For College Students

Money Management for College Students

Here’s how to budget, track, and manage your money in college to get you feeling confident about your finances!


College is an incredible time in a student’s life. From living away from home to meeting new friends and exploring your passions, your college years are full of exciting experiences! 

If you’re like most students, college will also be the beginning of your personal financial journey. Sounds like a big responsibility? That’s because it is — but it’s also the opportunity to set up your financial future. To help you out with this process, we rounded up our best advice so you can learn how to organize your finances and build money management skills that’ll last you a lifetime.

Why Organizing and Managing Your Money Properly in College is Important

We’re not gonna sugar coat it here. If you don’t organize and manage your money correctly, you could run out of money before the end of the month. And that’ll leave you struggling to pay for textbooks, food, or toiletries. Not to mention entertainment money, which is a must for every college student.  

If you need another reason to buckle down and organize your finances, just think about life after graduation. The sooner you make money management a habit, the more financial confidence you’ll build for your future. All this argues for learning how to smartly manage your money in college early on, so let’s go ahead and do it!

How to Manage Your Money in College

To make money management feel almost effortless, we’ve broken it down into a step-by-step plan that’s simple to follow. With these tips, you’ll be a college money management whiz in no time. And if you mess up (because we all do at some point!), this guide makes it easy for you to retrace your steps and pick up where you left off.

Create a Budget

Make a list of all the things you spend money on in an average month, along with the cost of each item. Once you’ve got this list, categorize each item into two groups: needs and wants. Needs should include all your basic necessities: housing, groceries, and transportation. Wants, which are also important, will consist of everything you love but can live without. For example, eating out or going to concerts. 

Got your lists ready? Now add the cost of all these items and subtract that number from your total monthly income. If the resulting number is negative, don’t freak out. But you are spending more than you make. It’s time to go back to the list of expenses and see what items you can cut. 

If you ended up with a positive number, that’s awesome! It means you can start saving for your future. 

Making your categorized list of expenses may seem tedious and time-consuming, but it’s the most powerful tool in personal financial management.

Stick To Your Budget

Sticking to your budget is easier said than done. Small purchases — like that coffee shop run before class or streaming movies over the weekend — can sneak up on you. That’s because it’s easy to leave them out of your budget. But just because you don’t put them in the budget doesn’t mean the money doesn’t come out of your bank account! 

Little expenses like these add up quickly and have the power to derail your budget. Of course, we’re not saying you can’t reward yourself with boba after finals. You just have to realize that you spend money on these things and account for them in your budget.

How? Nowadays, it’s easy to keep track of your spending with user-friendly apps. Check out Mint, Wally, or Acorn if you haven’t done so already. They’re a convenient way to track your expenses and make necessary adjustments to stay on budget. 

Moral of the story: Don’t let that latte keep you from paying your bills on time! You can do both responsibly once you get into the habit of tracking your expenses and finding where you need to adjust. 

Save Some Money and Invest 

If you’re like most college students, chances are you’re on a tight budget. But even if that’s the case, there’s always a little wiggle room for you to start saving. Remember, saving money is important, and the sooner you start, the better. 

Having a goal in mind is a great hack to stay motivated with savings. When you have your eye set on something, it’s easier to forgo short-term enjoyment for the sake of long-term goals. So, how about saving for a car down payment? Or your dream vacation after graduation? Or a wardrobe update? 

You can save for many long-term goals, but it’s also important to consider saving for an emergency fund. We know it doesn’t sound like fun, but, like it or not, unexpected events will come up. The more prepared that you are, the greater the chances that you’ll land on your feet when these situations come up.

Wondering where to start? Here’s how you can save some money: 

  • Go over your budget
  • Figure out how much money you can comfortably set aside every month 
  • Schedule monthly automatic transfers to your savings account immediately after your money is deposited into your checking account 

If you stick with this technique, your savings won’t mix your spending money. And before you know it, you’ll have a nice financial cushion in the bank!

If you’re looking to cut costs, here are some tips that help college students save on food:

  • Make a grocery list before going to the store
  • Use coupons 
  • Buy food in bulk with your roommates
  • Look for cheap and healthy recipes to prepare your meals instead of spending money on take-out. 

