How to Save Money in College [6 Proven Strategies]

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In this article

If you want to discover…

  • The best tips & tricks to save money in college
  • How to get ahead with your student loan payments
  • How to set yourself up for financial success while in college

Then continue reading this complete guide.

Let’s get started!

the millennial money woman blog post "how to save money in college 6 proven strategies"

Introducing: How to Save Money in College 


When I started my undergraduate studies, I wish I knew some of the things I am about to share with you. 

Although I managed to graduate debt-free – while working 40 hours a week on top of taking the maximum class load – I still left some money sitting on the table. 

And to be honest, I didn’t have the slightest idea which questions to ask. 

All I knew was this:

  • Try to have some fun
  • Learn as much as possible
  • Worry about finding a job in my senior year

Then again, how would you know which questions to ask?

However, one thing is clear: As a young college student you have time on your side. And lots of it.

“Even if you have just a spare $5 to save (and invest) each week, do it. In the long-run, those $5 will likely amount to $1,000s of dollars through the power of compounding interest.”

As America surpasses the $1.5 trillion-dollar federal student loan debt marker, it becomes apparent that students as a whole need to embark on their saving and investing journey as soon as possible.

Unfortunately, the average student graduates with just about $29,800 of debt – up from $18,550 from 2004. 

Not the best way to start a career – with almost $30,000 in debt.

For those exact reasons, it’s more important than ever to save (and make) money in college so that in the long run, college students pave a more solid foundation toward a better financial future.

the millennial money woman blog post "the long term impact of student loan debt"

The Impact of Student Loans [Long-Term]


Before we go into some of the best strategies to save money while in college, I thought it would be a good idea to spend some time explaining the actual impact of student loans – and why I am calling on all students to save money in college.

“In fact, even if you “just” graduate with about $30,000 in student loan debt, that means the time you spend paying off that student debt could slash your future 401(k) savings by as much as $325,000 by retirement.”

Even if you are one of the few, fortunate college students that does not take on college debt, it’s time to start saving.

Check out some of these shocking statistics, below:

As you can see, student loan debt can have some serious, crippling impacts over the long run.

That’s why saving money – even if it’s just $5 – while you are studying in college or university is so important for your financial future.

6 Best Tips to Save Money in College 


As I packed my bags for my first year at university, I was told by so many people that these next 4 years would be the best years of my life – so I should enjoy it. 

I love having fun… but not at the cost of going into debt. No way. 

As I started my journey through my university career, I was fortunate enough to graduate without student debt. 

However, that was as a result of:

  • Very [very] hard work
  • Graduating 2 years early
  • Working 50-plus hours each week to make extra money
  • Loading up on the maximum number of classes each semester

It wasn’t easy. 

In fact, if I had known about some of the tricks I’m about to share (especially tip #2!), I would have made my life so much easier – and I would have probably walked away from my university with more money in my pocket. 

Check it out!

make a budget

1. Make a Budget 


You guessed it – I never made a budget while I was in college. 

In fact, I was flying by the seat of my pants, if you will, basically spending a little here and saving a little there. 

There were times where I simply refused to look at my credit card statements because I would be so scared to see my actual expenses for fast food joints. Yikes. 

[It gets worse: When I actually did peel back the layers of the onion and saw how much I spent on fast food – I had a few heart palpitations! It was not a good number… I was glad I did look at the numbers].

So what are the actual benefits of making a budget?

  • 100% control over your own money
  • Eye-opener for bad spending habits
  • Tool to track [and achieve] your financial goals
the millennial money woman blog post "3 benefits to making a budget"

As I started to track each cent I spent – I certainly couldn’t wrap my head around some of the areas I was spending money (like on coffee and energy drinks!). 

Sure, I was a college student studying many late hours but I really shouldn’t have spent north of $200 every month on coffee and energy drinks! 

It was insane. 

Listen, if you feel like you’re struggling right now to budget properly, check out the mobile app Simplifi.

