top of page

Top 10 Financial Hacks for College Students

Updated: Feb 18, 2022

Reduce your anxiety by having a financial plan

Do you struggle with budgeting? Did you try several methods but were unable to follow through? Yes, budgeting is tough. Who wants to limit themselves to their favorite coffee only once a week? You may have loans and can’t afford to do many things you would like to do. You may think you have little time to consider budgeting. The secret to financial success at college is to develop a “financial mindset” (if you did not create one yet).

What is a financial mindset?

Simply put, it is the mindset that will allow you to achieve your financial goals. We all have certain opinions about money. For example, college students commonly believe that retirement is far away, so there is no need to worry about it. Another opinion is that expensive clothes and shoes make you look richer. Yet another is that you have to be a doctor or lawyer to become a millionaire.

A survey of more than 10,000 millionaires found that most believed that they could become millionaires. The top five careers of these millionaires were engineers, accountants, teachers, management personnel, and attorneys, and 79% of these millionaires did not get any inheritance. Therefore, you don’t have to be a medical doctor to be a millionaire. Another remarkable finding of this study was that 62% of the millionaires went to public universities or state schools. Hence, most millionaires graduated from state and public schools.

You may be thinking; if most millionaires did not come from wealthier families, they must have had large salaries. If we look at what was found for the millionaires surveyed:

  • % of millionaires came from families with a middle income or less: about 80%.

  • The average amount of time working and investing in getting to $1 million: 28 years.

  • One-third of millionaires never made $100,000 in any single working year of their career.

What was common to all the millionaires: They invested their money to make more money.

The results of many surveys and studies show that investing is for everyone, including you. An excellent financial mindset will allow you, independent of how much money you have or earn, to make intelligent choices about your money so that you would have financial security over time.

So, essential aspects of the financial mindset:

  • You need to commit to financial security

  • You must realize money is a tool, not a goal

  • You need to stop comparing yourself to others and wanting what others have

  • You need to be grateful for what you have and show gratitude

  • You need to think long term

  • Your money should be actively managed

  • You must believe that you can become a millionaire (because you can)

These Top 10 Financial Hacks will help you develop a financial mindset and financial security

#1. Be Realistic
#2. Read a Personal Finance Book
#3. Create a Budget
#4. Calculate Your Net Worth
#5. Save for Emergency
#6. Distinguish Needs from Wants
#7. Start Investing Early
#8. Don’t use Credit Cards Unless They Give You a Financial Advantage
#9. Do Free Social Activities
#10. Find Local Discounts Available for Students

#1. Be Realistic

You want to become a millionaire, so you play the lottery every week. The chance of you winning a major lottery is very low. The possibility of winning the Powerball jackpot is 1 in over 290 million. As such, trying to become rich by winning the lottery is unrealistic. About 75% of millionaires surveyed said that regular, constant investing over a long period was the main reason for their success. Be prepared to save consistently every month, and as you earn more, you save more.

#2. Read a Personal Finance Book

Investing in yourself is the best investment you can ever make. Reading a top-rated personal financial book will help you learn financial strategies and develop your financial mindset. Every year, try to read a different financial book. In a few years, you may even be writing your own finance books.

#3. Create a Budget

Yes, it is boring to create a budget. However, a budget is important for college students. Just knowing where your money is being spent and how you would pay for books, clothes, and other future expenses reduces your stress. Knowing where you spend money allows you to make better decisions on lowering your expenses. If you need help budgeting, some free apps

such as Mint, Tiller Money, and Personal Capital are great to get you to stay focused on your financial goals.

#4. Calculate Your Net Worth

Yes, your net worth may be zero or negative (meaning you owe more money than you have saved). That is okay.

Net worth is the difference between your assets (cash, savings, car, anything you own that have value) and liabilities (student loans, credit card balances, car loans, any money you owe). As you start working and earning money, it is a powerful experience to witness your net worth increase. When you see your net worth increasing, you want it to grow even more, so you make conscious decisions to not spend money on things you don’t need.

#5. Save for Emergency

Unexpected expenses can happen. Most students don’t have any emergency funds, which continues for many years after they graduate and start working.

Start with what you can afford. $5 a month is better than $0.00 a month.

Your favorite shoes got a rip in them, and you don’t like your other shoes as much, so it is time to use your emergency savings. Emergency savings are for emergencies – such as you lost your on-campus or off-campus job and your parents can’t afford to give you money to help you with food or lodging. Start and use a separate free savings account that’s free and different from your regular savings account.

#6. Distinguish Your Needs from Wants

If you limit most of your spending to items you need instead of what you want, you would have fewer items in your apartment and home and have more flexibility with your money. Having fewer items in your home is often associated with increased happiness, so saving money this way may also increase your happiness.

#7. Start Investing Early

Compound interest may be one of the best gifts anyone can get. In 40 years, one dollar can be worth 20 dollars due to compound interest.

S&P 500 returns over the last 20 years

If you invested $1 a day for five years and invested in the S&P 500 on January 1st, 2002, in December 2006 (approx. 7.5% annual interest over that period), you will have about $2,100 (of which you contributed $1,800.00). Net increase: $300.

Investing $1 a day for ten years and invested in the S&P 500 on January 1st, 2002, in December 2011 (approx. 5.0% annual interest over that period), you will have about $4,500 (of which you contributed $3,600.00). Net increase: $900.

Investing $1 a day for 20 years and invested in the S&P 500 on January 1st, 2002, in December 2021 (approx. 10% annual interest over that period), you will have about $20,600 (of which you contributed $7,200.00). Net increase: $13,400.