If school supplies are taking up too much of your budget, try these ideas:

  • Share and split the costs of textbooks with a classmate
  • Buy used textbooks or rent them online 
  • Get notebooks and other supplies in bulk

Once you get into the habit of saving some money, it’s time to give your savings a boost! You can start by opening a high yield savings account — interest rates on your deposits are significantly higher than traditional savings accounts and allow withdrawals at any time — or jump into investing! Find a low-cost online broker —two popular platforms are Fidelity Investments and Charles Schwab — or do it for free with Robinhood

Get a Part-Time Job or Internship

A part-time job is a great way to make the most of your college experience.! If you squeeze in a few shifts between classes, you can increase your cash flow, reduce your student debt, and feel more relaxed about money.

A job on campus is also a great way to network. It can open doors to opportunities for full-time jobs after you graduate. 

If your schedule’s already crammed during the semester, you’re not alone. That’s why many college students only work during the summer. They save up all their money and use it to cover their expenses during the school year. 

Remember, plenty of paid part-time or full-time internships offer valuable work experience while exploring your desired field. When hiring recent graduates, employers look at experiences outside academics. They love to see employment during college and internships. So, go ahead and find the right option for you!

Have a Debt Payoff Plan

In a blink of an eye, you’ll finish school and start making student loan payments. Coming up with a strategy early on to tackle debt and start building wealth will pay off. Before graduation, start to create a plan to tackle this debt. By thinking about how much money you’d like to pay off in one year and how you can free up money in your budget, you’ll be on your way to financial freedom.

How to Ask your Parents to Help You Manage Your Money

Living independently and managing your finances can feel daunting. The good news is that, most of the time, parents are happy to help you organize and manage your money! 

It all starts with being open with your parents about your money management plan. Talk to them about your budget, how you plan to track your expenses, your ideas for savings, and investing. Don’t forget to bring up that emergency fund as well as your job or internship plans, and your debt payoff strategy. When you share all of this, your parents will most likely get on board to help you achieve your goals!

Money Management Terms You Should Know

Here are some money management definitions and terms you should know to start managing your money with confidence:

  • Money Management: In a nutshell, it’s how you handle your finances. It’s the process of budgeting, tracking expenses, saving, and investing. 
  • Annual Percentage Yield (APY): The interest that your savings account earns per year.
  • Annual Percentage Rate (APR): The cost of borrowing money on a yearly basis, expressed as a percentage rate.
  • Cost of Attendance (COA): The total amount it will cost you to go to school, including tuition and fees; room and board (or a housing and food allowance); and allowances for books, supplies, transportation, loan fees.
  • Credit: Borrowing money to buy something. Usually using a credit card, but it might also mean that you got a student loan.
  • Credit Limit: A limit set by the credit card company on how much you can charge on your credit card. 
  • Direct Deposit: Money electronically sent to your bank account or credit union account.

Books and Other Resources to Learn More About Money Management in College

Are you excited to continue learning about money management? That’s the best way to reach your goals! Here are some of the best books to help you on this journey. Read our article on the best personal finance books for college students for more recommendations!

Broke Millennial: Stop Scraping by and Get Your Financial Life Together. We love this book because the author, Erin Lowry, speaks from experience. And this is the best way to teach others how to overcome financial difficulties!

Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence. Everyone’s got money hangups. With this book, you can work on overcoming them so they don’t become an obstacle to your financial success. 

The Total Money Makeover: A Proven Plan for Financial Fitness. There’s a reason why David Ramsey is a financial guru. In this book, he breaks down financial wellness into a proven system that anyone can apply.

The key to financial success is to keep learning and investing in yourself. With knowledge and experience, you can manage your money and use it as a tool to reach your goals.

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About the Author

Lucia Caldera

Lucia Caldera is a writer who specializes in personal finance. Her goal is to create approachable content that sparks financial wellness and unlocks personal growth. Lucia's work reflects her passion for financial education as the key to reducing the wealth gap for future generations.

Last updated on: February 23, 2024