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5 Tips to Help College Students Manage Their Finances

Learning how to manage your finances isn't something you're usually taught in high school. Read this expert financial planning to set yourself up for college!

Many students arrive at college feeling lost about how to manage their money and save for the future. This isn’t surprising given that most high schools don’t teach financial literacy or offer students other resources to learn how to manage their finances. The first day of classes will be here before you know it, so now is the perfect opportunity to learn important financial skills like budgeting, building credit, and saving. The skills you develop now will be relevant for the rest of your life, so why not get a head start? Here are five tips to help you successfully manage your finances in college—and for life.

1. Get to know your spending habits

Before you can make any saving, investing, or budgeting goals, you have to know where you stand right now. Start by keeping track of everything you spend money on. Keep all paper and digital receipts and set aside a specific time every week to go over your expenses. Use something to keep track of your spending like a notebook, spreadsheet, or budgeting app. Once you get a sense of how you currently spend your money, look ahead to when you’ll be a college student. There will inevitably be new and recurring expenses like school supplies and textbooks. There are also unexpected college costs you may not have considered like class fees, tech costs, parking, summer storage, and more. Will you be able to sustain your current spending given these new expenses?

In addition, think about how you’ll finance yourself in college. Maybe you’re working a job right now that helps pay for things. Will you be able to continue working that job, or will you need to find a new one once you’re on campus? Becoming familiar with your current spending habits and how they’ll have to change can help you make more conscious spending decisions once you’re at college.

Related: Budgeting Basics for College Students, Plus Example Spreadsheet

2. Start building credit when possible

Building a solid credit score can take roughly seven years, so starting early is good. In fact, even the amount of time you’ve had credit accounts open is factored into your credit score. Having a good credit score will impact your future financial opportunities. This includes but isn’t limited to:

  • Being approved for an apartment rental off campus
  • Taking out a loan for your first car
  • Seeking a loan for a business idea you want to pursue
  • Getting a mortgage for a house

If you do decide to open a credit card or another line of credit, make sure to do your research and have a plan for how you’ll pay it off. Consistently using your credit card and paying off balances every month is the best way to build your credit score. Conversely, using your credit card without paying your entire balance will lead to expensive interest charges—and skipping payments entirely can hurt your credit score.

3. Pay yourself by saving

Saving is important for two reasons. For starters, you never know when unexpected emergencies will happen. One study showed that 40% of Americans don’t have enough savings to pay an unexpected $1,000 bill, and a surprise trip to the ER or your school’s semester fees could easily cost that much. Secondly, saving proactively for major expenses like vacations or study abroad empowers you to avoid using your credit card or taking on more student loans, helping you stay out of debt. The best way to get the most bang for each buck you save is by opening a savings account. These are just like checking accounts, but the difference is that money in a savings account grows through compound interest. Let’s say you deposit $100 on January 1, 2020, to a savings account with an interest rate of 1%. Here’s how your savings would grow:


Interest Rate

Return After 1 Year

Total Savings

January 1, 2021




January 1, 2022




January 1, 2023




Your interest rate will stay the same, but the amount your savings grow increases every year because you continue getting interest on your total savings, which keeps growing because of interest in the first place. While this may not seem like a lot of money at first, the more money you add to your savings, the more you’ll collect interest on—so the more you save, the more money you’ll make.

Related: Real Student Advice to Save More Money in College

Set small goals for your savings to start

The thing about saving is that it becomes easier the more you do it—the same with any habit. That’s why when you’re just starting to save, you shouldn’t focus on a large money target. Instead, focus on the act of putting money aside on its own. It can be as small as setting aside $15 into a separate savings account every month. Include the savings into your budget plan every month as well, and soon you won’t have to think twice about doing it. Even if you don’t have any large expenses coming up, it makes sense to start saving now. If nothing else, a savings cushion can just give you greater peace of mind.

4. Invest in what will save you money

Part of saving is eliminating unnecessary recurring expenses. For example, getting a bike can help save money you’d spend on bus fares and Uber rides. If you love coffee, consider buying a coffee maker—paying $4 for a coffee from Starbucks every day can really add up. Other things like using a reusable water bottle and Tupperware can help save money and also reduce waste. And since you’re buying food storage containers anyway, learning how to cook is an incredibly money-savvy move. It’s much cheaper to feed yourself on a week’s worth of groceries than it is to order out too often. Finally, take advantage of deals and discounts—especially the ones for students. Many local businesses offer discounts to college students, so when you buy your textbooks or other school supplies, check to see if there’s a student marketplace; items there are typically cheaper.

Related: The Best Student Discounts: Food, Clothes, and More

5. Plan for how to earn money in college

The other side of managing your finances, apart from keeping track of expenses, is having a steady source of income. Many students find part-time campus jobs to cover their expenses. If you don’t know where to start, some popular jobs include working in campus cafés, athletic centers, and libraries. On the more academic side, you could try tutoring, notetaking for students who need help, or being a research assistant. Many colleges have bulletin boards where people post job opportunities for students like babysitting, tutoring children, dog-walking, and more, so if you’re still in a pinch, check those! Opportunities you may not be familiar with that could also be found here include research studies that need subjects (usually found more often at universities). Many of these will pay you to be a part of their research, so look for these postings online or on bulletin boards across campus.

Financial literacy is the gift that keeps on giving

Become familiar with your finances now before starting college. Once you’re busy with schoolwork, it’ll be harder to focus on establishing new habits like budgeting and saving. Developing smart money habits now will allow you to come out of college with all the tools you need to successfully manage your finances for the rest of your life.

Need more advice on managing your finances? Search the tag “finances” on CollegeXpress for more money management tricks and financial planning tips.

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About Hao Liu

Hao Liu is the founder and CEO of Boro, a Chicago-based financial technology startup for college students. For more advice on managing money while in college, check out Boro's blog.  


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