12 Must-Know Rules for Managing Credit & Money in College

College mixes challenging classes, deep 3 a.m. talks with friends, and your first taste of adult life into an experience unlike any other. You discover who you are and where you want your life to take you. You’ll make some mistakes, too. Some make funny stories later (remember the night you tried to invent “wine pong” and ruined the common room carpet?). Others could mess up your life for years, like racking up thousands of dollars in credit card debt. Take charge of your college finances by acing this crash course.

1. Build credit one card at a time

Signing up for too many cards is a beginner mistake that can turn into financial disaster. Your credit score drops if you open lines of credit too fast (you look desperate for funds, which isn’t a good sign). With all those new cards in your wallet, you’re also tempted to overspend and dig yourself into debt. Take things slow by opening one card at a time, with plenty of time in between each new account. Here are Credit Sesame’s recommendations for the best credit cards for college students with no credit history. 

2. Track your spending

By the 30th of the month, do you remember how much you spent on the 3rd? Neither do I. Use an app to note what you buy and catch money mistakes. Mint and You Need a Budget are good ones.

3. Put needs in the budget first

Credit Sesame found that 58% of parents said they’d discussed their child’s college contribution, so chances are, some of your money is going toward tuition or other college costs. That contribution, your phone, insurance, and food are the backbone of your budget. With that stable foundation in place, you’ll be in good shape to go out with friends, guilt-free. Your necessary expenses are the core of your life. Your ability to budget for them may affect whether you stay in college at all.

4. Treat savings like a bill

If you want to build your savings, you can’t rely on whatever’s left over in your budget. Spare cash has a way of disappearing. Decide on a realistic amount to save every month and make it a non-negotiable part of your budget. Treat it like a bill: you wouldn’t miss a cell phone or health insurance payment, so don’t skip saving, either.

5. Give yourself a ‘fun spending’ allowance

Budgeting doesn’t mean saying no to every night out. Once you’ve accounted for your needs and savings goals, earmark some money to blow on whatever makes your heart happy. It’s easier to save for the future when you also get to have fun in the here and now.

6. Don’t lend your card to friends

Just because you trust your bestie to take notes for you when you miss class doesn’t mean you should trust her with your credit score. Letting friends borrow your credit card is a big mistake. If “I’ll pay you back next week” turns into “By the end of the semester… maybe,” you’ll hurt your finances and your friendship. Just see what happened to these two besties who had a falling out over $125.

7. Keep credit utilization low

Experts recommend that you keep your credit balance at 30% or less of your limit. Credit Sesame members in all generations struggle with this, but younger generations were the worst. Millennials utilize a whopping 57.7% of their credit lines. Before you swipe, ask yourself if you really need to put this purchase on your card.

8. Use cash

One of the simplest ways to control your credit card utilization is to use cash. You may also resist some unnecessary spending. Studies show people think more about a purchase when they pay with cash because the money feels more “real.” Walking to an ATM to withdraw cash also gives you time to rethink an impulse buy.

9. Buy secondhand

Books, clothes, dorm decorations, and supplies like pots and pans add up. Fortunately, you can find lots of gently-used necessities for cheap. Scout out deals on Craigslist or Amazon, or shop in person at your town’s consignment shops.

10. Don’t shop online in the computer lab

During the finals crunch, it can feel like you spend more time in the computer lab than your dorm. Don’t treat your “second home” like the real thing when it comes to online shopping. For one thing, entering credit card info on a shared computer is a potential security risk. Also, shopping during an all-nighter is a recipe for impulse buys you’ll regret later.

11. Automate payments

Between academic due dates and campus events, you’ve got enough to remember. Set up auto-pay for your credit card bill. You can arrange for the money to transfer from your checking account on the same day each month. All you need to do is keep enough cash in the bank.

12. Make student loans a budget category, even if you’re not paying them yet

Student loan debt is no joke. The amount of debt the average grad owes has been climbing for years to $35,000. Making your loans part of your monthly expenses before you have to pay them back for real helps you catch overspending mistakes before they cost you.

It’s okay if you don’t know how much your payments will be. Pick an amount to set aside each month. You’ll develop a smart habit and save a nest egg for when you graduate.

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