40+ Money Tips for College Students

Do you remember the first day of college? I sure do.

I was excited. Or afraid. Or both. The idea of living on my own, hundreds of miles away from my folks and my friends, was daunting. I’d arrived in Pittsburgh just a few days earlier and even took some time to wander around the mostly empty campus of Carnegie Mellon.

It wasn’t a particular large one in 1998, nowadays it’s huge with construction going on all the time. You could walk from one end to the other in about twenty minutes but it was still pretty intimidating. After five years, a few degrees, and a wonderful college experience I left for the wonders of the “real world.”

When I started, I wish I had a list of things I needed to do to stay financially on track. So many of my habits were formed in those first few years of independence and having a list, even just a rough guide, would’ve been extremely helpful. I got out of school in pretty solid financial shape – no credit card debt and a reasonable amount in low-interest student loans.

I first wrote this guide in 2005, just a few short years out of college, when the thoughts were still fresh in my mind. Now, over fifteen years later, I can go back with an eye of experience and really finalize this guide for today.

The Most Important Money Tip

One thing remains true from 2005 — Graduate college with as little debt as you can. 

Debt is a brutal anchor that can hold you back more than anything else. If you follow just this one piece of advice, you will find yourself ahead of your peer group by a wide margin. Student loan debt may be unavoidable but try your hardest to avoid credit card debt at all costs (and keep your student loan debt to the absolute minimum).

Why avoid credit card debt? A $1,000 credit card debt at 18.90% interest will cost you over $200 in interest over the course of 25 months if you pay the minimum 5%, or $50. That’s a lot of numbers to get thrown at you all at once but the point is – it’s very very expensive. You will be paying for things long after you’ve thrown them out.

I reached out to Melissa Sotudeh, a CFP® and Director of Advisory Services at Halpern Financial, and asked her for her top tips for someone who is in college.

She said:

1. Be aware of your cash flow and create a spending plan accordingly.
2. Avoid credit card offers. Using a credit card is good if you have the discipline to pay off each month and understand why this is important.
3. Don’t take out more than is necessary in student loans. In fact limiting loans to an estimated annual first-year salary is a good objective. But absolutely don’t take loans that are used for anything except necessary expense (tuition/room/board).

I really like the “first-year salary” rule but I wanted to know more.

What if someone needs more in loans to attend the school they want?

Melissa said, “The main point regarding loans is to be prudent. For example, going to school to be a social worker or artist (think: low starting salaries) – You would not want to graduate with 6 figure debt. Also, what if you don’t graduate or go into a lucrative field, you want to make sure your debt is manageable. So then we come back to looking at schools from a financial safety perspective. Try to look at school with lower loan levels at graduation; those that are generous with non loan aid. Or try a lower cost school for the first couple of years and then transfer to the one you would like to graduate from.”

I followed up by asking if her advice has changed as a result of the Covid-19 pandemic and it hasn’t: “Pre- and post-pandemic advice must focus on living within your means and avoiding debt.”

There you have it – even the experts agree – avoiding debt is truly the #1 tip.

Second Most Important Money Tip

Have fun.

You will never have this level of freedom (no parents!) and direction (OK, but still go to class), take advantage of it. You will have no problem finding ways to have fun socially but experiment when it comes to your career as well. Investigate different areas, challenging assumptions of what your major should be, really use this time to break out of whatever track you think you should be on to explore other worlds.

Leave your comfort zone and try things you don’t think you’ll like… you may surprise yourself. (just be safe!)

Now, onto the rest of the tips.

Banking & Credit

Let’s establish a strong foundation of banking and credit, the two cornerstones of your financial future.

• Open a bank account: I have a hub and spoke model when it comes to my financial map. The hub, where all the action takes place, is a bank account. I used to recommend a local bank account, because it’s nice to have access to an ATM and deposit checks, but you can go with an online bank with a good app (or a bank specifically for college students). They also will have low minimums ($1) and no fees. Never pay fees.
• Get a credit card: Building your credit is crucial and the easiest way is with a credit card. If you’re not yet 18, wait until you are. Then use it wisely by always paying off the statement every single month. If you don’t think you can use it wisely, set your permanent address as your parents and don’t use it. It’s not as good as using it and paying it off, but it’s better than nothing.
• Stick with just one credit card: You don’t need more than one at this point, you’ll just get tempted by access to what feels like free or cheap money.
• Don’t give out your information unless it’s encrypted. When I was in college, I filled a credit card application on paper. That was so so so stupid. All the information an identity thief would need was on that piece of paper… and it was just put into a stack with the other suckers. Don’t give your information unless it’s going into an encrypted system.
• Use your student loans only on tuition: If you get your student loan put directly into your bank account or some other non-college account, make sure you only spend it on tuition, textbooks, academic fees, room and board, or other similar necessities. Not pizza. Not beer. Not a Playstation.
• Automate your bill payments: Set up a system to pay bills on time and never have to worry about it — you can do this very simply nowadays and it makes sense . This makes the most sense for bills that don’t change much, like your cell phone, and not for those where there may be more variability. I also have bills electronically delivered too, when I can pay the bills myself when I get the email.