You may think that the interest over the last ten years was better than average. If we take the interest over the 20 years at 5% annual interest, you would still have about $11,900 (of which you contributed $7,200.00). Net increase: $4,700.

Let’s take a closer look. Assuming the annual interest rate was 5% each year, the first ten years earned $900, while the second ten years earned $3,800, more than four times what the first ten years made, even though the contribution was the same in the first ten years and the second 10 years.

Remember, the average time millionaires surveyed said they were working and investing to get to $1 million was 28 years.

Essential rules in investing:

  • Investing money early matters. The longer you invest, the more likely you will accumulate financial wealth.

  • Invest consistently. Try to automate your investments.

  • Invest in appreciating assets, like real estate and quality stocks.

  • Don’t try to time the stock market.

  • Think long-term.

  • Start investing as soon as you can, even with $5.

You are likely to make mistakes when you start, so invest only small amounts initially, but do so consistently. The goal is to learn and develop a financial mindset of consistent investing. As you get better-paying jobs and have more money to invest, you will need to invest wisely. Many apps are available that allow you to invest. Apps that are good for investing small amounts of money include Fundrise (real estate investing with an account minimum of $10), Robinhood, or Webull.

Robinhood has no minimum account balances or special status requirements. You typically get a free stock for joining ($3-10 is the most typical value of the free stock). If you know someone that has an account, use their referral code. This allows the person with the account to get a free stock or 2. Once you have your account and get comfortable using it, you can use your referral code to help your family members or friends start investing. With Robinhood, you can easily set up a monthly investment in your favorite stocks because you can buy fractions of many stocks like Apple (AAPL). However, I suggest you invest your hard-earned money in either or both of these two stocks:

VOO - Vanguard 500 Index Fund ETF

VOO is an exchange-traded fund (ETF) from Vanguard that tracks the Standard & Poor's 500 (S&P 500). While VOO is not as exciting to purchase as individual stocks, it has the following advantages:

  • It has significant diversification as it includes around 500 companies.

  • It has an incredibly low expense ratio of 0.03% for an ETF.

  • VOO has a historical average annualized return of about 9.4% over the past 50 years

VTI - Vanguard Total Stock Market Index Fund ETF

Even better diversification than VOO as it includes nearly 100% of the U.S. investable equity market (over 3900 stocks).

  • The low expense ratio of 0.03%

  • VTI average annual returns are about 9 % since inception (05/24/2001).

Pro-tip: Stock markets go up and down, so if you invest in VOO or VTI and it goes down, that is part of the natural cycle of the stock market. Although past performance is no indication of future performance, long-term investing (>10 years) in VOO or VTI has proven to be a very successful strategy for many investors.

Webull is another popular app that is easy to use for investing in stocks. Just signing up for Webull gets you a free stock. Once you deposit money into the account, you get 1-2 more free stocks (($3-10 is the most typical value of the free stock). Please be aware that these promotions can often change to increase or decrease the number of free stocks. Like with Robinhood, ask around and if you know someone (friend or family) that has a Webull account, use their referral code.

If you don't have a referral code and would like to support low-income college students you can use these links: Robinhood Link and Webull Link.

#8. Don’t use Credit Cards Unless They Give You a Financial Advantage

Have at least one credit card for emergencies but don’t use it if it does not add any financial advantage to your life. An example of an economic benefit is a 2% cashback card. However, if you typically spend more with a credit card than with cash, then even the 2% cashback will not be enough to justify your use of a credit card. Studies have shown that having a credit card encourages people to spend more on impulse purchases, including unhealthy food purchases (1,2). Many consumers overestimate their ability to repay credit card bills (3). To add to the problems of unwise use of credit cards and the inability to pay the monthly bill in full are the high-interest charges added to what you already owe.

In a 2021 study, the brain mechanisms involved in purchasing decisions using cash and credit cards were found to be different, with credit card purchases more strongly activating our reward network (4). So, don’t get accustomed to credit card use if you don’t have your financial mindset well developed.

#9. Do Free Social Activities

It is important to be healthy and be connected with others. However, many great activities cost money, but some fantastic activities are free. Hiking, sightseeing, cycling, and walking are all free. Photography is a great free activity if you already have a great digital camera. If you enjoy walking on the beach or swimming, go to the beach (by bus if you need to). I enjoy watching sunsets and sunrises, volunteering, and walking my neighbor’s dogs, all tremendous free social activities. Entertain yourself, meet new friends and enjoy life without “breaking your bank.”

#10. Find Local Discounts Available for Students

Find senior students to ask about the best deals for students. Purchase your groceries at the cheapest grocery store, buy your gas at the cheapest gas station close to your apartment or university, and make use of discounts for students that are usually available for movie theaters and museums.

Learn about other perks of being a college student:

  • Students with a valid student email address can receive six months of free Amazon Prime.

  • Students with good grades can get discounts on insurance with several companies such as Allstate, Nationwide and Geico; it is good to comparison shop.

  • Learn about the discounts available at your campus bookstore. Software and computers can sometimes be the cheapest from your campus bookstore.

Now it's time to take control of your finance, reduce your stress and anxiety levels, and enjoy life more.

Written by Aldrin V. Gomes, PhD, FCVS, FAHA


(1) Thomas M, Desai, KK, Seenivasan S. (2011) How credit card payments increase unhealthy food purchases: visceral regulation of vices. J. Consum. Res. 38, 126–139.

(3) Heidhues P, Koszegi B. (2010) Exploiting naivete about self-control in the credit market. Am. Econ. Rev. 100, 2279–2303.

(4) Sachin Banker S, Dunfield D, Huang A, Prelec D. (2021) Neural mechanisms of credit card spending. Scientific Reports. 11: 4070.

Recent Posts

See All


bottom of page