If you’re a visual learner and urgently need to get a sense of how your spending is going, it’s time to level up and check out Simplifi:

  • First 30 days are free
  • The app is exceptionally user-friendly
  • Simplifi is extremely visually appealing
  • If you need help with a spending plan – Simplifi’s got it
  • If you are looking for a goal-based budget, Simplifi’s got it

Ok, so Simplifi is pretty awesome.
Yes, there is a small subscription fee of $3.99 per month.
But in my opinion that $3.99 per month will pay for itself when you realize you can be saving $80 on clothing or eating out!

On the bright side: Opening my eyes to where I was spending my money allowed me to pivot and redirect my over-spending and instead slash my coffee and energy drink costs from $200 to $20 every month and I paid the $180 I saved toward my student loans!

For example: $1 purchase per day X 30 days per month X 12 months in 1 year = $366 spent per year. 

That’s $3,660 spent every 10 years. 

Cutting down even $1 a day on expenses will make a difference to your budget – and bigger financial picture.

become financially literate

2. Become Financially Literate 


Growing up, I always knew 2 things about money:

  • How to make money 
  • How to spend money

But the stage that happens in between the making and the spending is what I didn’t know. 

I had no idea how to invest or grow my earned money. It was a grey area.

“Humans naturally shy away from the unknown. But I dared to be different.”

I set out on my quest to become financially literate – but sadly a little too late. 

At that point, I had already graduated from my undergraduate studies (and my undergraduate studies did not focus on finance – instead, I focused on marketing management). 

Dare I say, had I been motivated – and had I known – about the benefits to being financially literate, I may have saved hundreds, if not thousands, of more dollars by now. 

Below are some shocking statistics as it relates to our country’s financial fitness:

  • 78% of American adults live paycheck to paycheck
  • Less than 20% of adults are confident in their savings rates
  • 80% of millennials failed a basic financial literacy questionnaire
  • 66% of American families do not have an emergency savings fund
america financial fitness statistics

Clearly, we have some catching up to do.

What’s worse is that America is as financially literate as Botswana – yet America ranks as the world’s #1 GDP while Botswana ranks in 114th place. 

There’s a pretty big discrepancy. 

So why financial literacy?

“The No. 1 benefit to being financially literate is that we are given the power to take control of our financial lives by making smart financial choices.”

build your credit

3. Start a Credit Card & Build your Credit [the Smart way]


When I went to college, credit cards and building credit the smart way were the 
last 2 things on my mind. 

Almost half – 57% to be exact – of undergraduate university and college students use credit cards (up from just 30% of undergraduates in 2013).

However, the real question is: are they using their credit cards wisely?

Some benefits that come from a good credit score include:

  • Qualifying for lower interest rates on auto loans
  • Qualifying for lower interest rates on mortgages
  • Qualifying for lower insurance (such as car insurance) quotes
the millennial money woman blog post "3 benefits of a good credit score"

Moreover, a good credit score is typically considered to be a 661 and above.

However, it takes time to build a top-notch credit score – which is why starting in college is a great way for you to prove to the banks and other lenders that you are a reliable person when it comes to paying back your debt.

What if you don’t have credit?

All you do is open an account with Self.

Self helps you build your credit history (and your FICO score) even when you don’t have credit.

What you do:

  1. Apply for a “loan” using a CD
  2. CD is FDIC insured
  3. You make monthly payments until you’ve satisfied the CD amount
  4. The CD amount will be released to you

The good thing with Self Lender is that your payment history will be recorded. 

If you never missed a loan payment, Self Lender is an easy way to build credit, when you have no credit to apply for a credit card!

[Hint: A higher credit score can lower your interest payment, which saves you money].

Below are 3 methods to help you build your credit – fast and smart:

  • Pay all bills on time
  • Increase your credit limit 
  • Don’t close unused credit cards 
pay all bills on time

Method #1: Pay all Bills on Time

Pay off every bill, every month – no excuses. 

