5 Financial Tips for College Students

1. Start a Budget

One of the best ways to get off on the right foot is to create a basic budget. A budget helps ensure you can cover all of your expenses and live within your means; in other words, you don't have to borrow money to pay routine bills.

When you make your first budget, you'll add up all of your monthly income, which might include financial aid, allowance from your parents (via them or your college savings account) and any money you make from work.

Then, add up all of your monthly expenses to see how much money you're working with each month. If it turns out you have more money going out than coming in, you'll likely find yourself going into debt to stay afloat. Instead, find ways to either cut expenses or increase income until you're able to live within your means.

Budgeting is a useful tool, even if you have low income or irregular income, since it provides some structure and accountability for spending. You can even allocate money each month for travel and entertainment; you're just ensuring you don't overspend and wind up in debt. You can budget using an app, a spreadsheet, the envelope method or whatever works for you.

2. Open a Savings Account

Attending college is expensive, and it's not uncommon to be scraping by on instant noodles to afford overpriced textbooks. But if at all possible, this is the ideal time to open a savings account and start setting aside money when you can—even if it's just a few dollars here and there.

Savings accounts can be used to save for goals, such as taking a vacation or buying a car. They can also be used to build an emergency fund. Your emergency savings isn't for spending; its purpose is to come to the rescue when you encounter an unexpected expense, such as a broken phone or wrecked car. It also comes in handy if you lose a job or another source of funding. By having this savings buffer for emergencies, you can pay for some or all of an emergency expense in cash and avoid taking on costly debt.

3. Build Your Credit

While you don't have to think about it in high school, college is the time to start building your own credit now that you'll have accounts in your own name. This will come in handy quickly, as your credit will be checked when you apply for apartment rentals, when you try to open new utility or phone accounts and when you apply for loans or credit cards.

If your credit is new and limited, you might face steep fees and interest rates or, worse, application rejection. When you're new to credit, it's ironically difficult to qualify for the credit needed to build it! One way to get started is to open a student credit card or ask your parents to add you as an authorized user on their credit card account (assuming they manage it responsibly).

If you get your own credit card, just remember that if you don't pay off your balance every month, you'll pay interest on the balance amount. Using this card responsibly will help build your credit positively. This means actions like keeping your balance low, only spending what you can afford and paying all bills on time. If you eventually start opening utility bills or cellphone accounts in your own name, you have additional opportunities to build credit.

If you don't have any of these accounts yet but want to start building credit now, you can use Experian Go™ to establish a credit report and start your credit-building journey.

4. Automate Bill Payments

If you're used to your parents taking care of your bills, it can be a rude awakening to suddenly be responsible for paying for things like phone bills, utility bills or car payments. If you forget and make a late payment, you may owe a late fee, and your credit score will be dinged.

Ongoing failure to pay could result in account closure and, worse, the creditor sending it to debt collectors. Having collectors pursue the payment from you is not just stressful and disruptive, but it can cause long-term damage to your credit.

The solution? Use autopay whenever it's offered. Most recurring bills offer this option, which allows you to put a card on file that's automatically charged on the same date each month. You don't have to lift a finger, and your bill will never be paid late. Just make sure that you'll have enough money in your account each month so the payment doesn't fail.

Know that some companies allow you to select what date autopay charges your account, so move it if needed. For example, students who receive financial aid or work paychecks at the beginning of the month may find it less stressful to have autopay run around the same time, rather than at the end of the month when checking account balances are low.

5. Get a Side Hustle

If you're finding that you don't have enough money from your family or financial aid to make ends meet, or to do some of the activities you love, getting a job could be the answer. It's common for students to wait tables or bartend in their spare time, for example.

Students who are overloaded with coursework or extracurriculars might find it difficult to get a consistent part-time job like that, but there are also plenty of flexible side hustles to try. Here are some ideas:

• Babysit for local families
• Pet-sit or dog walk for friends or neighbors; if you don't know anyone, use an app like Rover or Wag to find clients
• Offer tutoring to other students in a subject you excel in
• Deliver food or groceries using gig economy apps like GrubHub, Instacart or DoorDash
• Give rides on Lyft or Uber
• Join TaskRabbit to help locals with odd jobs

The Bottom Line

Financial literacy isn't taught uniformly in America, so many college students arrive on campus without a clue as to how to make their money last through the month or start building a positive credit history. By taking the time to learn the ropes as soon as possible, you'll set your future self up for success.

Leaving college with minimal debt, a growing credit history and budgeting know-how will make graduating and entering the working world a much easier transition. If you want to watch your progress over time, sign up for free credit monitoring from Experian. You'll be able to see how your decisions impact your credit score and maybe even gain motivation to keep up the good work.