Sense & Centsibility Blog
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Three financial wellness tips for college students

Updated 7.28.23

It’s back-to-school time! For those who are starting college or technical school or are returning for your second, third or fourth year, this blog is for you (and maybe your parents, too).

Over the next nine months, you will have a lot more freedom than you might be used to, especially if this is your first year. You will have many choices to make about which classes to take; the crowd you’ll hang out with; and when, where and how you will socialize. You also might experience more financial freedom than you’ve ever had in your life. I’d like to share with you three financial wellness tips I wish I’d known (and used) when I was in college.

Create a Plan for Your Spending

Having a plan for how you will spend will help your money last much longer than without one. First, know what income you will have to work with. If your parents are going to contribute financially, talk with them about how much they will give you each month and what they expect it to be used for.

Parents, be firm with your expectations and the limits you put on your child’s spending. I don’t say this to be mean; instead, think of it as a way for them to learn about smart spending choices and problem solve how to make money last. These are skills that will be important throughout their lives.

Next, calculate any savings or financial aid (scholarships, grants or loans) you will have. Loans are distributed per semester, so you will want to make sure any leftover funds will last you until the next semester.

Finally, estimate what your expenses will be. How will you get around at college? Will you need to spend money to go home for holidays? How much will books cost? What will you spend each month on food or socializing? Add up all monthly expenses you can think of, then multiply that by the number of months you need your money to last. (For example, if you will need $500 a month for four months, that’s $2,000.) Do you have enough?

Decide Whether You Will Work During School

Many students don’t have a choice whether they will work or not; they must in order to cover all expenses. If you don’t have to cover all your costs, but you also realize you’re not going to have enough money to cover them until the next semester or through the end of the school year, then make decisions about spending less, or work to supplement your income. If you choose to get a job, decide how many hours you will have to work, and balance that with your need to study, complete assignments and socialize.

A 2020 article from the American Association of University Professors discusses the realities of working while in college and recognizes that many students need to work 20 hours or more per week to cover expenses; those students tend to come from lower-income families. Unfortunately, working more than 20 hours per week is associated with lower grades and retention rates. It can also slow the rate of credit accumulation, causing a student to take longer to graduate and costing more in the long run. That said, an article from McPherson College cites Bureau of Labor Statistics that suggest that students who work 15 to 20 hours per week while taking a full class load have stronger grades than those who don’t work at all or work more than 20 hours a week. If you need to work while in school, it looks like it’s best to keep the hours below 20 per week to keep your grades up and accumulate credits towards graduation in a timely manner.

Avoid Taking on Too Much Debt

Maybe you’re thinking that instead of working extra hours, you’ll pay for expenses that you can’t cover by using a credit card or taking out private student loans to have “extra money.” Pull over for a second, and think about this: the average credit card debt for college students is $3,280, according to Wallet Hub. Whether or not that seems like a high number to you, it’s important to know how to avoid any of the top five mistakes college students make when it comes to credit card debt (according to NerdWallet).

Those mistakes are:

  • Getting too many credit cards. You only need one.
  • Not tracking spending. There are many free apps you can use to track your spending, or you can just write down every time you charge something.
  • Forgetting about the bills. There are many ways to get around this; here are two: 1) pick a date before the due date to pay the bill. 2) set up auto-pay; you can choose to pay the entire balance or just the minimum payment to avoid a late fee.
  • Adopting an “I’ll pay for it later” attitude. Only charge what you can pay off in one month. Interest accumulates very quickly, especially when the average credit card rate is, as of July, 2023, 23.99% APR.
  • Avoiding credit cards altogether. If you have a credit card and you keep your balance low enough to pay it off every month, make payments on time, and never use more than 30% of your credit limit, you will avoid unmanageable debt and build a positive credit score.

At the beginning of this post, I mentioned that I wanted to help you avoid the money mistakes I made in college. I didn’t plan my spending. I worked too many hours, and I took on credit card debt. The hours I worked led to poor grades, and eventually I had to drop out of school to work more so I could pay off my credit cards. I didn’t have a degree, but I still had to pay my student loans on top of the credit card debts. I eventually returned to school and finished. Had I known what I know now, it might not have taken me so long to do it. Hopefully, this blog will spare you some of the financial pain I experienced.

If you want to put together a spending plan, explore your student loan debt repayment options, build your credit or manage your credit card debt, an LSS Financial Counselor can work with you to reach your goals. Call 888.577.2227 or get your support online.

Shannon Doyle


Author Shannon Doyle is Program Director for Partnerships and Financial Education and for LSS Financial Counseling.