This includes your student loan minimum payments. 

That’s right – if you miss a student loan payment or fail to pay the minimum amount of money, then there is a high likelihood that your credit scores will be negatively impacted.

increase credit limit

Method #2: Increase your Credit Limit

This tip is based on a fundamental calculation that plays into the algorithm calculating your credit score: the credit utilization ratio. 

Let’s say though that you are currently in the process of paying off your credit cards and your current credit utilization ratio is 40%.

A 40% credit utilization ratio could mean the following:

  • Current credit limit: $10,000
  • Current credit balance: $4,000

If you plan to reduce your credit utilization ratio to 30%, for example, you may have to apply to receive an increased credit limit:

  • New credit limit: $18,000
  • Current credit balance: $4,000
  • New credit utilization ratio: 22%

The key is not to use your increased credit limit, but to continue your strategy in paying off your credit card balance.

dont close unused credit cards

Method #3: Don’t Close Unused Credit Cards

Closing unused credit cards could mean the following:

  • You may lose the credit history you built with this credit card
  • You may lose the payment history you built with this credit card
  • You may lose the credit limit – and with that your credit utilization ratio

Think long and hard before you close an unused credit card. 

It could negatively impact your credit score.

If you’re looking for your best credit card match, I’d suggest checking out LendingTree.

Lending Tree is like a virtual matchmaker and can pair you with your best credit card match based on your preference for:

  • Card types
  • Credit ratings
  • Low interest rates
  • Rewards programs
  • Top credit card companies

And so much more. 

Check out the credit card offers and slowly (and moderately) start building your credit.

start paying off your student debt

4. Start Paying your Student Debt


The best thing you can do for yourself and your wallet is beginning the journey to pay off your student loan debt as early and as fast as possible.

As we explored earlier, student loan debt can be a burden, well into your 50’s. 

Student loan debt can keep you away from accomplishing some pretty spectacular life milestones, such as:

  • Starting a family
  • Purchasing a car
  • Settling in a home
  • Other big-ticket purchases

To provide a quick comparison on how many more people are suffering from student debt, let’s take a look at the following statistics:

7

Image: The Millennial Money Woman | Source: CNBC

As you can see, over the years, student loan debt has hovered and continues to follow those well into their 50s.

To lower your chances of having a cloud of student loan debt in your 50s, the first thing you can do is start paying off that student loan debt – while you are in college.

The first step is for you to understand the difference between subsidized and unsubsidized loans.

the millennial money woman blog post "subsidized vs unsubsidized student loan comparison"

With that in mind, let’s assume that you are an undergraduate student, and have some subsidized loans. 

Here’s the trick: You want to pay as much as possible toward your subsidized student loans while in college – because that’s when your interest will not be accruing.

The key here is this: If you have subsidized student loans and you can earn money while in college, use as much of that earned income as possible and pay that toward the subsidized student loans. 

It might be time to refinance your student debt – especially in the late 2020 / early 2021 low interest rate environment. 

I would recommend checking out SuperMoney Student Loans.

SuperMoney Student Loans offers the following:

  • Lower rates
  • Loans up to $300k
  • Comparison of rates from competing lenders
  • No hard inquiries and no impact on your credit score
It’s super easy to to apply online and check out your options.
Let’s crush this student loan debt together!
graduate early

5. Graduate Early


When I started my 4-year track through my undergraduate years at my university, I knew it would cost me a lot of money. 

There are so many things to consider when attending college:

  • Food costs
  • Tuition costs
  • Tuition & Fees
  • Textbook costs

And although the tuition and textbook costs will likely remain the same, whether you accelerate the number of classes you take or try to spread your classes over 4 or even 5 years, your housing and food costs could likely be cut in half assuming you graduate early.

I thought I might share my own personal example, here. 

