How to Manage Money in College: 10 Tips

How should you manage your money in college as a student? You might feel like a mostly broke college student whose ears perk up at every and any mention of free pizza. I’ve been there too. Pizza never tasted better than when it was proffered to my hungry, poor collegiate self.

It might feel silly to be thinking about how to manage money in college when you feel like you don’t have any. And well, there’s some truth to that. But if all goes well with your career after college, then hopefully this is as broke as you’ll ever be.

But that doesn’t mean you shouldn’t think about how to manage your money now. Whatever you do with your meager pile of cash in college will very much dictate what you do with our larger pile of cash in the not-too-distant future. Or another way of putting it: do well with a little and you’ll do well with a lot.

So without further ado, here are ten things every college student should do with money.

1. Start a Budget

You know what’s going to be a thousand times more valuable than the eight-page double-spaced essay you stayed up last night writing? A budget. Actually, on second thought, it might be a million times more valuable. Because your essay will probably earn you $0. Your budget on the other hand, that is a wealth-building tool like none other.

Whether you’re living on a lump sum payments like student loans, relying on your parents for cash, or making ends meet with a part-time job, having a budget will give you a plan for how much you have and how much you need. A budget will give you a heaping dose of clarity and a lot less stress.

Start a budget with YNAB to help manage your money in college. Students get YNAB free for a year, and you don’t even have to enter a credit card to qualify.

2. Build Credit (Carefully)

If a bank or credit card company shows up during your new student orientation offering you that free pizza you so badly want, resist this temptation. Go to the chess club night instead. Trust us. Credit cards and college students usually mix a few different ways:

1. A college student gets a credit card (possibly their first) and goes crazy with “free” money, only to realize it’s not so free after all. In fact, it’s far worse than a hangover and the debt payoff lasts a lot longer.
2. A college student is given a credit card from Mom or Dad that may or may not be in your name. Perk: money you didn’t have to work for! Con: you might not be building credit for yourself, and if you are cosigned on their card, any credit card run-up could get you grounded for a good long time.
3. A college student completely avoids credit cards and thus has no credit history after graduation to look good on a rental application or qualify for a car loan. This will make life after college a little trickier…and I’m saying that from personal experience.

Is there such a thing as a college student that is good at having a credit card? Luckily for all of us involved, we found one. Yes, one.

She just so happens to be the daughter of famed personal finance expert Michelle Singletary over at the Washington Post. Here’s the brilliant plan for her own college daughter to build good credit in a very responsible way and now you can be that responsible college student too with excellent credit and no hangover credit card debt.

1. Get a secured credit card, which is backed by money in a savings account. For example, if the required deposit is $200, that becomes your credit limit.
2. Use this card for only small-dollar purchases—maybe you make one purchase for gas in July, and another for a coffee in August. Pay off the balance in full every month.
3. After a few months with this secured card, apply for a traditional credit card where your assets aren’t directly on the line. You should be able to qualify if you’ve made on-time payments.
4. Use your new traditional card for the same small purchases and pay it off every month. By the time you graduate, don’t be surprised if you have an excellent or near perfect credit score.

With this plan, you’ll prove you can handle credit responsibly and bask in the glory of lower interest rates in the future. I know, it sounds so boring. But trust us, financial savvy really shines through on dating apps.

3. Know Your Loans

You signed a piece of paper somewhere, at some point, but what does it mean? You don’t have a clue. And hey, that’s totally normal. No one ever teaches you about that, but good thing you know trigonometry. So here’s what we’re gonna do: we’re gonna rip that band-aid off. One fell swoop. You might shriek in pain just once, but then it’ll be off.

I want you to hunt down where your loans are and who they’re with, the amounts, the interest rates, and when they come due. Start with this database of Federal Student Loans.  You might have a collection of public or private loans, with interest rates ranging between 3-15%. This list may grow as you finish out your time in college. What we want to do is just get some awareness so you’re not flying blind in a few years.

You can keep track of these loans in a spreadsheet, or if you took our brilliant advice and signed up for your free year of YNAB you can keep those neat, tidy, and organized right in the app.

Want to make a debt plan and learn the tools to pay off your debt fast? Check out our free debt course!

4. Find a Source of Income

At some point you’ll have to start supporting yourself. Having some spending money will feel pretty nice come spring break season when your friends are urging you to join a trip your parents refuse to pay for. Maybe you have a part-time job, pick up work in the summer, are part of a work-study program, get scholarships, or have a side hustle on Etsy. It greatly behooves you to pad your savings account with a little hard-earned money (in more ways that one, more on that later).

And while we know school takes up a lot of time, we also know you DO have time in your day to practice some entrepreneurial spirit and build some of that work ethic that you’ll want in spades come review time in your future job.

Plus, it feels pretty good to be a little self-sufficient.

