College is a crash course in independence. This is most evident when it comes to managing your finances. Whether you’re choosing between meal plans or managing student loans, financial decisions can become all-consuming quickly. It may feel easier to ignore them and pass the literal buck down the road. But here’s the truth: what you do with your money in college doesn’t just affect your weekend plans, it sets the tone for your financial adulthood.
If you’re feeling that personal finance and financial literacy should be their own required class, you’re not alone. In fact, fewer than half of college students report feeling prepared to manage their own finances.
So, let’s fix that.
Here’s the real-world financial advice we wish we had known in college. Insights to help you set up for long-term success, as well as thrive now.
1. Define Your Financial “Why” (Before the What)
Your budget, bank account, or side hustle doesn’t matter until you know why you’re doing this in the first place. Ask yourself:
- What does financial freedom look like to me?
- What do I want my money to do for me?
- What’s more critical—flexibility, security, impact, or lifestyle?
Examples of Your “Why”
Maybe you dream of graduating debt-free. Perhaps you want to travel after college. Maybe you don’t want to feel stressed every time you check your banking app. That’s your “why”—use it to guide your decisions.
Pro Tip: Write it down and revisit it often. Your goals will evolve, and your financial habits that help you reach those goals should too.
2. Budgeting: A Spending Plan That Puts You in Control
Forget the myth that budgeting means giving up what you love. A realistic budget is actually a permission slip to spend with confidence. And it starts with awareness. You need to figure out your starting point by examining where you are currently spending your money. You might be surprised at how much you’re spending in certain areas. Before building a budget, track your spending for 30 days. No editing, no judgment: just observe.
Build a Simple Spending Plan
Then, start building a plan to distribute your income. Use the 50/30/20 rule as a starting point. Portion your income (part-time pay, scholarships, grants, or student loan disbursements) into large categories to decide how you will spend or save it.
- 50% → Needs (rent, tuition, food, utility bills)
- 30% → Wants (streaming services, going out with friends)
- 20% → Savings and debt repayment
You can adjust your spending plan based on your reality (and income). This simple method is primarily intended for adults after school, so don’t feel bad if you’re not saving 20% yet, or if more than 50% will be allocated toward needs. The ideal allocation will come with time, but having a plan is your first step on that path. Use budgeting apps or even your banking app to help stay on track.
Budgeting Checklist
Once you’ve built awareness of your current spending habits and created a plan to control your spending at a high level, you can work through this detailed checklist to identify ways to achieve the plan you’ve laid out for yourself.
- List all monthly income sources.
- Break down needs vs. wants expenses.
- Find areas to reduce waste (subscriptions, impulse buys).
- Set a monthly savings goal—even if it’s just $20.
You’ll be surprised at how paying attention to your spending habits and setting financial goals can improve your perspective and confidence with money. While the word “budget” may initially feel restrictive, it will eventually provide you with the assurance that comes from knowing you’re on track to achieving your goals.
3. Start Saving, Even If It’s Small
Think saving money on a student budget is impossible? It’s not! It’s actually one of the most important habits you can build right now. Even small amounts saved regularly can create a meaningful safety net. Right now, more than half of college students say they wouldn’t be able to cover a $500 emergency without borrowing or turning to family for help. Starting to save, even if it’s just a few dollars each week, can give you peace of mind and help you avoid falling into debt when the unexpected happens.
Saving Strategies for Students
Starting to save money is more about building a habit than about the amount. So, start small, and don’t worry about whether you’ve saved “enough”—yet. Start making saving part of your routine, and the numbers will start adding up quickly.
- Open a savings account so you have a specific place to deposit the money you’re saving.
- Automate savings from each paycheck, even if it’s just $5 a week.
- Create two separate funds:
- Emergency fund: For real-life stuff—medical bills, car repairs.
- Fun fund: For things you want to do—spring break, concert tickets.
- Consider a high-yield savings account. Look for one with no minimum balance requirements and competitive interest rates.
Pro Tip: Once you’ve established the habit, it’s time to set your goals. What do you need to save for emergencies, and what do you want to save up for? Label your savings goals in your app to make saving feel purposeful.
4. Borrow Smarter: Understand Your Student Loans
Student loans are a reality for many college students. While they’re often necessary, you don’t want to drown in them. The key is to understand exactly what you owe, to whom you owe it, and when repayment begins. Start by learning the differences between loan types.
