Plan for Tomorrow | Smart money moves for every college student
Two college girls walk together on campus.

Smart money moves for every college student

May 24, 2023, 8:46:59 PM | Reading Time: 5 minutes

As a college student, you likely have a lot on your plate, from keeping up with classes to making important decisions that will impact your future. Even before you graduate you can develop healthy financial habits to help you leave school be better prepared as you strike out on your own.

  Adopt healthy spending habits

Many college students struggle with overspending and leave school with a hefty amount of debt. If you’re on a tight budget, you have to make every dollar go as far as possible. It’s important to stick to a budget and be realistic about your lifestyle and what you can afford. Your budget can act as a roadmap, revealing where your money goes and helping you to identify opportunities to cut unnecessary spending or save more toward your goals.

Using a budgeting app can help you keep track of your expenses and often gives you the option to enter spending limits and set up alerts if you’re approaching these amounts. Create different categories to organize your monthly expenses and make adjustments as your income or needs change. Adopting these healthy financial habits now not only benefits you in the short term but can help you successfully manage your money after you graduate and beyond.

  Build a good credit score

Credit scores and credit history are significant factors in your financial health and are used by lenders to determine how well you manage your money and pay down your debt. A good score can help you secure financing for larger purchases, like a car or house. If you’re looking to rent an apartment, your score tells your potential landlord if they can count on you to make your payments every month. You may not have much credit built up during your college years, but any time you do use a credit card, aim to pay off your balance each month instead of letting the total amount build. Also, be mindful of how much you use your available credit limit. Many financial experts recommend keeping your credit utilization ratio below 30%. This means you use under 30%of the available credit limit on a given credit card account each month.

  Put money in savings

Saving for the future may not be a top priority when you’re busy working toward your degree, but any strides you can make to begin building funds while you’re still a student can be hugely beneficial. Putting money away each month can help you make larger purchases down the road and create a more solid financial foundation once you graduate. Helpful ways to free up money that can be put toward your savings include:

  • Using your student discount at retail stores, digital services, and movie theaters
  • Limiting meals at restaurants or ordering take-out
  • Carpooling if living off campus
  • Buying second-hand clothes, furniture, and textbooks
  • Earning extra income through tutoring, odd jobs, or housesitting

  Create a student loan repayment plan

If you took out a student loan to help with your college tuition and expenses, you’ll need a plan to pay off the balance after graduation. Knowing what to expect can help you be better prepared and allows you to lay out the steps necessary to repay your student loan in a reasonable amount of time. As soon as you graduate, you typically have a 6-month grace period before your first payment is due. If you’re working during college and have extra income that is not needed for essentials, consider creating space in your budget for repaying your student loan, whether that begins while you’re still in school, during your grace period, or several months after graduation.

Smart money moves to make in college


You may want to consider automating your student loan repayments and examining the repayment options available through your loan provider. Some providers offer income-based repayment plans that can help you manage costs based on your budget. As your loan balance decreases, so does the amount of interest you’ll pay, so creating a repayment plan as soon as possible can help you get out of debt faster and free up income to spend on other things.

  Start an emergency fund

Preparing for the unexpected is one of the best financial habits you can adopt while you’re a young adult. By creating a financial safety net, you can avoid having to borrow more money, increase debt, or drastically cut back on necessary expenses. Beginning to build your emergency fund as a college student can help lower stress levels knowing you have a fallback plan in case financial challenges arise. If your car needs repairs or your cell phone must be replaced, you’ll have money already set aside. Include this savings goal in your budget and regularly deposit money into this account. If you exit college without having to use these funds, you’ll already have a reserve in place that you can continue to build upon as you enter the workforce and begin your post-graduate life.

Pursuing a college education is a valuable way to invest in your future and create a foundation to build your professional career upon. When you effectively manage your money and practice mindful spending while you’re still in school, you can kick off your post-graduate years with less debt, more savings, and positive financial habits that help bring your short- and long-term goals within reach.