5. Understand the Magic of Compound Interest

Albert Einstein was one smart dude, and you know what he called the eighth wonder of the world? Compound interest. This slick little feature of the money world can either be your best friend (when it comes to things like saving for retirement) or worst enemy (if you’re dealing with unruly credit card interest rates that eat your cash for a midnight snack).

If you have the cash flow available (see above point about the benefits of a source of income), it can be hugely beneficial if not mind-numbingly responsible to start saving for retirement while you’re still in college. The short story is you’ll have to work a lot less hard with a lot less money if you start early.

When I was in college, I was lured me with free pizza (the good kind of luring, not like slimy credit card companies) to a multi-week session on personal finance put on in the evenings. I started a Roth IRA because of it, and that one six-hour program might’ve been the singular most tangible boost I got from college.

I think I started with just investing $50/month. Ten years later, I had $50K in the account thanks to automatic transfers and bumping up my contributions once I got a steady job. I’ll leave that to grow for retirement, and it could turn into $500K without adding another dollar. That, my friends, is compound interest at work. The best friend kind. See what I mean?

Listen to a podcast about the atomic power of compound interest with bestselling author James Clear.

6. Live Like You’re a College Student

Can’t afford to go out to eat every night? Nope, probably not. And that’s perfectly acceptable. Can’t buy the newest and latest clothes, the newest and latest computer? Of course not. Buying the cheapest groceries you can find and know exactly when the store marks down day-old french bread to 89 cents? You, my friend, are living like a college student. Wear that badge proudly. If you want to manage your money in college and beyond in a way that gets you an A+, it all comes down to living on less than you make.

Sure, you might feel a little pressure to keep up with the Jones kid living down the hall, but the pressure after graduation just exponentially builds. Learn to get the goalpost to stop moving now and you’ll have a stronger muscle to flex when you really need it in the future.

7. Learn the Lingo

The world of personal finance can be a jargony and intimidating place. We get it. And it’s usually kind of boring too. We want no part in boring money management. Start putting yourself in a position to be exposed to personal finance talk. Maybe you got this at the dinner table naturally growing up, but chances are you didn’t get so lucky.

The good news is the personal finance side of TikTok (yes, TikTok) is absolutely blooming. Follow us on TikTok along with hundreds of thousands of people for guilt-free, shame-free, and never boring finance talk. Before you know it, you’ll be slinging around debt snowballs and waxing poetic on the dangers of buy now, pay later schemes.

Want a crash course in the meantime? Check out the YNAB dictionary to breeze through the basics.

8. Build an Emergency Fund

Prepare for a financial rainy day with an emergency fund. Looking for a benchmark? Try to save $1K as a cushion. If the car breaks down or your phone gets dropped in a pool, it won’t cause extra stress. You’ve got the money there to break your fall. No credit card debt needed.

Where should you keep it? In a savings account. Or, if you want to keep it super clear and organized, your YNAB budget can once again save the day.

9. File Your FAFSA

Your parent(s) might actually do this one, but if they don’t, you won’t want to miss out on the federal financial aid that FAFSA could provide. To manage your money in college, this step is an essential. File your FAFSA every year (application window opens October 1, file early to stress less!). Fill out the application online, and expect it to take about an hour the first go-round, and about half hour for every renewal.

We wish we could make this one fun. I mean, we figured out how to make budgeting fun! But with FAFSA, just take an evening and get it over with.

10. Be Realistic About Life After Graduation

When I was choosing my major, I only vaguely thought about which careers would be lucrative. This should be clear in the fact that I’m a writer by trade. I encourage you to do a Google search of your hypothetical future salary. Be sure to look at the entry-level position, or expect to make at the low end of the range when you’re first starting out.

When you dream of the cool city life you’ll embark on in your 20s, do yourself another favor and check out listings fo rental costs in the area you want to live. Oh and one more thing: whatever entry-level salary you think you might make? Divide it by 12 and then take away 25% of it. Welcome to taxes, my friend.

And for the real-life example: my writer salary at my first job was $30,000 a year. Rent was $1600/month. My monthly income after taxes? $1,875/month. So yes, I got a roommate, slashed the cost in half, and learned to have fun on the weekends for free (lots of picnics, lots of bikerides).

Some of these financial discoveries are very rude awakenings for fresh-faced college grads. Go in with wide eyes and a firm grasp of reality for the smoothest transition to adulthood. Judging by the fact that you made it this far in an article about how to manage your money as a college student, we’re gonna make an educated guess and figure you’ll end up just fine.

Thanks for reading. Best of luck in your studies, and enjoy the pizza—it’ll never taste better than it does right now.

Start your budget for free with YNAB to manage your money in college. No credit card required. Build the habits that will serve you well now and in the not-too-distant future.