Get Financially Fit
10 tips to become a financially savvy college student
Dec 10, 2020
The experience of being a broke college student has been glorified by university alums for years on end. Much like the plight of the starving artist, the broke college student is seen as a status to be desired, a status to brag about – elevated above college students with wealthy parents who fund extravagant spring break trips and expensive nights out.
In reality, there’s not a lot to love about being a broke college student. Sure, middle-aged alumni reminisce fondly about the weeks on end they spent eating ramen noodles, but maybe they’re forgetting the digestive issues, the malnourishment, and the struggle to do schoolwork because of the hunger. Or maybe they weren’t really as broke as they say.
Luckily, there are ways to become less of a broke college student, and you don’t have to have wealthy parents to do it. Learning to be financially savvy in college can set you years ahead of your peers who don’t think financial wellness is in reach for them or who just don’t know any better.
So if you’re interested in creating a better quality of life during your studying years, read on, my friend. Here are 10 tips every smart college student should know about how to become more financially savvy and enjoy your time in college to the utmost.
1. Apply for FAFSA
FAFSA is the Free Application for Federal Student Aid. Every prospective college student should fill out this form, even if you don’t think you’ll qualify for financial aid. The truth is, no one knows whether they’ll qualify until they fill out the form, because eligibility depends on a lot of factors.
The FAFSA form doesn’t just assess eligibility for federal aid; it also automatically applies for funds from your state and possibly your school. In fact, some schools won’t offer you any scholarships – or even consider you for scholarships – if you haven’t filled out a FAFSA form.
It’s best to fill out FAFSA sooner rather than later, because there are many things you need to fill out the form completely. You can find a comprehensive list here, but this list changes every year. You can fill out the FAFSA form as early as the fall semester of your senior year in high school!
2. Create a budget
Budgeting is essential to understanding where your money goes. It might feel demotivating to track your spending when you’re not bringing in a lot of money right now (no one likes to be in the red). But budgeting can help clarify just how expensive it really is to eat out for lunch every day, and could end up saving you hundreds of dollars a month.
3. Get rental insurance
Having rental insurance protects your belongings in case of theft or an unfortunate circumstance such as a flood. The worst thing would be to have your expensive new laptop stolen from your dorm room – with no way to replace it and no way to work on class assignments from home anymore. Protect yourself with rental insurance!
4. Open a student bank account
Student bank accounts come with lots of perks. Banks that offer student accounts know you’re tight on cash, so they usually waive fees assessed to other account holders, such as monthly maintenance and debit card fees.
Look for a bank that doesn’t charge overdraft fees, or at least charges less expensive overdraft fees, which recently hit a record high average of over $36 per transaction. When you’re tight on cash, overdrafting your account is an unfortunate risk, so factor this into your account shopping and save yourself more money down the road.
5. Build your savings
Build your savings while you can. If you’re reading this article early enough, get a summer job before your first semester and stash as much money in your savings account as possible. You’ll be glad you did later in the semester when you just need that fancy coffee pick-me-up to get you through the day.
And, if you work in retail or the restaurant industry, a lot of these places will be happy to have you back during winter break! It’s a chance to make a bit more money in between semesters, and they’ll be glad to have the help during the busy holiday season.
6. Save for upfront rental costs
Speaking of savings, it’s never too early to start planning for your first apartment or rented house. As a first-year student, you’ll probably get to live in the dorms. But after that first year, you may want to find a place to live off campus. This is exciting, but there are upfront costs of becoming a new renter, such as:
- An initial deposit of first and last month’s rent (in some cases)
- A security deposit (which you’ll get back if the property is in good shape when you move out)
- Rental insurance
- Application fees
- Credit check fees
These upfront costs can really add up, sometimes to a few thousand dollars, so save up well in advance and be clear on how you’ll split these costs with your roommates.
7. Take advantage of student discounts
Ah, student discounts. One of the major perks of being a college student. Chances are, restaurants, movie theaters, and even clothing stores around campus offer student discounts to incentivize college students to come in and shop.
Finding places near you that offer student discounts – and frequenting those locations – can save you a few bucks which, over time, adds up. Every little thing helps, right?
8. Get a part-time job
This is one of the best things you can do as a college student. Working a part-time job can give you extra spending money and help you build up your savings for those spring break trips and future rental costs.
If you’re worried about balancing part-time work with your studies, take a deep breath. Consider looking for a job on campus first where the manager might be more understanding of your class schedule.
9. Ask for help
If you’re struggling financially, remember you’re not alone. One study found that more than 70% of college students are stressed about finances. If you can safely go to family for help, don’t let your pride get in the way. They probably want you to succeed just as much as you do.
If that’s not an option, your university may offer financial wellness resources and student food banks to help you make it to your next paycheck. Take advantage of resources around you and ask for help when you need it.
10. Start the path to financial wellness
Your college education will improve your job prospects and open doors you otherwise wouldn’t have access to. But building a successful life isn’t just about landing a great job. You also need to be capable of managing your own financial wellness.
One way to start building financial health in college is to build your credit history. Good credit opens up opportunities down the road such as getting approved for a mortgage or car loan, or even getting a job offer in some cases. Plus, having good credit comes with other perks, like discounts on your auto insurance and credit cards that offer super great cash back or travel rewards.
The good news is, you don’t have to have a credit card to start building credit history. You may want to try a solution like LOQBOX, which is a free tool that helps you build credit history while saving money. You can learn more about how LOQBOX works here.
For now, have fun preparing for college. We hope you make use of these financially savvy tips to start building a healthy and fulfilling life now so you can ultimately enjoy these next few years with more fun and less stress!
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