10 Money Tips for College Students

You’ve graduated college and are moving on to the world of the financially responsible adult. Yeah, right. The number of bankruptcy filings by the college educated has continued to climb (although bombing your student loans with bankruptcy is pretty difficult), and the cost of a college education continues to rise.
Instead of falling into this category of the financially confused, adopt some habits that will start putting you on the right track now – while you’re in college. Not only will you keep yourself out of money trouble, but you’ll also find yourself with a serious competitive advantage.

Before You Get into the Tips

I didn’t want to write the same old “money saving tips for college students” article that we’ve all read before. These articles always include tips like:

  1. Learn how to budget
  2. Spend less than you earn
  3. Buy used text books
  4. Don’t take out bigger student loans than what you really need


Instead of regurgitating the same old common sense crap, I wanted to share some things that I wish I had known when I was going through college. I ran each of these ideas by a number of my closest, college educated friends, too, to make sure there was some sort of consensus before I published it.

Not all of these tips will apply to every college student (for instance, letting your mom use your credit card could turn out to actually be a nightmare), but you’ll find them to be completely original.

Avoid Credit Cards at All Costs

Credit cards are the bane of many college students. Sure, you might think that you’ll accept an offer and pay it off every month before the interest hits – and you might even stick with that plan for quite some time. But an inevitable day will come where you experience an emergency (or some other absolutely “acceptable” excuse) that requires you to bite off way more than you can chew.

You’ll start accruing interest and you’ll have a hard time catching up. You’ll be throwing money away, and if there’s any money tip that’s worth reading, it’s that you shouldn’t throw money away.

If you want to have a credit card to start establishing your credit worthiness now, check out the next tip.

Get a Credit Card in Your Name, and Let Mom Use It

No, not to buy her romance novels, crocheting supplies, or anything else that moms are interested in. Instead, have her use the card every time she plans on sending you a care package, or buying you a gift. She can use the card and then pay off the balance on your behalf each month.

This won’t help you develop good money management habits, but it will certainly take all of the risk away from using a credit card to establish a solid credit score. You do, however, have to be absolutely certain that your mom won’t use your card for a shopping spree (and there are plenty of you who know your mom would do such a thing).

Don’t Ever Try Keeping Up with the Joneses

While you’re a college student you have a lot of leeway that the rest of us adults dream of. You can dress like a slob without being given as much as a second glance. You can feast on ramen noodles and no one will question your sanity. In most college towns, you can even get by without a car (if for no other reason than the fact that some of your friends have cars).

Use this to your advantage. Instead of trying to buy the nicest clothes, shop at the local thrift store (I understand that’s rather trendy these days). Instead of buying a new MacBook with credit, pick up a refurbished dell for a quarter of the cost. No one is going to judge you, and all of the money you save can help fuel your financial goals.

Get a Job

I didn’t even think of mentioning this until I’ve written and reviewed the first draft. I assumed it went without saying. But then it dawned on me – plenty of you are going to question how viable any of this is since it requires a source of income.

Life is going to be full of choices that require some form of sacrifice. They’re going to get more difficult as you get older, too. The biggest challenge right now is choosing between unfettered time for socialization and getting a job.

Just remember – you’re young and full of energy. You’ll have plenty of time to put in the hours studying, working, and making those ever-important social connections that will help you further your career. But, who am I trying to kid? Most of you won’t even use your time socializing to build these types of relationships. You’ll just go out and get wasted.

Throw all of that away in favor of getting a job and generating some revenue for yourself while your friends throw all of that time away. When they’re wondering why you’re so successful, you’ll know the answer.

Make Some Money on the Side

If you haven’t heard of Ramit Sethi, then you haven’t been exposed to some of the best financial advise for anyone in any age bracket. He has a great course that will teach you how to earn $1,000 a month on the side – all with the intention of helping you improve your financial situation.

I can’t recommend you purchase the system, though, because it’s very expensive, and I’m trying to help you learn how to save money, here. So instead, I’ll encourage you to learn everything you can about making some money on the side and actually putting that information to work.

Even if you just pick up some cheap, easy, freelance writing assignments, you’ll end up with a bit of extra cash that can help keep you out of debt while fueling your investment accounts. And since you probably don’t have a family and fifty million other financial obligations, yet, you’ll have the flexibility to experiment with different “side jobs” to generate serious dough.

If you do it right, you won’t even need to have a wage-based job, and you’ll come out of college with a reliable source of income – something most of your peers won’t be able to do.

