10 Tips for Managing Money as a College Student in 2023

Universities are a great opportunity to learn how to manage your finances and develop habits that will help you lay the foundation for lifelong financial success. By clarifying your spending and savings habits, you can work towards larger goals such as: Saving for future milestones, such as repayment of student loans, travel, and moving to a new city after graduating from college.

Of course, the main focus is quality education, but the university also offers a great opportunity to develop the financial skills needed after graduation. To build a strong financial base for the future, we need to start making wise decisions today. This means building the foundation for financial literacy now.

Too many students who graduate face tough financial choices when they're just starting out. If you want to get ahead on the right track and graduate from college in good financial shape, learn 10 tips.

1. Determine the budget

As a student, it is important that you learn how to budget and set financial goals. The idea of ​​budgeting can seem confusing at first. After a long day of lessons, exams, and other assignments, who has the energy to sit down and plan the details of your financial situation? - But in practice, it can be very simple. The college budget is a very powerful tool in personal finances. Create a budget and track your spending habits so you know where your monthly income is going and where you need to cut it. Living on a budget doesn't mean you can never have fun, it just means that fun doesn't get in the way of paying your bills.

Spend some time thinking about all of the living expenses you are responsible for each month. Start with the basic college expenses – tuition, room, and board (or rent and utilities, if you’re living off-campus), textbooks and class supplies, phone, car payments and insurance (or public transportation costs), haircuts, toiletries, and, of course, food. When you’ve made a plan for the money you have, you can rest easy knowing your priorities are covered. Having a college student budget of your own to balance your monthly expenses and knowing how your effect it is one of the best ways to learn good financial habits.

2. Track your expenses

The easiest way to stay on top of your finances is to track where your money is going. Regularly take a look at what you’ve been spending your money on and see where you can make cuts or spend more effectively. You might not realize how much your small, daily purchases add up until you take a look at your income and expenses. Creating a budget is one thing; sticking to it can be more complicated. The next step is to track your expenses through an app like Mint on your phone, or even on paper, to determine if they match with your real-world experience or require fine-tuning. Tracking expenses by date is also very important. For example, if you budgeted $120 for your monthly food budget but used it in two weeks, you know you need to make some changes.

Another reason to check your charges: You can see fraudulent charges on your account in advance and contact your bank to cancel them. There are various budgeting programs that can help you. Get in the habit of linking your daily or weekly purchases together so you can see at a glance how you're doing and where you might be overspending. Check out apps like Wally, Mint, or Acorn to keep track of where your money is staying within your budget.

3. Open a savings account

Many people suffer from it, so it's important to start developing this habit early. It's tempting to spend your money first and then save what's left, but you end up limiting how much you save. Instead, pay your bills first, contribute your savings, and then use something from yourself.

In the words of Warren Buffet, “Do not save what is left over after spending, but spend what is left over after saving.” Now that your budget is in place, you can identify areas where you may be able to spend less and save toward your longer-term goals. Here are a few ideas to get you started:

Consider switching to a less expensive meal plan if you find you regularly have money left in your account. Rent or buy used textbooks instead of new editions at the bookstore. Your college may offer other less expensive options for coursework materials as well. If you find yourself in need of new tech for class, try a refurbished, rather than brand-new, model.

Consider walking, biking, or commuting on campus instead of paying for gas, insurance, and parking during your college years. Like many things in life, budgeting and saving are skills that require time and practice to get the right outcome. Don't worry if you find yourself making mistakes or exceeding your budget from time to time. You can make changes to get back on track. Stay focused on building healthy financial habits that will serve you for years to come.

4. Start building your credit score

Your credit score affects everything from renting an apartment to buying a car to buying your first home. There are many ways to build credibility.

