The Complete Guide to Money Management for College Students

Summary: For many, college is the time money matters get real. Use these short- and long-term tactics to improve your financial well-being over your lifetime.

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By Jeff Smith, editor of the Self Lender blog

Table of contents:
1. Long-Term Money Management Strategies
2. Day-To-Day Money Management Strategies
3. Other Helpful Resources

For many young adults, college is their first experience managing money on their own. Parents recognize the need for this knowledge, but some do not know how to communicate it properly and a lot of colleges do not offer classes on the subject matter.

Money management is a skill you will carry with you throughout your life and the money management habits you develop in college are likely to stay with you forever.

Finances are one of the main reasons that students drop out of college. By practicing proper money management techniques now, students can feel confident about their ability to manage finances into their adult life and avoid debt down the road.

College is also when a lot of people start to build credit for their first time. Learning to manage money early will set students up for the stress-free financial future they deserve.

Long-Term Money Management Strategies

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As a college student, you are not only pressed for time, but often for money as well. Now is the time to start building proper financial habits. Here are five long-term strategies you can carry with you past your graduation date.

Budget, Budget, Budget

Creating a budget is extremely important and it is something that you should start doing right away. The key to budgeting is identifying the difference between wants and needs. Begin by listing monthly income, savings, and any parental allowances. Next, write down your estimated expenses for the month. Take things into account like books, school supplies, laundry, food outside your meal plan, and personal care items to make sure you’re painting an accurate picture of your spending habits.

Of course, creating a budget does not mean that you can’t have fun. Take your “fun” expenses into account when creating your budget. Setting these limits ahead of time will put you on the right path to better money management in the future.

Start an Emergency Fund

College student or not, starting an emergency fund is crucial to anyone’s long-term financial health. Life is full of financial curve balls and your emergency fund serves as a safety net that you can fall back on for those “rainy days” where you find yourself experiencing a financial crisis.

Your emergency fund is there to help you get back on your feet. How much you save each month is up to you and your financial situation. The key is to make sure you’re saving something each month — no matter how small the amount may initially seem.

When starting your emergency fund, it is important to fund the account regularly. Even if it is only $25/month, set aside an automatic transfer to your savings so you do not have to think about it. This emergency fund should also be set in a separate account from your day-to-day checking and long-term savings accounts.

The last thing you need to ask yourself is: what qualifies as a good use of your emergency money? Such costs are typically unexpected and time-sensitive, so think more along the lines of medical and car expenses than that new pair of sneakers.

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Be Smart About Credit Cards

College is an amazing time to start building credit. However, it can be easy to get caught up in debt if you’re not careful. Make sure to choose the right credit card for you. Create a pros/cons list for the different options you are offered and set a reasonably low spending limit for yourself.

Do your research to determine the card that is right for you, though benefits like points and cash back rewards are attractive to many. If you are having trouble getting your first credit card, credit builder loans are a great option to consider. Credit builder loans offer people a chance to build or restore credit, with no money required upfront.

Know Your Student Loan Options

You have to pay for college somehow and if you don’t have the funds available, student loans are a viable option. It is important to consider all the ways in which you can lower college costs, so ask your school’s financial aid office about student loan options to help determine what approach might be best for you.

Remember that when opting for student loans, you will have to pay back everything you borrow plus interest. Most people don’t know the great impact student loans can have on your finances. In fact, 90% of Americans don’t know how long it takes to pay off student loans.

Long after you graduate college student loans can affect things like your credit score. However, since payment history and length of credit play an important role in credit score calculations, those who pay back their student loans in a timely manner should see a positive boost to their overall credit. Estimate the amount of student loan debt you will owe upon graduation and come up with a payment plan on how you will pay it back ahead of time so you can avoid any bad credit.

Apply for Scholarships

If applicable, student scholarships are an amazing way to take some of the load off your college tuition. When applying for colleges, check out what scholarships are available and whether or not you qualify. Use a resource like Scholarships.com to search over three million colleges and learn about the different scholarships and financial aid they have appropriate for you and your financial situation.

When applying for scholarships, make sure to not write off any smaller scholarship opportunities. You are more likely to get a few small scholarships than the full-ride one everyone dreams of. Even ones that offer $50 can be beneficial to students. With effort, the average student can win anything from $1,000-$5,000.

And, scholarships are not just for recent high school graduates with good grades and athletic ability. Self Lender offers a $1,000 College Scholarship for Aspiring Entrepreneurs available to any full-time university students pursuing a degree in business, finance, entrepreneurship, computer science, economics, accounting or mathematics.

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Find Cheap Housing

Housing is a large and unavoidable cost in college. If you do not have the luxury of living at home, check out what your campus has to offer. Living on campus your first year or two of college is a cost-effective way to get that full college experience. Renting is also a practical way to save money in college. Be proactive about building your credit and use services like RentTrack that report rent payments to credit bureaus.

If you are not familiar with the area, chat with other students to learn about the different options available. One of them might be moving out of a place that would be perfect for you. Living with roommates is also a major money saver when it comes to housing. Chat with people at orientation or who are in the same classes as you to see if they also need a place to live. Who knows, you could end up meeting some of your best friends!

Work While in College

There are many advantages to working while in college. Working in college will give you the extra income you need while providing you with valuable job experience you can use in the long run. The more money you make, the less you will have to borrow — which will save you from debt in the future.

Universities often offer tons of job options for students. Ask about being an RA or working at the school bookstore. Several companies near your campus may also offer added employee benefits to college students. If balancing work and school is too stressful for you, consider applying for summer jobs.

It is also never too early to start a side hustle. Consider walking dogs or driving for a ride-sharing service. Making a little money is better than making no money at all.