Learn How to Go on a Cheap Date

You’re in college. You’re going to be looking for romance. Romance involves dates. Don’t spend a lot of money on dates.

I wish it was as easy as that. If you’re a guy, you probably think that girls judge you based on how much money you’re willing to spend on them. If you’re a girl, you probably think that a guy who doesn’t spend a lot of money on you doesn’t like you.

While both of those are rather shallow stereotypes, they are none-the-less accurate, and perpetuated by our culture. Instead, take the time to learn how to have an amazing, affordable date. There are plenty of websites dedicated to this, but I found some of these tips to be absolute gold.

Start Saving for Retirement Now

You’re in college, so I’m sure you’ve heard the phrase “the magic of compounding interest.” I won’t insult your intelligence by breaking it all down for you, but even if you’re only able to squirrel away a small amount each year, you’ll be able to retire much more comfortably (or much earlier) than those who wait to start until later.

You might not be able to take advantage of employer contributions to your 401k, yet (you’re probably not even working), but that shouldn’t stop you from opening your own money market account, index fund, or mutual fund. Each of these will follow the losses and gains of the market rather closely – and when you consider the fact that the annualized rate of return for the S&P 500 is 10.6%, you’ll realize that it’s virtually impossible to “lose your shirt” in the stock market.

The key is to develop the habit of saving and investing now, so that you continue to do it even after you graduate from college.

Design Your Chief Definite Financial Aims ASAP

If you haven’t already read Napoleon Hill’s The Law of Success, you should make it a point. Napoleon Hill defines a chief definite aim as one that is:

  1. Specific
  2. Time Bound
  3. Measurable

You may have also heard of a similar goal-setting strategy, known as S.M.A.R.T. goals – these are: specific, measurable, attainable, relevant, and timely. It doesn’t matter which methodology you prefer to adopt – you need to have clear financial goals as soon as possible, so you can start working towards them. Here are two examples:

  1. I will own a single family home with a value of $300,000 with no outstanding mortgage payments within three years of graduating with my Bachelor’s degree
  2. I will have $150,000 in my investment accounts on or before the day I graduate from college

Notice that each of these are clearly defined, measurable, and have a deadline. The reason they’re so important is that they actually give you a target to hit. You might fall short, or you might exceed it. Either way, by having at least one chief definite financial aim, you’ll be working towards something that matters in the long run.

Buy a Home as Soon as You Settle Down

If every friend I know who waited to buy a home until they were ready to have children could go back and do it differently, they would have bought their home way sooner. Why? Because they could have rented the spare rooms out to their friends and paid off their mortgage about 15 years sooner.

Instead of waiting to buy a home until you’re ready to have children, plan on buying one as soon as you know you’re going to be sticking around for a while. You’ll be able to rent each room to a friend and split the cost of the utilities, too.

You can take the extra money (that would have otherwise gone towards your mortgage) and put it in your investment accounts, or towards your mortgage. Either way, you’ll end up way ahead of the curve.

Wait to Have Children Until Your Financial House is in Order

There are two schools of thought when it comes to having children:

  1. Have them while you’re young, so you can enjoy your empty nest when your career is established, and the money is flowing in
  2. Wait to have them until you’re a bit older and a bit more financially stable

While option number one certainly has some benefits, it’s not the best option for those of you worried about keeping your financial matters in good order. Most of the people who subscribe to option number two aren’t usually doing it for financial reasons, though – they just want to be able to provide materially rich lives for their kids.

If, however, you’re really looking at the big financial picture now, you’ll be able to put things into perspective. You can’t buy a house and rent the rooms out to your friends quite as easily when you have kids. You’ll also need a bigger house, and you’ll have to spend a lot of money on extra insurance, diapers, and all sorts of other things.

By waiting to have children until you have at least established your investment accounts and own your home outright, you’ll be at a serious financial advantage.

Bonus Tip: Screw College

I’m going out on a limb, here, but it’s worth mentioning. I’m sure you know plenty of self-made millionaires that didn’t graduate college (Bill Gates being the most famous). But there are plenty of others who are earning $100k or more per year without having finished college.

I can’t tell you that college isn’t right for you, but if you find yourself with an opportunity to generate a serious income without having to accumulate all of that student debt, then it might be worth considering it.

With a little bit of research, you’ll find that the starting salary for most degrees falls between $35,000 and $50,000. Dig a little deeper, and you’ll find that there are dozens of career opportunities starting at $75,000 to $90,000 with little more than on the job training.

Sometimes it seems like earning a college degree is just an intellectual form of keeping up with the Joneses.

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