Since I started college, I’ve taken a lot of steps to improve the way I manage my finances in a way that gives me the freedom to spend a comfortable amount from month to month while still setting a decent portion aside for savings and establishing solid credit, and I thought I would share what I’ve learned so far for anyone who might not have figured it out quite yet. Obviously I’m no expert on any of this stuff, and I’ve had a wealth of help and advice along the way as well, so take what I say with a grain of salt and do whatever works best for your own financial needs!
1. Get a job on campus: I could probably write a whole separate article on this topic in itself, but when it comes to managing personal finances specifically I think that getting a job on campus is really important. For one thing, a lot of jobs on campus require little to no prior experience which makes them easier to get than off campus positions, and they’re really flexible with school and any other extracurricular you might have and include options for pretty much anyone with any schedule, so there’s really no reason not to get one and make some spending money even if it’s just 5-10 hours a week. Plus, even if you have financial help from your parents or other relatives, saving money is way more difficult when you’re only working with one source of income.
2. Get a credit card: There are options with a lot of banks and credit card companies for people with no previous credit history, but the one I highly recommend is Discover because it’s extremely secure and is catered more directly to young adults and students looking to establish their credit and, unlike other banks and companies, they don’t require a heavy down payment before they set up your credit line. Getting a credit card might sound a little risky, but as long as you use it sparingly, pay more than the minimum payment every month, and get everything you can out of the cashback options, the benefits far outweigh the costs.
3. Get a grocery store membership: No matter which store you prefer, memberships and rewards cards are a really great way to save yourself a few dollars here and there that really add up in the grand scheme of things, but I personally suggest getting one with a store like King Soopers with affiliated gas stations because their rewards program includes a system of fuel points that add up to save a pretty significant amount of money on each tank of gas, because that’s something that makes the most noticeable difference in my monthly expenses. (Obviously if you don’t have a car that suggestion doesn’t apply to you but you should still get a membership at your preferred store.)
4. Set up a savings account: This one should be the most self explanatory of the bunch, but I’ve met a surprising amount of people that don’t have their own savings accounts set up so I thought I should include it in this list. The biggest thing to keep in mind with savings accounts is to double check the rules your bank has set up for savings to checking and checking to savings transfers per month, because the last thing anyone needs is to get charged for exceeding a transfer limit.
5. Spend money to save money: As college students, I think that trying to overly restrict spending and save almost every penny you make is a setup for failure. For me, I started saving the most money when I started letting myself buy at least one thing with every paycheck that has nothing to do with school or household necessities. Once I buy that one thing, I find that I’m way less likely to splurge between paychecks or put unnecessary items in my basket when I’m out shopping (especially at Target, which used to be my biggest money drain), and then I’m left with way more to put in my savings account with each new paycheck. The system for saving that works the best for me is deciding how much of every paycheck I want to keep in my checking account and putting everything else in savings, then when the next paycheck comes I keep the set amount the same and put everything else in savings, and so on and so forth. That way, I always maintain a comfortable amount of money in checking while still putting a considerable amount in savings and it turns out to be a real win-win system.
My final thought on personal finance is this: parents, guardians, older siblings, or whoever else you may want to consult about some of this stuff are definitely an important and valuable resource when it comes to getting your feet wet in finance management, and if they help you out financially they do have a say in what happens with the money they give you. With that being said, at the end of the day it’s still important to remember that any money that you earn on your own is your responsibility to do with what you will, and as a young adult you have the final say in what happens with money listed under your name.