Making Money

If you shouldn’t be charging everything to your credit card or spending your student loan checks, where are you going to get money to live?

• Your first job is to graduate: Before you think about taking on a job, remember that you’re paying thousands of dollars (or tens of thousands) each year to go to college. Your job is to graduate. In fact, I’d argue that your goal is to graduate as soon as possible to make the price of college that much cheaper! If you do work, it cannot interfere with your classwork – it’s like trading dollars for pennies. Or rather, paying dollars to earn pennies.
• Look for apprenticeship or networking opportunity jobs: Aim to find positions that will put you into apprenticeship type of roles with experts or professors in your field, to help improve your skills but also improve your professional network. Sometimes you need a paycheck to help make ends meet but if you are fortunate to have the means, try to get an apprenticeship/networking job vs. a strictly paycheck one.
• Look for exploratory type of jobs. The second most important tip was to have fun and explore, so consider jobs in areas you’re fascinated with but may be outside your area of focus academically. (also, I get sometimes you need to make money and for those, I think low stress jobs are the best for college students if your aim is strictly for income)
• Look for jobs that offer personal development: Along the same lines as exploratory, look for a job that will help you with personal development and broadening your horizons. You’re a marine biologist but maybe you want to work in a bakery and see what the food service business is like — it’s unlikely that you will become a baker but the experience will be fun and help you see the world a little differently.
• Try to get letters of recommendation: These aren’t nearly as valuable as they once were but if you take a resume-worthy job, get letters of recommendation from your supervisors if you have any major accomplishments.
• Maaaaaybe, start your own business: In college, I had a lot of time on my hands and I had several small side hustles I used to do including re-selling products on eBay. If you’ve ever had thoughts on starting a business, give it a try because you never know what will happen. Your time, as much as it hurts to say, really isn’t worth much so what do you have to lose? Plus it could be the next Google. (you could always start a blog!)
• Go to job fairs every single year: I think one of the most valuable career building and interview skills is the ability to have a conversation with a stranger without getting stressed out. The best way to do that is to practice – so go to job fairs each year and talk to the folks at the booths. It never hurts to talk and find out what companies are about or what they’re looking for.
• Keep looking for scholarships: Sure, school has started, but that doesn’t mean you shouldn’t keep looking for scholarships, grants, and awards. There are a lot of smaller scholarships with limited competition if you go and search for them.

Saving & Investing Money

If you’re fortunate to be earning a little cash and saving it, you may want to invest it too.

• Saving money matters: Putting away a few dollars here and a few dollars there might not seem like a lot… but it does. Compound interest and time will turn you into a millionaire if you’re diligent. Always take advantage of freebies and discounts fro college students!
• Open a Roth IRA: A Roth IRA is a type of investment account (IRA stands for Individual Retirement Arrangement) where your gains are tax free. If you’ve earned any money during the year, you can contribute to a Roth IRA. We don’t have enough room to talk about all the ins and outs of this but google it and get one ASAP.
• Start an emergency fund: Some call it a rainy day fund, some call it an “oh sh*t” fund, but put some money into an account for those emergencies that will invariably happen. It’s better than charging it on a credit card and paying for it many years later.
• Try to save 10% of what you earn: Remember when I said habits are started in college? Start one of saving money because the more you save now, the more it’ll grow and the sooner you can retire. It’s just one of many money ratios you should try to stick to and it might be one of the most important.
• Start to learn about investing: You can invest while in college. Investing can be complicated but don’t be intimidated, you can understand it if you put the time. For now, you’ll want to stick to index investing. Heck, you may find that index investing is all you’ll ever need. Most of my investments, now 15 years later, are in index funds.
• If you want to trade stocks, trade on paper first: Everyone is bad at picking stocks. If you really want to do it, do it on paper first. Marketwatch has a free stock market game you can play.
• Read about investments (outside the stock and bond market): You can invest in anything and while I don’t recommend it, it’s still important to understand it. Real estate has always been popular but options, derivatives, and angel investing are just a few terms you should be familiar with. I wouldn’t dabble in them just yet but you need to know they exist.