- Subsidized federal loans don’t accrue interest while you’re in school, making them the most affordable option.
- Unsubsidized loans, on the other hand, start collecting interest immediately.
- Private loans, which are offered through banks and other financial institutions, typically come with higher interest rates and fewer flexible repayment options.
To take control of your loan situation, log into the National Student Loan Data System (NSLDS) to review all your federal loan details in one place. It helps to create a simple spreadsheet to track each loan’s type, interest rate, and balance. That way, you can see the whole picture. And don’t wait until after graduation to start exploring repayment options.
Mini Mindset Shift:
Student loans can serve as an investment in your future and your career. But making sure that you can pay them off when the time comes is crucial to helping you make decisions now about how much student debt to take on.
Don’t just think: “Can I make the monthly payment?”
Start asking yourself: “What is the total cost of this loan, including interest?” and “How long will I be paying this off?” and “Will the career I’ve chosen facilitate this payment plan?”
5. Earn Income That Works for You
While your main job in college is learning, there’s no reason you can’t start building your bank account—and your resume—on the side. A part-time job can help you explore your interests, gain real-world experience, and develop skills you’ll use long after graduation—not to mention give you a little wiggle room in your budget.
On-campus jobs are a wonderful place to start, as they’re typically flexible and easily accessible. And if you’re eligible, work-study programs tied to your financial aid package can help you earn money (or reduce debt) while staying connected to your academic environment.
That said, balance is everything. It’s easy to take on too much and end up stretched thin. Prioritize your coursework and ensure that your side gig complements your college experience, rather than distracting from it. The ideal setup provides you with extra income and momentum toward your career.
6. Build Credit Before You Need It
Your credit score affects your purchasing power in a big way. It can affect loan approvals, apartment rentals, job offers, and insurance rates.
The good news is that you don’t need a lot of credit to start building a positive credit history.
Simple Ways to Build Credit:
- Open a student credit card or secured credit card with a low limit.
- Stay disciplined and pay your balance on time and in full each month.
- Keep your credit utilization below 30% (i.e., don’t max out your card).
Stat to Know: The average Gen Z credit score is 679, but building good habits in college can help you break 700+ early on.
7. Stretch Your Budget Without Sacrificing Fun
Saving money in college means making intentional choices that help you stay in control of your finances, without sacrificing all of the fun. There are plenty of easy ways to cut costs. Use your student ID to unlock discounts on everything from streaming services to shopping and food. Skip buying new textbooks and opt for renting or buying used copies whenever possible. Cooking at home or meal prepping can also save you a surprising amount compared to regular takeout. And if you’re paying for multiple streaming services, consider splitting costs with roommates. These small shifts can free up money without taking the joy out of college life.
Real-Life Example: Instead of paying $200+ per semester for textbooks, try sites like Chegg, Amazon Rentals, or your campus bookstore’s used section. Those savings can go directly into your fun fund or help you avoid credit card debt.
8. Think Beyond Graduation: Start Adulting Now
Here’s where most students stop planning. But what’s the real power move? Start planning for life after college while you’re still in it.
Long-Term Money Moves
- Build an emergency fund to cushion job transitions or unexpected expenses.
- Learn how retirement works, especially Roth IRAs and 401(k) matching when you land your first job.
- Understand your health insurance options before you need them.
9. ROI Thinking: A Financial Filter for Adult Decisions
Not every “affordable” decision is a smart one.
Before taking out another loan, signing a pricey lease, or making a large purchase with your credit card, ask yourself a vital question: What is the return on this investment (ROI)? Think of ROI as an ‘is it worth it?’ question. How long will it take to pay off this purchase? Once it’s paid for, will I still be benefiting from it? What am I giving up making this decision, and is that trade-off worth it to me?
Your Money, Your Future
You don’t have to be perfect with your money. But the more intentional you are, the more freedom you’ll have in college and life. Your money should be a source of confidence, not stress. It just takes a mindset shift from reacting to planning. Every smart choice you make today adds up.
Start building your financial plan today with College Raptors’ free tools, including a financial aid comparison tool, and a college match that fits into your long-term plan. Learn from the mistakes of those who have come before you (us!) and build the financially free future you deserve.
