25 Financial Tips for College Students

Many of this fall’s college freshmen will be managing their own finances for the first time. And a lot of them won’t be ready.

So, we asked Wall Street Journal readers to share their best advice for college students handling their finances on campus.

Some readers gave us the tried-and-true advice they received as students years ago. Some parents shared the pointers they gave their own kids. Others imparted wisdom they wished someone had actually shared with them.

Here is some of that advice.

Write it all down

The first thing I suggest is for students to set a 15-30 minute appointment with themselves once a week that is dedicated to personal finances. Be loyal to the ritual, like heading to the gym or brushing your teeth.

Start that appointment by writing down everything you earn and spend. Everything. This serves three functions: 1) It’s a way for us to “feel what we spend,” since credit cards and apps can minimize that; 2) It makes you more mindful of spending habits, pricing and unused subscriptions; and 3) It’s the basis for building a budget. From this weekly reckoning, new healthy habits will grow, such as living within one’s means, automating savings, building credit and fraud awareness.

If it’s the only financial habit they truly develop in college, they’re in great shape and can build upon that heading into young adulthood.

• Jim Curran, Plymouth, Mass.

Take a class

Take a personal-finance class no matter what your future career.

• Donald Davis, Champaign, Ill.

Get a part-time job

Work at least a few hours a week at a job. It will help focus your free and study time, and remind you why you want to strive for good grades so that the current job won’t also be your postcollege job. Work may help keep you from falling into the credit-card trap of paying later, as you will have worked hard for that money. Most important, you will meet people and make friends with others you normally wouldn’t have met.

• JC Biaggio, Fort Myers, Fla.

Establish expectations

When my children started college, I laid out this plan. I would pay for tuition, room and board based on two factors: 1) Maintaining an overall GPA above 3.0; and 2) Calling home twice a week to let me know they were alive. My rationale was that companies prefer to hire those with a 3.0 GPA or above, and if I was paying, then that deserved the respect of two calls a week. Additionally, fraternity or sorority membership costs (if they were interested) were 100% theirs. Parents should encourage both personal growth and academic achievement for their college-age kids. One of our children graduated a semester early, and we were able to put those funds toward their graduate degree.

• Joanne Jakubowski, Woodridge, Ill.

Track your finances

Be in the driver’s seat, all the time. Look at each and every account or credit-card statement and track what comes in and what goes out. Use aggregators like Mint or Google Pay, which show your financial picture with a single glance. If you want to be in a position to create your financial future, you need to know your financial present.

• Michael W. Esser, Los Angeles

Out of sight, out of mind

In college, I started a habit of putting at least $25 a week into savings. It has added up to early retirement for me. I never had that money in my hands, so I never missed it.

• Carlos Gomez, Arlington, Va.

Save, subsist and celebrate

Create a budget and stick to it. Your first priority is to determine an amount to routinely save and automate this routine. After you have covered your savings goal, pay for your fixed living expenses and other needs. If there is money left over, only then eat out or go out.

• Gilbert Levy, Gainesville, Fla.

Do you need it or want it?

Focus on needs over wants, especially for dorm-room shopping. With designer dorm-room décor taking over TikTok, it can be easy to get caught up in the items we want more than the ones we need. For many teens, it’s their first time decorating their own space. They should carefully consider practical needs like storage for their room vs. fancy bedding or high-tech electronics.

• Jennifer Seitz, Atlanta

Wait a day to buy

Avoid impulse spending. For anything that will cost you over $50, wait one day before buying. Plan ahead on all expenses, and once the budget has been met, stop spending. This works well on dates, dinners and road trips.

• Tim Covey, Winston-Salem, N.C.

No loans for living expenses

Students and parents should be rigorous in borrowing only for books and tuition. Living, transportation and entertainment expenses shouldn’t be financed with debt. This is why some people finish college with monstrous debt looming over them. It’s less the tuition and books and lab fees, and more room, board, transportation and entertainment expenses that sink their ships before they even get out of the harbor.

• Jim Masone, Atlanta

Learn assets and liabilities

The best financial advice I received was by reading “Rich Dad, Poor Dad” by Robert Kiyosaki as he explains in very simple language the difference between assets and liabilities. It’s so obvious but most people miss the fact that your focus should be on accumulating assets that generate income. If you put money on things that are not generating income, that thing it’s probably a liability in your personal balance sheet, which will drag you down financially. I read it again 20 years later and the message resonated even more with me. It’s so simple and yet so powerful.

• Conrado Petrov, Peoria, Ill.

Budget for a broken heart

College romance can be brutal, and either a quick trip home for TLC by the student, or a trip by the parent to soothe the broken hearted, is likely to be required over the space of four years. Know this and tuck a few bucks away to cover this contingency. It may seem extravagant, but it’s cheaper than a failed semester.

• Cathy Pitfield, Los Angeles

Treat credit like cash

My parents instilled in me that if I was going to get a credit card, I had to treat it like a debit card and not spend any money I didn’t have because of the high interest rates.

