Young female college freshman with no clue how to manage money

How to Manage Money: Crash Course for College Freshmen and Others, Too

All around the country, newly-minted high school graduates are heading off to college. They’ll be taking a lot of things with them, but statistics tell us that financial literacy is one of them. If I could spend a little time with these awesome students, I’d attempt to cram the basics for how to manage money into their heads, then pray that it penetrates their hearts.


A diverse group of college freshmen who need to learn how to manage money

A budget is your friend

That means …

  1. You have a written plan for how you are going to spend and manage your money.
  2. You use that written plan like you would a road map, consulting it often and
  3. You use a site like or a pencil and paper to record how you spend every nickel.

Do those three things and you will be 90% on your way to becoming a rockstar for how to manage money.

Check out this monthly budget worksheet you can print out to help you estimate your costs and keep expenses under control. Do not attempt to do this “keeping track” thing in your head. You are amazing, but don’t push it.

Live with cash

Your generation has been somewhat brainwashed to believe that plastic is the only safe way to pay for things. That may be true if you buy things online, but overall it is just not true. Even then, there is a really cool way that you can shop on Amazon with cash.

I don’t have the time or space to get into a long dissertation on the subject, just believe me when I tell you that using cash—currency, greenbacks, dollars, coins—will simplify your life and it will keep you from overspending.

I understand that cash seems archaic, old-fashioned and what old people do. And I wouldn’t be surprised if somewhere along the line you’ve picked up the notion that carrying cash is not safe. Really? But carrying a debit-card is? Think that through.

Get a free checking account

It’s not easy these days to find free checking accounts with no strings attached—no monthly fee, no minimum balance requirement, and no minimum deposit. But many banks such as US Bank, do offer free student accounts that fit this criterion.

Explore banking options in the city where you will be attending school. Or find out if your parents’ bank or credit union offers free student accounts and has a branch near campus.

Credit card debt

Don’t be ridiculous. Credit card debt—a balance owing that you roll over from one month to the next, paying only the minimum required plus outrageous amounts of interest—has the potential to sink your ship. Think of it like cancer. At first, it’s just a tiny thing that’s not that big of a deal. But then it starts to multiply and if not dealt with swiftly, it will do horrible things in your life.

Never use a credit card to pay for things because you don’t have enough money. If you don’t have the money this month, what makes you think you’ll have it next month? Any amount of credit card debt will put you on the fast track to financial trouble.

When you do use a credit card, make sure you pay the statement balance in full—right down to $0.00 every single month. Without fail.

You do not need a single iota of credit card debt to build a great credit score so please do not use “building credit” as an excuse to burden yourself down with credit-card debt.

[RELATED: How to Help Someone You Love Build Credit and Boost Credit Score]

Credit limit

It’s super easy to think of the credit limit on your credit card statement as your money—like it’s there and it’s yours to spend.

It’s not your money! It’s the bank’s money that they cannot wait to lend to you at ridiculously high-interest rates. But it’s more than that.

The goal of every credit card issuer (the bank that so graciously agreed that you need a credit card)  is to get your credit card balance up to just a few dollars more than you can repay in full, in a single month. Then you’ll revert to the small minimum payment, rolling debt over to the next month. You’ll be hooked so fast it’ll make your head spin! You do not want to get caught up in that loser’s game.

Eat your food plan

If you or your parents have paid for the school’s meal plan, you need to know how many meals are covered then do something remarkable: Actually eat those meals.

If you’re eating pizza in your dorm room or driving through In n’ Out (name your jam) instead, you’re just throwing away money. It might feel cool to spend your money like that now, but you will regret it later.

Don’t be a Starbucks regular

I want to say “never,” but I’ll compromise a bit on this one. Seriously, the coffee at Starbucks or Coffee Bean or any other trendy coffee house is so expensive it brings tears to my eyes.

Let your grandparents and others know how much you love Starbucks gift cards. They are anxious to know what they can send to you while you’re away. Then use the gift cards instead of your cash.

Think about it: If you spend $3 a day at Starbucks, that’s $90 a month. On coffee. Multiply by 9 to see how much you’ll buy in a school year ($810). You don’t want to spend your money that way. Buy an inexpensive coffee maker instead and make it yourself in your room.

[RELATED: 23 Best College Dorm Room Essentials of 2020]

Buy or rent used textbooks

The cost of new textbooks is going to be so shocking, it will make you want to chew your hair. You can cut that cost in half at least by buying used books online or even renting them. Take good care of them so that when you’re done you don’t get charged a damage fee on rentals. Or if you purchased them, you can sell them back.

Keep searching

Students who couldn’t secure a scholarship for the fall semester shouldn’t give up hope. Many scholarships have spring deadlines, so continue your search during this school year and next year, too. Just keep applying.

Take these basic money principles and apply them to your life starting now. Take money management seriously. Get really good at how to manage money. You will never regret it.

And have a great year!

Updated 8-11-20


What Is a Student Bank Account?

A student bank account is a checking or savings account that a bank, credit union, or other financial institution offers to students, with no (or reduced) fees. A student account has features that are designed to meet students' financial habits and needs. When applying for a student bank account, you will need to show that indeed you are enrolled in a school, college, or university. Typically a student ID card or email address ending in .edu will be sufficient.

What Should You Look for In a Student Checking Account?

Look for a student checking account that includes hopefully all of the following: ・A low or no monthly account maintenance fee ・A low or no minimum balance requirement ・A higher rate paid on deposits ・Branches located on or near your campus ・Branches located near where you plan to live or work while you're in school ・Easy-to-use online banking ・A full-featured mobile banking app ・A free first box of paper checks You don't necessarily need to limit your options to banks and credit unions that have ATMs on or near your campus. That's because many banks and credit unions are part of ATM networks or will reimburse some or all of the fees that you might be charged to use other banks' ATMs.

How Do You Open a Student Bank Account?

You can open a student bank account in person at a branch, over the phone or online. To open an account, you'll need to provide your name, birthdate, address and an identification number, which could be your Social Security number, Individual Taxpayer Identification Number, passport number, and country of issuance, alien identification card number or another government-issued identification number. The bank uses this information to verify who you are and where you live.

Should You Choose a Bank Affiliated With Your College?

You should never be required to use a specific bank just because it's affiliated with your school. Shop around. Learn your options, then make your decision.

Should Students Choose a Bank or Credit Union?

A bank is a for-profit financial company that offers deposit accounts, credit cards, auto loans, home mortgages, and other financial products and services. A credit union is a nonprofit cooperative that's owned by its members and offers many of the same types of accounts and loans as banks. Credit unions typically have membership criteria. Credit unions are known for personal service and high customer satisfaction. That might be an important benefit for students who are new to banking.


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1 reply
  1. Maria says:

    Two points – 1, my husband and I use cash back credit cards, pay our balance in full every month, and last year we made $1800 from cash back, we use whichever card will give us 5% during a certain period. While I understand that this article is geared towards students, credit cards are not as bad as you may think. 2, with so many out of work right now with no help from the federal government, the only choice is to charge living expenses on credit cards right now.


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