit can even affect your job prospects and your ability to rent an apartment
One strategy you can use to build up your credit is to use your credit card judiciously. If you make small purchases and regularly pay the balance off in full, you can avoid racking up interest charges but still get that boost to your credit score.
If you have student loans, you may also want to consider making small payments (even just $25 to $50) while you’re still in school to start paying down interest and have some positive repayment history on record.
If you start building your credit score now, you will likely be able to get better deals on lending products like mortgages, car loans, and credit cards in the future.
6. Finding Free Stuff
One highly effective way 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. You can also find free items on Craigslist (you’ll find the “Free” section under the “For Sale” heading on the main page for your city).
7. Learning to Cook–and Eating out Less
You may find you get tired of cafeteria fare and ramen. At the same time, you may not want to don’t blow your budget on eating in restaurants every weekend.
If you have access to a kitchen, you might want to consider purchasing ingredients from your local supermarket and putting together some simple, tasty meals, instead of eating out. This can be a major cost-saver.
If you’re not much of a cook, you may want to go to some food blogs and recipe sites like Allrecipes or Serious Eats to find some easy recipes and watch a few how-to videos. You could also find tons of cooking videos on YouTube.
Having some go-to recipes in your arsenal can pay off now, and also down the line when you’re working and living on your own (and don’t have to rely on expensive take-out or unhealthy fast food for dinner every night).
8. Starting an Emergency Fund
Starting an emergency fund or back-up savings fund is an important part of anyone’s long-term financial health.
Life can be unpredictable, and your emergency fund serves as a safety net that you can fall back on for those “rainy days” where you find yourself facing an unexpected expense or other financial setbacks.
Having an emergency fund can also 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. The key is to start saving something each month–no matter how small the amount may initially seem.
When starting your emergency fund, it’s a good idea to fund the account regularly. Consider setting up an automatic transfer to your savings so you do not have to think about it.
Ideally, your emergency fund should also be set up in a separate savings account so you won’t be tempted to spend the money on something else.
9. Getting the Most out of Your Student ID
You may only think of your ID card as a form of identification and a way to get into college sporting events. But there are actually a number of additional benefits that come with a student ID, and many can help you save money.
You may find that businesses, especially those near universities, will offer students discounts when they show a student ID card.
Next time you go to the movies, shop for school supplies, or get a new haircut, it can be 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.
10. Getting Started with Investing
Investing when you’re young is one of the best ways to help your money grow over time.
That’s thanks to compound earnings, which means that any returns you earn are reinvested to earn additional returns. The earlier you start investing, the more benefit you gain from compounding.
Investing in the stock market also isn’t as complicated as you may think. You can open a retirement account, like a traditional or ROTH IRA, or a brokerage account (for nonretirement investing) online, often with a minimal amount of money.
You may also be able to schedule automatic withdrawals from your bank account to your investment account each month.
It’s important to keep in mind, however, that all investments have some level of risk because the market moves up and down over time.
The Takeaway
College can provide a great opportunity to develop the money skills you’ll need after you graduate.
By learning some basic money management techniques now, you can feel confident about your ability to handle your finances well after graduation.
In 10 years, you will likely thank yourself for putting in the effort to learn how to set–and stick to–a monthly budget, use credit cards wisely, save money, and build your credit score.
Heading off to college soon? SoFi Checking and Savings® can help you start off on the right foot. This online bank account allows you to earn competitive interest, spend and save–all in one account.
And, SoFi Checking and Savings® doesn’t charge any account fees, monthly fees, or many other common fees.
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.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi Money® is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member
FINRA / SIPC . SoFi Securities LLC is an affiliate of SoFi Bank, N.A. SoFi Money Debit Card issued by The Bancorp Bank.
SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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.
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.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
SOMN19015