Spending & Saving Money

You know what they say about a fool and his (or her) money…

• Budget: Budgeting is easier in college because you probably have fewer expenses than you would whenever you start working. Try to find a budgeting method that’ll work for you and build it into your habits.
• Separate wants and needs: This is one skill you must develop in college because it can inform your spending decisions for the rest of your life. The capitalist system we live in will bombard you with marketing messages about how you need this or that, when in fact you don’t. Start with Maslow’s Hierarchy of Needs to understand what one needs to survive…
• Bulk buying is your friend: I used to bulk buy products all the time with my friends to save money. Stores will charge you a little less per unit if you buy more units. A single Coca-Cola will run you more per bottle than if you buy a dozen at once. Don’t be a sucker, buy in bulk. If you can’t use it all or can’t afford it, find some friends to go in on it with you.
• Share stuff: There’s no reason you can’t share services, like cable TV (or you can cut the cable entirely and live without it!) or internet, and split the cost. I had friends who lived in nearby apartments who would share the same wireless system and save a bundle.
• Get those store discount cards: Seems basic but sign up for those store discount/loyalty cards – it’ll invisibly save you money. Why pay more for stuff just because you didn’t sign up for something! And remember to link up your phone number so, if you do forget the card, you can just give them the number.
• Buy used when you can (and is reasonable): Used is always cheaper than new and college is full of used stuff. You can get some fantastic deals if you find out where to go for used stuff.
• Definitely buy textbooks used: Find out what textbooks your classes use and buy them used, never buy them used (unless you have no choice).
• Go “shopping” on move-out day: I used to love going through the dorms on move-out day because many students, especially international students, will leave stuff behind that is still valuable but not valuable enough to take home. Best case is you use it, worst case you sell it.
• Don’t buy a lot of stuff: On the flip side, you will graduate eventually and you might not stay in the area. Don’t accumulate a ton of stuff you’ll have to move or, even worse, sell cheap or dump.
• Put off any non-urgent purchase for 48 hours: I like to keep a list of things I know I need and if there is a good deal, I buy it. For everything else, I wait at least 48 hours. Most of the time I forget I “needed” it and I don’t spend that money needlessly.
• List textbooks a week before finals: Before the end of the semester, you want to try to shed your books before everyone else starts thinking about it. List them, keep using them until they’re sold, and then ship them off. I look to Amazon (to sell directly) and Bookscouter to sell.
• Use mass transit: Having a car in college sounds awesome until you realize that you’ll become your circle of friends’ personal driver and parking can get expensive. Mass transit is great, your student ID might even get you discounted or free rides, so learn to use it.
• Discover the local student discounts: A lot of places will take pity on your student status because we’ve all been there and lived on a tiny budget. Try to find out where you can take advantage and then take advantage of it!!!
• Have fun on the cheap: Even if there aren’t student discounts, there are a ton of things you can do for cheap or free anyway. You just need to look for them!
• Oh, but remember to have fun responsibly: Saving your money is great but don’t let it be at the cost of enjoying your college experience. Enjoy your time but do so responsibly, you don’t have to do everything so pick and choose, and don’t go into credit card debt to do it!

Everything Else

Here are a few tips and ideas that didn’t quite fit anywhere else…

• Start your own club: Are you a fan of something but there isn’t a club for it yet? Start one! And then find some other folks to join you! And then try to get funding for it from your school! Even if it doesn’t work out, it’ll be a fun experience.
• Use that gym: A gym membership can cost anywhere from $30 a month to several hundred, depending on where you live and how fancy it is. Use the gym you’re already paying for (kind of) and get a little stronger in the process.
• Pay as little as reasonably possible on housing: Some of the best times I had in college were when I was living with my friends. That experience will not happen again. The best part is that sharing a house with a few other people will lower the price of rent but also increase the amount of fun you’ll have. Also, you get the experience of living with other people and the challenges that presents too. It’ll be good for you and that’s what I miss the most about college.

Finally, Get Creative!

You won’t have a lot of money, but you’ll have that noggin of yours. Use it!

Creativity is the mother of invention, as they say, so use that overabundance of time to get creative when you need to solve a problem. It could be a fun first date that doesn’t cost a whole lot to checking out popular meeting locations to vulture food (and t-shirts! Find those free t-shirts!). You can save some money by being at the right place at the right time. That skill will pay off in the long run, even after you some pulling in the big bucks.