• Becky Rotem, Burke, Va.

Pursue more scholarships

Apply for every possible scholarship. Unless you come from a family that is underwriting the expense of college, pay attention to the career field you are choosing. These steps will make a huge impact on your ability to repay the debt you will be incurring in attaining your degree.

• Keith Nelson, Newport, Ore.

Live off campus

The best advice I got was to move off-campus, to a nonstudent apartment. Rents are cheaper if it isn’t directly related to the university. I went from paying $5,000 a year for a shared room on campus to $3,800 (including utilities) for my own room and bathroom and could still walk to campus. You have to sign a lease and set up utilities, which can be complicated, but this is all good life experience and it can help build your credit.

• Andrew Gannon, Herndon, Va.

Build your credit score

Your credit score means everything. Your options will be extremely limited if you are reckless and irresponsible, so make sure you always pay what you owe and try not to accrue too much debt. The credit score determines whether the landlord accepts your application to move into that apartment. It decides if you will get a loan for that car or house.

Credit-card debt comes at a high cost, and if you go too deep, you’ll find it like swimming in quicksand, barely able to cover the interest, much less pay down the principal. But if you only charge small items you can quickly pay off, you’ll be boosting your credit score exponentially with those on-time payments and keeping the majority of your credit line available, showing lenders you are low-risk.

• David Ginsberg, New York City

Resist peer pressure

My roommate’s father was an executive, so she used to flash money without restraints. My dad gave me a credit card for emergencies and I started taking my friends out for drinks. It added up to $5,000 in one month. My dad confronted me at Christmas and took the card away and made me pay for my foolishness. It took me five years. Lesson learned.

• Anne Kiltinen, Hackensack, N.J.

Consider housing expenses

Parents and students should anticipate housing expenses beyond what the university estimates. We knew that after two years in the dorms, our daughters would be responsible for finding housing off-campus. What we didn’t fully appreciate at the time was just how competitive and expensive it would be. Leases must be signed (with a guarantor), security deposits and other fees paid up front, utility accounts opened and (in some cases) furniture and air-conditioning units purchased from previous tenants or bought new.

• Leslie Gruskin, Annapolis, Md.

Master compound interest

The most important thing I learned in college is the theory of compound interest, which is the earning of interest on your original savings plus any accumulated interest. Along with reinvestment of dividends, this has the effect of vastly increasing the value of your investments over time. It is at the heart of the investing principles of both Warren Buffett and John Bogle. The best book I ever read on investing is “A Random Walk Down Wall Street,” by Burton Malkiel.

• Robert Franz, Rancho Mission Viejo, Calif.

Maximize the meal plan

Eating out is a great way to decompress but balance that desire with the number of meals you have left on the meal card that you have paid for already.

• Weston Hayes, Manhattan, Kan.

Loans aren’t extra money

You may perceive that you have “extra” money sitting in your account from student loans. Leave that money alone until the tuition bill comes. And, even if you are asked if you want to borrow more money from private lenders or credit-card companies, don’t. Having a little financial stress in college will help prepare you for the “real world” after you graduate.

• Randy Catron, Denton, Texas

Start with a dime

I remember this like it was yesterday (and it was the late 70s) when a professor said to the class, “If you save 10 cents of every dollar you earn, you’ll become a millionaire.” Here was something that wasn’t on my radar. Wow, I could become a millionaire! Today, that number might be 15 cents, due to inflation, and a million doesn’t go as far as it used to. But compounding is the bottom line, and I’m still thankful to that professor.

• Terry Phillips, Kalamazoo, Mich.

Buy in bulk

I found the book “The Only Investment Guide You’ll Ever Need” by Andrew Tobias to be both an easy read and an excellent primer for understanding personal finance. He recommended buying nonperishable food like canned tuna in bulk, both for the savings and to use the case as furniture. I laughed until I realized how practical that suggestion was, and how it fit a student budget and lifestyle.

• Louis Verardo, Centerport, N.Y.

Consider the value of time

In undergraduate business courses, I discovered charts depicting the Time Value of Money (TVM). I am a visual learner, and these charts had a profound impact on how I saved and invested my resources early in my professional career. TVM actually informed my decision to sell my beloved Corvette and get a 4-door sedan. I invested what I would have spent on expensive repairs and maintenance in appreciating assets that have increased over the last 20-plus years.

• Christopher Mulder, Alexandria, Va.

Don’t forget to have fun

I’d share what I told my sons as they headed for college: Don’t obsess with finances (as I know you won’t) but don’t ignore them either. Learn to save a little from your summer and part-time jobs, and here is a brokerage account where you can buy a couple of stocks with your savings and watch how they do. Here is a credit card that you can use any time in case of emergency, or when we feel like rewarding you for an accomplishment or milestone success. Ask us when you have a finance question and use common sense when spending your money. You’ll be fine. Good luck and have fun while learning to be an adult.

• Robert Risney, Arlington, Va.

Demetria Gallegos is an editor for The Wall Street Journal in New York. Email her at [email protected].