Last Updated on July 21, 2021
Are you in college and struggling to manage your money? Sadly, this is the case with many students today. But the good news is that it’s possible to get your finances right if you learn some financial tips for college students.
If you start to practice good money habits early, you’ll enjoy a better future. You won’t have to live paycheck to paycheck after graduation.
Here are the 8 personal finance tips you need to know as a college student.
1. Make the Budget Your Friend
You may think that creating a budget doesn’t apply to you because you’re still in college. The truth is that it’s never too early to start budgeting your money.
Many people think that the process is tiring and only for people who like numbers. But a budget can help anyone track their income and expenses without stressing out.
In a nutshell, you need to set some financial goals, list your monthly expenses, and calculate your income versus spending. If you find out that you’re overspending, it’s best to get rid of your unnecessary expenses. This approach enables you to free up more money for other useful things.
2. Lower Your Monthly Expenses
As a college student, you have needs and wants to spend money on each month. Even if you’re not spending more than you have, there are several expenses you can reduce or eliminate. This applies to any student looking to reach their financial goals faster.
For instance, you may be eating out a lot instead of cooking at your place while living off-campus. And we all know how expensive takeout food can be.
In fact, studies in 2020 showed that the average college student spent over $4,000 per year eating out. Social media pressure has caused many students to spend more money on fancy foods.
But it’s possible to start preparing your own meals to save money. You can even lower your grocery expenses further by planning meals, creating a shopping list, and using your leftovers.
Another expense to trim is transportation. You could walk more often or share a car with others. Other than that, you can live with someone to split rent and other living expenses.
Depending on where you go to college, there can be lots of expenses to lower. You only need to find a cheaper alternative!
3. Save Money for Emergencies
Most students rely on their parents for their financial needs. So, you may have someone to cover your unexpected costs and other emergencies.
You might not yet have a job or business to lose and experience any sort of financial stress. But it would help if you start saving on your own sooner.
You can start building emergency savings through your bank. Keep 3-6 months’ worth of expenses in it.
You’ll be able to take care of yourself without the help of others. Aside from that, your emergency savings account will be in great shape when you get older.
4. Limit Your Credit Card Usage
Credit cards come in handy when used responsibly. You can make purchases that are essential to your daily goals.
But you need to avoid getting into credit card debt that you can’t pay off. It’s common for college students to go on spending sprees. This habit can be harmful in the long run if you’re using loans to finance such luxuries.
One way to spend less money on credit cards is to only have one or two of them. Avoid opening new accounts and it’ll be easier to build your credit score.
Another simple tip is to carry cash for payments. If you have a specific amount at hand, you won’t spend money you don’t have on daily purchases. It’s a chance to avoid high-interest debts.
5. Get a Part-Time Job to Earn Extra Money
The best way to get money for financing a good college life is to find a side job. You’ll be able to pay your bills on time and have money for other purposes without struggling.
When it comes to making money in college, several options are available. One of them would be to find an on-campus job where you’re hired by your institution. Some of these jobs include being a research assistant, campus dining employee, or college tour guide.
Many other side hustles can be done outside the campus. It could be selling stuff, pet sitting, or even working online.
All you have to do is pick an idea you’re confident you can execute and start generating income from it.
6. Find a Debt Payoff Strategy
You need a proper debt repayment strategy to get rid of your student loans as soon as possible. For any debt that you get into, be sure to have a plan or two for how to get out too.
For instance, you may use your extra money to start paying off high-interest debts first. This approach makes you pay lower interest costs in the long run.
Another option would be to eliminate the debts with the smallest balances first. This strategy works well if you’re one who likes seeing small achievements to get motivated.
Regardless of the plan you use, always make the minimum payments on your other debts. That’s how you’ll avoid late fees and other penalties from creditors.
7. Start Investing
If you have extra money that you don’t know how to spend, consider investing. It’s a great way to grow your money and have financial stability in the future.
Most people think they need thousands of dollars to start investing. In reality, you can invest $100 or less when starting out. The money can go toward a small business, partial shares of stocks, or lending.
Beginning to invest early is a surefire way to learn the ropes and get it right while younger. Once you’re good at it, you’ll know which big investments are likely to succeed and the ones to avoid.
8. Have Fun on a Budget
This is probably the skill every student needs to learn. If you can have fun on a budget, life becomes much easier.
As you may know, it’s a good idea to take a break from your studies or work every once in a while. And if you can’t control your spending, you may pour a lot of your money into fun activities.
One simple idea is to take advantage of low prices and discounts. It could be a meal at the restaurant, an event ticket, among other things.
And that’s it. Follow a few or all these financial tips and your life now (and after college) will be less stressful!