Day-To-Day Money Management Strategies

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From cooking at home to avoiding that $5 latte, there are several money management strategies you can implement now to help you be more frugal during your college years. In this section, we go over eight day-to-day money management strategies you can start doing now.

Take Advantage of Meal Plans

Meal plans are a luxury and should be taken advantage of when in college. Do your research before choosing a meal plan to make sure it is the right one for you. For example, if you tend to sleep past noon, maybe opt for the two meals a day meal plan instead of the three meals a day option.

Ask about what meal plans your college offers during campus tours, then do your research from there. If your college does not let you choose your meal plan, make the most out of what you have by utilizing it to its full amount. If you have extra money left over for the day, buy snacks that you may want tomorrow.

Purchase or Rent Used School Books

The average college student spends more than $1,200 a year on books and materials for their classes. No matter what your financial situation is during college, textbooks are a significant expense for everyone. Renting or purchasing used textbooks is an easy way to save money and beat the system in college. Your campus bookstore will sometimes offer used books at a discount, however, sometimes these can be exceptionally pricey.

If you choose to rent, renting college textbooks is a very easy process. According to Chegg, you can save up to 90% by renting a book rather than buying it. When renting, make sure to be wary of any late fees or damage penalties. Search on Amazon for used textbooks, or shop online at places like Chegg and Valore that offer several discounted options.

If you do choose to buy a textbook, or can not find a rented version anywhere online, consider selling the textbook once you are done to earn some extra cash.

Avoid Unnecessary Fees

There are loads of unnecessary fees in college. Banks and large companies tend to target college students. It is important to be aware of your financial vulnerability and take action when you see an unwarranted cost. Learn how to avoid banks’ fees for things like transferring funds, making ATM withdrawals, and paying bills online.

Some additional unnecessary costs include any automated payments you have such as Netflix or Apple music. Subscriptions like these can add up quickly. Make sure to take note of anything you are subscribed to and cut out anything you do not need. Parking fees can also be a huge cost burden. Consider whether you even need a car during your school year. Public transportation is often cheaper and you avoid the risk of getting a parking ticket.

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Use Your Student ID Card to Its Full Potential

Many only recognize their student ID card as a form of identification and way to get into college football games. However, there are many additional benefits that many are aware of, including several ways you can use your student ID card to save money. Several businesses 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, call the business first to see if they offer any discounts for local college students.

Your student ID card also grants you access to several campus resources. Amenities such as the gym, pool, and library are all things you would otherwise have to pay for if you were not in school. Take advantage of them now before you have to start paying for them once you graduate!

Cook at Home

Your meal plan is great, but it does not last forever. Purchasing ingredients from your local supermarket instead of eating out every night will save you loads of money in the long run. In fact, according to Wellio, a meal from a restaurant is five times as expensive as cooking at home and you can save about $16 per meal by eating in instead.

Get in the habit of cooking at home early. These are great skills you will utilize for life outside of college. And, you can make cooking at home fun! Invite friends over and try out new recipes. You can also avoid the “freshman 15” by cooking healthier options for yourself at home rather than getting that late night fast food run.

Avoid that $5 Latte

Treating yourself to that $5 iced macchiato is nice, but it is not necessary every day. That $5 may not seem like a lot at first, but when you are buying it two to three times a week, lattes can add up.

Think about it, three $5 coffees a week adds up to $15 a week. $15 a week turns into $60 a month you are spending on coffee that could be spent somewhere more valuable. If getting a coffee every day is a part of your routine, start small. Begin by getting coffee every other day and then go from there. Making coffee at home can save you loads of money and time by avoiding those long coffee shop lines.

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Plan Social Activities that Don’t Involve Money

Going out every weekend can add up. Start planning social activities that don’t revolve around money. Take advantage of school amenities like the pool, basketball court, or bowling alley and plan events around that. Everyone is tight on money in college, and your friends are going to love saving a few bucks just as much as you on the weekends.

Use Public Transportation

If you do not live within walking or biking distance of your campus, opt for public transportation. Not only will you avoid the hassle of busy school parking lots, but you will save money as well. Parking passes at universities are expensive, not to mention the cost of gas and car insurance.

When using public transportation you will probably spend a couple dollars a day or less. A lot of people’s main concern is the time you spend commuting. However, while public transportation may take longer, you have the option to study, catch up on reading, or complete any class assignments on your commute.

Other Helpful Resources

The bottom line: college is expensive, but there are ways to make that cost burden not hurt as much. Being proactive and taking control of your financial life early in college will set you up for success in the future. To help you get started on the right path towards money management, we have rounded up some of the best resources on the internet to help you manage your money properly and take control of you financial life!

Buying or renting books
- Amazon
- Chegg
- Valore
- eCampus
- AbeBooks
- Textbooks.com
- CampusBookRentals
- TextbookRush
- alibris

Scholarships
- Scholarships.com
- $1,000 College Scholarship for Aspiring Entrepreneurs
- College Board BigFuture
- FastWeb
- Scholly
- ScholarshipPoints

Building & Managing Credit
- Credit Builder Loans
- Credit Score Calculator

Housing
- RentTrack
- Lemonade
- Apartment Guide
- Rent.com
- Campus Cribz
- Uloop

Budgeting
- Mint
- Dollarbird
- You Need a Budget
- PocketGuard
- Claritymoney
- GoodBudget

Sources: Ohio State University | Huffington Post | Affordable Colleges Online | Scholarships | Investopedia | CBS News |

Written on November 14, 2018

Self Lender is a venture-backed startup that helps people build credit and savings. Comments? Questions? Send us a note at hello@selflender.com.

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