If you have student loans or financial aid, consider making small payments of $25 to $50 while you're still in school to pay off the interest and establish a positive repayment history. The two best ways to build credit are to pay on time and to borrow only what you need. You can also check your credit report for free on Credit Karma. Learning about the factors that influence your credit report and FICO score and what you can do to improve your score are essential steps toward controlling your financial future. Also, be careful with credit card debt. Many, many college students have ruined their credit by taking easy money from credit cards and digging themselves into a debt hole they can’t get out of.

That’s because using cards can be tough to navigate when you’re just starting out and you don’t want to learn about fees and interest the hard way. One strategy some students use to build up their credit is to only use their credit card for one specific expense such as buying textbooks or gas to drive to and from school.

If you make small purchases and regularly pay the balance off in full, you’ll avoid racking up interest charges but still get that boost to your credit score. Start by comparing credit cards and learning the different APRs, fees, and options available. Websites like The Points Guy and Consumer Reports can help recommend reputable companies. A student credit card is a great first step in establishing a good credit history. Building good credit might not seem like a priority when you’re still in school, but you’ll need it down the road if you want to finance a car, buy a house or qualify for the best credit card offers. Your credit can affect your job prospects and even your ability to rent an apartment. Check out the best credit cards for college students here

5. Cooking on a budget

Grocery budgets are a fact of adult life. Whoever you are, you should eat and eat regularly. But there are also many different ways to go about feeding yourself and the decisions you make have a huge impact on your bottom line. Learning how to cook on a budget is an art and a skill that you can rely on for the rest of your life. Finding out how to make foods you like to eat that don’t break the bank is a balancing act that can also be a fun experience at the same time. If you put a few simple, delicious dinner recipes in your cooking arsenal, you’ll find it much easier to save money in the future by pulling together a low-cost meal at home instead of relying on expensive take-out or unhealthy fast food for a quick bite at the end of the day.  Check out food blogs and recipe sites like Serious Eats or Allrecipes.com to sift through recipes and watch how-to videos. You can also find some classic Julia child videos on youtube or the net.

6. Build an emergency fund

Having a financial safety net is an essential part of being independent. To prepare for emergencies and avoid unexpected debt, getting in the habit of always saving 10% of your salary is a good reference point, and it's a mental trick that makes saving easier. About Saving the Emergency Fund. Whether it's an essential car repair, a pet illness, or something important, everyone has to save a lot of money when there are high variable costs.

Relying solely on credit to circumvent an emergency is costing you interest and fees. If you're working to pay off debt, open a small savings account of around $1,000. Once you've paid off your debts and started earning more money, you can increase your emergency fund. An easy way to save is automatic payment. When money stays in your checking account, it's tempting to spend it. When your brain is trained to expect a lower amount in your account, you automatically limit yourself to this budget. Likewise, saving for a large purchase can be a fun way to develop spending discipline. Need help developing discipline? Check out an app like Good budget or Mvelopes to help you put it aside.

7. Have a debt repayment plan

According to the Institute for College, Access and Success two out of three graduates had student debt in 2018. When you have finished school and the waiting period has passed, you should start paying off the student loan. Going from nothing to hundreds of dollars a month can seem shocking. By considering your expected total debt, repayment schedules, and interest, you can create a long-term debt repayment plan that will set you up well after closing. If you have accumulated a lot of student loans, personal loans, or credit card debt, you need a plan of attack. There are many ways to pay off debt, but in the end, you must choose the one that motivates you. To create a strong financial future, you need to strike your debt as quickly as possible. It's important to have an attack plan, so make sure you have the right tools.

8. Start investing now

The earlier you start investing, the more time you will earn with interest. Also, if you start young, you will need to invest less money to reach your retirement goals. Investing is much easier than you think. You can open an online account with a minimum amount of money and schedule monthly withdrawals from your bank account to your investment account. Whether it's opening an IRA or investing in the S&P 500.

9. Try the financial planning apps and resources
   

Managing money on your phone is more than just your bank app. Today, there are tons of different budgeting websites like Mint need you to need a Budget to help you organize your finances so you can save more easily.