You’ve just finished high school, your parents are beaming with pride as you’ve selected a prestigious university that churns out successful professionals. You can’t wait to begin your adult life and strike out on your own. Not to mention meet new friends and live the college life you’ve been fantasizing about over the past year.

Yet there’s a hidden presence that on one seems to have mentioned. It lurks about in the hallways of buildings and sneaks around the campus hanging over the heads of many of the student body. That unseen, yet detrimental, disease is student debt.

As you pack up and head to college, no one mentions this unpleasant side effect of college education. Even students who obtain scholarships and grants that cover their education costs, often end up saddled with heavy credit card debt. The reasons behind this deplorable side effect is a lack of personal finance education. Unfortunately, few courses in money management and budgeting exist. Yet there are a few tips to help manage your money and reduce your debt.

Increase your income

Though going to school full-time may leave little room for working, there are still a few ways to make money even with a hectic class schedule:

  • Work summer and winter break. Jobs in the retail and restaurant industry are often open to seasonal employment.
  • Pet or house sit. Something that is usually needed on the weekends or holidays, this is a great way to make a little extra cash.
  • Take on a part-time job. The first place to look is at your university. If those jobs are being filled through a work-study grant, then begin looking around the university for positions that are flexible, such as restaurant or delivery positions. Tutoring is also a great way to make extra money and you can set your own hours.
  • Apply for student grants and scholarships. Many departments offer semester grants and very few people actually apply for them. This means you have a better chance at being the recipient.

Budget your money

Whether you plan on living off your loans, grants, scholarships, parent’s income, or your own income, budgeting your money is your key to financial success.

  • Determine your basic monthly needs. Usually this boils down to rent, utilities, food, and gas. Using a pencil and paper or a spreadsheet, figure out your monthly living expenses.
  • Calculate how much money you will bring in each month. If you’re living off loans/grants/scholarships/parent income, you might need to divide the lump sum by the total number of months you are in school. This will give you a monthly total allowing you to divide up your basic necessities from any extra money you can put aside.
  • Set aside some money for a rainy day and a little bit for fun. If you find you have a few 20’s left over after paying your necessary bills, put half away for a rainy day (you never know when you might need a new tire or a copay to the ER!) and the other half away for your spending money.
  • Be sure to leave room in your budget for books and school supplies. Make sure you budget in the cost of books and school supplies. These items seem to sneak up on you, making it easy to justify swiping that credit card.
  • Keep your student loans to a minimum. Take out only what you really need. If you devise a budget, that will help you figure out how much you really need.
  • Don’t be a credit card using fool. A credit card is a great way to build good payment history which builds a strong credit score. However, you should only use credit cards when you know you can pay them back in a reasonable amount of time. Credit cards shouldn’t be looked upon as an emergency fund!

Managing your student loans

If you’re one of the lucky graduates who leaves college debt-free, consider yourself a stupendous anomaly. Many students have acquired some kind of debt by the time they graduate and they now need a definite plan to pay it off.

  • Make payments towards your student loan interest while still in school. The monthly interest on student loans is usually minimal to begin with (unless you’ve taken out tens of thousands of dollars!) Paying off the interest while you’re still in school means that interest isn’t accruing making the total balance less.
  • Use the deferment period to pay down more of the loan balance. Though your loans may be in deferment up to 6-months after you graduate, you can still make payments towards them reducing the total balance quicker.
  • Revise your monthly budget and make Student Loan Payment a category. Pay more than just the minimum payment on your student loans.
  • If you are having trouble paying your loans, don’t avoid them! Call your loan servicing company and set up a payment arrangement. They are usually more than willing to help you select the best program for successful repayment.

As a new college student, taking control of your finances means you’re on the path to wealth. Starting out with a little personal finance knowledge can mean the benefit of reaping the maximum reward; being debt-free!


  1. Financial Samurai Reply

    Debt… it’s kinda ugly with how expensive tuition is.

    Hopefully with the Yakezie Scholarship vertical, we can thing of ways to fight back!
    .-= Financial Samurai´s last blog ..Spending Too Much Money And Course Correcting =-.

    • @Financial Samurai – I think that’s something I’d like to expand on more; colleges and universities that don’t cost an arm and a leg! Perhaps that can be one scholarship vertical.

  2. Financial Samurai Reply

    Cool. Can you elaborate? You mean posts about saving money on college education and such?
    .-= Financial Samurai´s last blog ..Spending Too Much Money And Course Correcting =-.

    • @Financial Samurai – I was thinking along the lines of State Colleges vs. the big ten or Ivy League. There are just some degrees that don’t require the notoriety of big name universities.

  3. My big non-mortgage debt is a student loan. Of course, I’ve dragged it on way longer because it was low interest. My goal is to have this paid off in 16 months. It’s an albatross around my neck.
    .-= Kay Lynn @ Bucksome Boomer´s last blog ..Poverty and Life Skills =-.

    • @Kay Lynn – I hear that. Once I tackle my crummy line of credit, it’s then time to take on those student loans. Luckily, they aren’t too hefty. Whew!

  4. This article is a true blast from the past. One thing you forgot to mention was to to share expenses by living with a gang of people.

    In college, dog sat, tutored, house sat, cleaned houses, banquet waitressed, worked at a cafe, worked retail..usually 2 or 3 of those at a time. I also bartered my skills for other’s skills. I cleaned a friends insanely dirty house in exchange for electrical work.

    I also spent a ton of time applying for aid every year and it was well worth it. This is a great article, thanks.

    • @Sandy L -Thanks for including your tips, they’re great! I did forget to mention roomies. I had a few in college and it allowed me to live on the cheap. Thanks for sharing!

  5. @Nick – Thanks for these tips. I think it’s very helpful for college students to know they can begin paying on their student loans before they are actually due. Even if they can only tackle the interest payments, that helps! Thanks again for sharing this info.

  6. Khaleef @ KNS Financial Reply

    Our biggest debt by far is student loan debt! I think that college education should be treated like most other purchases. The student and parents need to evaluate whether it is the best option at that time.

    I love the idea of looking at state colleges – I went to one of the best schools in the nation and it is a state college! Even going to a 2-year college to pay less for the core courses and then transferring into a 4-year school can save a lot of money!

    • @Khaleef – Going to a 2-year junior college is a great way to save some money. I did the same thing many, many years ago and the total cost for my bachelor’s degree was very low, even for that time! You’re also right in thinking about whether traditional college education is the best for each person. Some people would be better off studying a trade instead.

  7. One thing that really helped me out is joining a cooperative education program. I was able to gain real work experience while making some money at the same time. This, along with working part-time while taking classes ( I don’t understand how I did that today and survived…) in combination with lower tuition (school probably cost me $20,000 total in tuition and books, though I probably spent much more than that in living expenses) helped me get through it.
    .-= Kevin@InvestItWisely´s last blog ..Is It Worth It to Have an Emergency Fund- or Should I Pay off My Mortgage Instead =-.

    • @Kevin – I’ve never heard of a cooperative education program, but it sounds like a great way to help pay for college and build work experience. Was this someplace other than the US? I’d be interested in knowing more about it. Thanks for sharing!

  8. Good to revisit this post coming from

    Keeping these debts to a minimum is so important!

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