40 Money Tips for College Students

money tips college students

I remember the first day I set foot at college, it was a mixture of excitement and fear at the prospect of being on my own. I arrived in Evanston, IL a few days early and had the opportunity to wander around an empty campus. Northwestern University wasn’t that large of a campus. You could walk from one end of the campus to the other in less than twenty minutes, but it was still intimidating. After five years, a few degrees, and a great experience, I departed for the “real world.”

One thing I wish I had when I started college was a list of things I to do for my finances the way I did for my academics. College is where you set many of your life’s foundations. Whether it’s spiritual, physical, academic, or financial, your foundations are laid in your youth but set when you’re in college. I was fortunate enough not to make too many missteps and managed well enough, but I wish I had a list… so I wrote one, I hope it can help you whether you’re starting college or just starting over.

Money Tip To Rule All Other Tips

Graduate college with as little debt as you can. If you follow this one tip and ignore all others, you will find yourself ahead of the pack by far. For many, myself included, this means graduating with some student loan debt (I had and still have over $20k in student loans) but that’s OK. Avoid credit card debt at all costs.

Consider this, if you owe $1,000 to your credit card at 18.90% interest, you will pay $211 in interest over the course of 25 months if you make only the minimum payment of $50 (typical minimum payments are 5% of the balance). It may not seem like a lot right now but it’s a significant drag on your finances. You don’t want to be paying for a six-pack of beer for the next two years.

Second Most Important Money Tip

The second most important money tip I can give you is that you should have fun while you’re in college. You will never again have the same mixture of freedom (no parents!) and direction (go to class!) in your life, so take advantage of it. Take advantage of all the free seminars and conferences your school will no doubt offer, go to the free movie nights and participate in intramural sports. Most of all, leave your comfort zone and try things you don’t think you’ll like because you never know what can happen. Best of all, most things on campus will be free (technically it’s included with your tuition) so take advantage! Once you graduate, everything will cost money.

Banking & Credit

  • Open a local bank account: You’ll need a place to deposit checks and withdraw cash, find a local bank with convenient ATM access. Most banks offer fee-free checking for students, take advantage of those offers. Don’t pay any account maintenance fees, you should be able to find a bank that won’t charge them. Or even better…
  • Open a credit union account (if available): Credit unions are better than commercial banks because they generally have your interests in mind. They offer better interest rates on almost everything when compared to a commercial bank. Having a relationship will make it easier for you to get better rates on loans should you need it.
  • Get a credit card: Credit card companies won’t let you get a credit card until you’re 18 because you can’t sign a legally binding contract as a minor. If you don’t trust yourself to use the credit card wisely, set your permanent address as your parent’s home and cut up the card.
  • Don’t get more than one credit card: You won’t need more than one card and having them is either going to tempt you into spending more than you should or just weigh down your wallet or purse. If you’re thinking about optimizing your cash back, reconsider your spending because you shouldn’t be spending enough to justify the added time and hassle.
  • Avoid situations where you give up your personal details in an unencrypted form. That was just a long way of saying don’t sign up for a credit card at a table someone set up in your student union or out on a grassy field. You have no idea who that person is and they don’t work for a credit card company. They’re brokers that end up selling your data to companies. Apply for a student credit card online so that no one ever sees your information in the open.
  • Don’t use your student loan on anything other than tuition: If you are getting a student loan, put it towards your tuition, meal plan, textbooks, or other academic fees and expenses. Don’t spend it on anything else or you’ll regret carrying that debt for the next twenty years.