This is how much college would have cost me for the full 4 years:

Year 1 Year 2 Year 3 Year 4
Tuition Cost
$9,308
$9,308
$9,308
$9,308
Textbook Costs
$1,240
$1,240
$1,240
$1,240
Housing Costs
$10,440
$10,440
$10,440
$10,440
Food Costs
$4,500
$4,500
$4,500
$4,500
Earned Income
$0
$0
$0
$0
Total
$25,488
$25,488
$25,488
$25,488

Grand total if I had graduated in 4 years: $101,952. 

Yikes.

Now, because I decided to graduate early (I graduated in 2 years) this is how much college actually cost me:

*Keep in mind, my tuition and textbook costs doubled – so they still come out to what they would have cost me at the end of the 4 years (since all you’re doing is condensing the same class load – just from 4 years to 2 years).*

Year 1 Year 2 Year 3 Year 4
Tuition Cost
$18,616
$18,616
$0
$0
Textbook Costs
$2,480
$2,480
$0
$0
Housing Costs
$10,440
$10,440
$0
$0
Food Costs
$4,500
$4,500
$0
$0
Earned Income
$0
$0
$50,004
$50,004
Total College Cost
$35,036
$35,036
$0
$0

Grand total because I graduated in 2 years: $70,072. 

And in reality, I came out ahead because I worked while others were studying.

Not only would my 4-year studies cost me $30,000 more but I also did not have the chance to earn $100,000+ in salary for year 3 and year 4 that I did when I graduated early.

rent or borrow

6. Rent (or Borrow) Used Textbooks


I have literally been kicking myself since I graduated college… 

One money-saving tip I failed – and miserably too – was saving money through renting or borrowing used textbooks. 

What did I do? 

You guessed it – I bought new textbooks!

One of my semesters saw me spending north of $600 (new) for an economics textbook – that I literally only used twice. 

It was such a waste of money and I just didn’t think to borrow the book or rent it elsewhere.

Nope. Yours truly went right to the college bookstore – and boy did they see me coming. 

As you can see, I made some costly mistakes in college that I hope you won’t have to repeat at any point. 

Below are 4 suggestions I have when it comes to drastically lowering the cost of your college textbooks:

  • Consider renting textbooks
  • Consider buying used textbooks through bookstores
  • Consider borrowing textbooks from roommates or classmates
  • Consider splitting the cost of a textbook purchase with one of your classmates (remember to write and sign an agreement just in case)
lowering college textbook costs 1

You can also consider using online stores for discounted textbook purchases or rentals. Some online stores include:

I’ve had some experience buying textbooks with 2 of the 3 listed textbook services above: Book Holders and Campus Book Rentals.

Campus Book Rentals is a good college textbook site for:

  • Renting textbooks
  • Purchasing textbooks
  • Free shipping both ways
  • Still being able to highlight in rental textbooks

You can rent these books for 55, 85 and 130 day periods – plus you can always select your own return date as well.

It’s certainly worth considering doing your research before making those insanely costly mistakes as I made. 

Your bank accounts will seriously thank you later.

Closing Thoughts


Once you’ve decided that college is the right place for you, it’s time to start the financial planning process. 

One of my top tips for a financially successful time at college is:

  • Budgeting

You guessed it. 

Budgeting is so valuable and can help you take control over the money you earn – and spend – while living the typical, frugal life of a college kid.

Of course, college is supposed to be a blast! 

You’ll likely make life long friends (I’ve made 2 best friends in my college roommates!) and share memories that will last you decades.

“Just make sure you make the right financial decisions – because the wrong decisions can last decades too.”

Be smart with your money.

And remember, the younger you are, the more time you have on your side – which means the earlier you start taking control of your financial future, the higher the likelihood that you’ll achieve your financial goals

Your bank accounts will thank me later!

What crazy savings techniques did you practice during your time at college?

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Fiona Smith
Fiona Smith
The Millennial Money Woman was founded by Fiona Smith. She holds her Master of Science Degree in Personal Financial Planning and has co-founded a local non-profit community teaching financial literacy to young professionals.

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