Paying for college can feel like an exhausting hassle. For many students, it’s more than just numbers on a page. It’s the late-night worry, the feeling of being behind before things even begin. But it doesn’t have to feel that way. With just a little planning and a few simple money tips, you can take control before the stress takes over.
As we all prepare for college, money might be the biggest thing on our minds, or something we avoid thinking about at all. Either way, learning how to manage your finances now can be the difference between starting strong or struggling late. Whether it’s saving for tuition, budgeting for daily expenses, or picking the right bank account, I’ve got you covered.
This guide will walk you through easy, realistic ways to take control of your money.
When’s the Right Time to Start Saving?
Being off to a good start means learning how to save smartly for college, but when should you actually begin?
The best time to start saving is before you enter college, and if you haven’t already, then the moment you realize you need to take control of your finances is the moment to begin. According to Citizens Bank, “529 college savings plans are the most common way to save for your college education because there are tax advantages to the account, plus the potential to earn a return on your investment” (Citizens Bank n.d.). These plans are flexible too: “529s don’t have annual contribution limits or household income restriction to open an account,” and “you’re eligible to apply for any state’s 529 plan, regardless of where you live” (Citizens Bank, n.d.). That means whether you’re a parent saving early or a high school student planning ahead, this option is accessible and effective.
On top of this, getting a job in high school or at least by your freshman year is a game-changer. Even if the income is small, the habits you build will help you stay ahead instead of catching up later.
It’s Never Too Late to Start Budgeting
If you didn’t start saving before college, don’t stress. It’s never too late to take control of your money. You can absolutely start budgeting while you’re already in school. According to Fay, “If you continually review and modify your plan, every week at first and then every Monet, you can find ways to re-allocate spending so that everything balances out over time.” Budgeting isn’t just about doing the math once, it’s about consistency and discipline.
One of the first steps is tracking your finances. Fay puts it simply: “Write everything down, and take your budget seriously. This is one test that you can’t afford to fail.” And the real struggle? “The challenge for college students is not making a budget; it’s sticking to it.”
One strategy that can help is the 50/20/30 rule. As Mr. Castleberg explains, “50% basically meaning all your expenses that you’re living on…30% is going to be towards entertainment or fun items… and then 20% is for savings.” It’s a simple breakdown that helps you enjoy college life while still keeping your money in check.
Choosing the Right Savings Account: What Works Best for You?
When saving for college, picking the right account is able to make a big difference. As someone currently budgeting for college, I’ve found that understanding the pros and cons of each account type helps in making sensible decisions.
Certificates of Deposit (CDs): These often offer the best interest rates. Mr. Castleberg explains, “The CD is actually probably the best for interest… the only downside with the CD is they make you sign up for a period of time and you can’t access your money in the meantime.” So, if you have funds that you won’t need to touch for a while, a CD could be a great option. For example, if you’ve saved up for next semester’s tuition and won’t need that money until then, locking it in a CD could earn you more interest.
Traditional Savings Accounts: These offer more flexibility, even if they earn less. “The return on any contributions to a savings account is minimal, but the funds can be used for any purpose without penalty,” says Mr. Castleberg. This is ideal for emergency funds or short-term savings goals. Personally, I keep a portion of my savings here for unexpected expenses, like textbook costs or medical emergencies.
Money Market Accounts: These provide a middle ground, offering a higher return than a savings account and easier access to funds than a CD. Mr. Castleberg notes, “A money market can be really good, because it gives you a higher rate of return, but it’s still liquid… but the rate usually;;y isn’t quite as good as CDs.” If you’re saving for something like a spring break trip or a new laptop, and you might need to access the funds sooner, a money market account could be suitable.
In summary, the best account choice depends on your financial goals and your immediate need of access to your money. By understanding the features of each account type, you can make choices that align with your college budgeting needs.
