For College Students

Saving Money for College Students

Learn foolproof strategies to help you save money on a college budget and still have fun.

college-students-walking-into-bank

Want to survive college without starving? The key is to learn how to save your money. From tuition to transportation, books, and housing, college expenses pile up real fast. But that doesn’t mean you have to buy into the broke student mentality. With our practical guide, you’ll learn how to manage your money and save it for the things that matter most – like pizza, beer, and paying off your student loans.

Why Saving Your Money in College is Important

There are many reasons why saving money is important, even while you’re still in college. The first one’s pretty obvious: You have to make ends meet. Without your parents there, you simply can’t afford to run out of money before the end of the month. 

The good news is that college is like the real world, but with training wheels. You’ve got a good amount of responsibilities, but they’re still lower than what you’ll have to handle after graduation. This is why your college years are the perfect time to develop financial confidence and money management skills.

Need some inspo to start saving? Just think of everything you can do with that stash of cash after graduation! How about using it to pay the deposit on your first apartment? Or making sure your living expenses are covered while you find a job? With a comfortable cushion, you can begin your adult life on the right foot and start working toward your life goals.

The Smart Way to Save Your Money in College

There’s no denying that most college students are on a tight budget. After all, you’re focusing on learning, not building wealth. But this doesn’t mean you can’t set some money aside to start growing your nest egg.

Common Expenses for College Students

To figure out the best way to save money, you need to take a look at your expenses. Go through three or four months of bank statements and make a list of where your money goes. While this may seem tedious, it’s worth your time.

Some common expenses for college students include:

  • Clothing
  • Toiletries
  • Laundry
  • Dining out
  • Recreation
  • Transportation or gas
  • Phone service

Where You Can Save a Buck

Once you’ve reviewed your statements, it’s easy to find places where you’re overspending and figure out ways to cut back. The following are some ideas to get you started.

Lower Your Living Expenses

Living on your own for the first time is exciting. However, the reality is that housing is one of the biggest expenses for college students. If you’re able to lower your cost of living, it’s possible to save thousands of dollars per year! Here’s how:

  • Live at home and commute to school
  • Figure out if it’s cheaper to live in the dorms or in an apartment
  • Find roommates
  • Consider a studio apartment
  • Buy used furniture

Save on Food Costs

Good food fuels your brain and helps you learn. But college students aren’t exactly known for their great eating habits. If you’re overspending on pizza and wings, these suggestions can help lower your food bill:

  • If you’ve got a meal plan, use it
  • Buy food in bulk with your roommates
  • Order groceries online avoid buying items you don’t need
  • Use coupons
  • Set up a dining out budget and stick to it

Minimize Education Costs

Think college costs are set in stone? Think again! There’s a lot you can do to keep those school fees down and save big on your education. These are some of the best ways to do so:

  • Apply for scholarships, grants and work study programs
  • Plan out your classes to earn your degree as quickly as possible
  • Buy used textbooks
  • Buy your computer and other supplies with your student discount
  • Take classes at community college

Get Thrifty with Transportation and Travel

Many college towns are so well planned that it’s easy for students to get around. Others, not so much. Regardless of infrastructure, there are plenty of ways for students to save on transportation and travel. Take a look at these tips:

  • Ride a bike or carpool with friends – it’s eco-friendly and good for your wallet
  • Use your student discount to get public transportation monthly passes
  • Monitor flight prices when booking trips back home
  • Use credit card rewards to buy plane tickets
  • Sell your car to cover expenses during the school year

Stretch Your Entertainment Dollars

Having fun and enjoying your college experience is important for your mental health. Even if you don’t have tons of money, there are savvy ways to enjoy a night out with friends without breaking the bank. These are popular picks for college students:

  • Check out the free events on campus — they often include free food!
  • Sign up for school clubs to hang out with people who have similar interests
  • Work out at the school gym
  • Swap shopping for thrifting with friends
  • Have your friends over for game night or to binge watch your favorite show

Other Ways to Save

When it comes to saving, automation is the name of the game. You simply can’t count on your willpower to transfer money from your checking to your savings. There are too many temptations!