Earning Money

  • Remember, your first job is to graduate: If you take on a job, remember that your first “job” is to graduate early or on-time. If you take a job solely for the paycheck, be sure that it doesn’t interfere with your first job. Earning some beer money is great but remember that those semesters of school don’t come cheap.
  • Seek jobs for apprenticeship and networking opportunities: If you need or want a job, seek out positions that put you into the apprenticeship of leading professors in your field. Try to get positions that you can put on your resume as that will bolster your summer internship options later on.
  • Get letters of recommendation: If you have a resume-worthy job, be sure to get letters of recommendation from your bosses after major accomplishments or the end of your tenure there. This is a good habit to get into as it can act as both a letter of recommendation for future employers and a reminder of your accomplishments.
  • Seek jobs for personal development: Now is the time to broaden your horizons. If you don’t feel like doing research in a lab or be an admin to a high powered [whatever], go for something that you can enjoy and that will contribute to your personal development. Love to bake? Work at a bakery. Want to help people? Try a non-profit.
  • Considering starting your own business: There is one commodity you will probably have in great abundance – time. Consider starting a business on your own or with some friends with complementary skills. While I was in college, I earned a little money buying and reselling things on eBay. There are plenty of success stories about businesses that started with nothing but an idea between college friends that are now gazillion dollar companies (Heard of Google?).
  • Go to job fairs every year: Some career advisers suggest that you don’t go to career fairs until you’re a junior or senior, I think that’s horrible advice. Go every year, even your freshmen year. While you shouldn’t get your hopes up, many are there looking for full-time employees, you will get familiar with how they work and be more comfortable (less nervous) when you’re going for real during your junior and senior years. If your school offers a summer internship fair in addition to a real job fair, go to those instead (when they’re segregated so clearly, you don’t want to be wasting people’s time).

Saving & Investing Money

  • Open a Roth IRA: If you’ve earned a little money and are filing a tax return, open a Roth IRA to start saving for retirement. Roth IRAs are retirement accounts where you contribute after-tax dollars and your gains are tax-free. It’s a fantastic retirement vehicle if you can take advantage of it.
  • Start an Emergency Fund: You might not think that there are many emergencies for someone in college, but the reality is that you never know. Do you have a car? You could run over a nail and have to replace a tire. What if you lose a textbook or your laptop? Start putting a little away for those unforeseen events so you won’t have to rely on plastic to get through them.
  • Save 10% of Your Earnings: Try to get into the habit of saving 10% of your money as if it were a bill. At first this 10% will go towards an emergency fund or retirement accounts, but eventually, it will go towards your savings goals like a house or a car.
  • Learn about investing: Outside of retirement accounts like a Roth IRA, you probably won’t want to be investing yet unless you have more than a few hundred dollars.
  • Trade stocks on paper: If you’re itching to try stock market investing, don’t put your money at risk and just trade with virtual portfolios. It’ll let you see the results of your decisions without any risk (or reward). Marketwatch has a pretty useful Virtual Stock Exchange you can use.
  • Read about investments outside of the stock market: You won’t have enough savings to invest in areas outside of the stock market (or even in the stock market, but that’s OK), bus learning how things like options and derivatives work will be important down the road. Even if you never get involved in options, it’s important from a general knowledge perspective to know the fundamentals.