To actually set money aside, you first need to create a budget and figure out how much you can save every month. With this amount in mind, set up an automatic transfer and forget all about it. Chances are, you won’t even miss that money and before you know it you’ll have a good amount of money in your savings account.

Don’t think you can afford to save? Before ruling out the idea of savings, ask yourself these questions:

  • Do I have any wiggle room in my budget? 
  • Can I find a side gig to increase my income? 
  • Do I have stuff lying around that I can sell?
  • Am I comparing prices and using coupons for my purchases?
  • Do I check my bank account on the daily?

These questions help create awareness of your money habits and make you more resourceful. More likely than not, they’ll help you find places where you can cut back on your spending and start your savings.

How to Ask Your Parents to Help You Save Money

Sometimes, savings are completely out of the question. If your income is limited and you’ve already cut back on your budget, consider reaching out to your family for help. 

Often, parents and grandparents are happy to get on board and help you work toward your savings goals. If you think your parents can afford to do so, the best way to approach them about this is by sharing your budget with them. This will show that you’re being responsible and transparent with your finances.

While some families may feel more comfortable with taking over some of your payments, others might prefer to simply deposit money to a savings or investment account in your name. By having an honest conversation with your parents, you can figure out what works best for them.

What’s the Right Amount of Money to Save as a College Student?

While there is no set dollar amount for college students to save, there’s a rule of thumb that can help guide you. 

Financial experts recommend that you break down your income as follows:

  • Use 50% of your income to cover your necessities (such as rent, food and health)
  • Budget 30% for your money for discretionary expenses (i.e. entertainment, shopping, dining out)
  • Set 20% aside for financial goals (this includes savings or investments)

You can use these guidelines to budget your money while in college and throughout your adult life.

Saving Terms You Should Know

Being in charge of your financial transactions is a big responsibility. There’s a lot to learn and, most of the time, they don’t teach you these things at school. To help you bank and save with confidence, we’ve rounded up some of the saving terms that every college student should know:

  • ACH Transfer: It stands for Automated Clearing House, which is the network that processes electronic transfers from one account to another. These include direct deposits and automatic withdrawals. Usually, ACH transfers are free and take one day to clear.
  • Annual Percentage Yield (APY): The interest that your savings account earns per year. According to government sources, the average APY is 0.06%.
  • Balance: The amount of money in your account. This term also applies to checking or investment accounts.
  • Certificate of Deposit (CD): A financial product that allows you to save money at a higher interest rate, but can only be withdrawn after a specified period of time. The date when you can withdraw your funds is known as the maturity date.
  • Early Withdrawal Penalty: The fees that you have to pay if you withdraw money from a CD before it matures.
  • Wire Transfer: A transaction that lets you move money from one bank account to another and makes the funds available on the same business day. There is a fee associated with these transactions. Wire transfers are less common now that people can use other payment services such as Zelle, PayPal or Venmo.

Books to Learn More About Saving

Managing your money is a lifelong task. To achieve your financial goals, it’s important to continue learning and educating yourself. If you’d like to dive deeper into the subject, these are some of the best books and resources for college students. Head over to our full list of the best personal finance books for college students for more recommendations.

Easiest to Read

Written in novel style, The Latte Factor is a quick read that feels relatable and current. But it’s not all stories with this handy book that also includes action items for you to gain control of your finances.

Best for Paying Off Student Debt

Are you graduating college with debt? Let Dave Ramsey’s The Total Money Makeover guide you to pay off that debt, stay out of debt and find financial freedom. 

A Must-Read Classic

People who are “good with money” have a mindset that helps them achieve their goals. In Rich Dad, Poor Dad, Robert Kiyosaki demystifies this outlook and helps you approach money matters with confidence.

Going to college is the beginning of your personal finance journey. Sure, there will be plenty of parties and friends too. But, along the way, you can also use your college years to develop healthy savings habits. Learning to manage your money from a young age is the secret to finding financial freedom as an adult.

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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: March 15, 2022