Spending Money

  • The marketplace is a battleground: The number one lesson about spending money is that it’s a constant battle between you and businesses. You want to get what you need and spend as little as possible. Businesses and marketing firms are going to try to trick you into spending as much as possible. How much you spend on something does not affect how good it is, regardless of what the marketers try to get you to believe.
  • Learn to identify wants and needs: One key skill in navigating the battleground that is American capitalism is learning to identify wants and needs. You can start with Maslow’s Hierarchy of Needs to truly get a handle of what you really need versus something you merely want. The key difference is that a want is more expensive.
  • Learn to bulk buy items with friends: Stores are always willing to take a little less profit if they can sell more units, so try to find friends who can go in with you on bulk purchases. If you see a buy one get one free sale, find friends who need those items and split the cost.
  • Share whenever possible: We revisit this later on but try to share things that aren’t consumed when used, like wireless or cable television services. This is harder with things that are consumed when used, like shampoo or milk or whatever (though you can still do it), but sharing can cut down your costs significantly.
  • Sign up for & use store discount cards: Almost every grocery store in the country has a customer loyalty or club card that will get you discounts on certain products, join them. Get in the habit of using these cards to cherry-pick deals.
  • Buy used whenever possible (and reasonable): College is full of used stuff from graduating seniors and international students, stuff they don’t want to take with them when they leave. Many things are just as good used as they are new, so take advantage of the huge discount you’ll get.
  • Buy textbooks used: A month before the semester starts, check which books you’ll need an buy them used. Check your school’s for sale boards, Craigslist, and Amazon for the best deals. Never ever buy them from the school bookstore brand new and avoid marking it up if you can to improve resale value.
  • List textbooks online a week before finals: Likewise, list your textbooks online about a week before finals. That way by the time it sells, you will have no need for them. If the book is being reused the next semester, list it on your school’s for sale boards. You will earn far more selling it locally than on a website, which takes a commission.
  • Don’t buy too much stuff: Eventually, it will be your turn to graduate and be that graduating senior or international student trying to get rid of your stuff on the cheap, try to buy as little “junk” as possible and save yourself some moving pains.
  • Learn to put off purchases for one week: If you see something you want, force yourself to wait a week for it. Use that week to find a better deal or a coupon for that store. If you still want to get it after a week, get it. If you don’t, you’ve saved yourself some money on something you didn’t even want a week later.
  • Learn to use mass transit: Most cities are a maze of bus routes that would confuse even the smartest of brain surgeons, learn to use them. At CMU, we were able to ride the buses free of charge (we paid a semesterly fee, so technically we did pay) once we learned how to navigate them. For those living in cities with great trains (New York City, San Francisco, and Washington DC come to mind), you get a lucky break. Mass transit is almost always cheaper than driving.
  • Have fun responsibly: Some people will tell you that you should save up your money and not have fun, that’s unrealistic and unfair. By having fun responsibly I mean that you don’t go into debt at all to have a good time. Save up the money you need and don’t charge it on a credit card if you can’t pay it off in full.
  • Have fun on the cheap: The beauty about college is that most college kids don’t have a lot of money so they find things to do that are extremely cheap or free. Consider joining a recreational club that takes advantage of school resources. There are often plenty of clubs available where you can have fun and spend very little.
  • Start a club: Are you a fan of board games but there is no board game club at your school? (this is highly unlikely) Start your own, get some members, and petition for funding. Even if it doesn’t work out, you can have fun trying to wrangle some of your tuition and fee money back from the school (pfft, good luck!).
  • Learn to budget: Budgeting is important because it gives you a good idea of where you stand each week or month. This is a good skill to learn and get used to because all of your future financial decisions will hinge on knowing how much you usually spend on what.
  • Set up a system to pay bills on time: Link up electronic payment for all the bills you can and setup a reminder system that will help you remember to pay bills on time. My personal favorite is to have the bills electronically delivered to my main email account. Once I see the bill, I log into my account (by visiting the site directly, not by clicking on a link) and electronically scheduling the payment.

Everything Else

  • Use the gym: There will come a time, after you’ve graduated, that you will sign up for a gym membership that will cost more than $50 a month. That’s when you’ll kick yourself for not hitting the free gym while you were in college. Plus, it’s good for you.
  • Reduce boarding expenses as much as possible: The best deals for housing are the off campus ones you can share with seven of your closest friends. I’m just kidding, find yourself a quadruple you can share with three friends and it’ll probably save you some money. You can use the money saved on textbooks… or more beer (see the tip about having fun).
  • Split the wireless bill with your neighbor: If you live close enough to your neighbor, ask to split the wireless bill. Unless you’re downloading video or music or games via torrents, the bandwidth is going to be enough for both of you to surf the web without incident (and you save a few bucks).

Finally, Be Creative!

Creativity trumps money and as a college student, you could use your abundance of time to exercise some creativity in everything you do. Whether it’s a clever and unique first date or trolling around the student center or popular meeting areas for leftover conference food to snagging free t-shirts at job fairs, use your noggin to save a few bucks. That skill will pay dividends even after you start pulling in a full-time salary.

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