How to Build Better Money Habits in College

As a student, your personal finance habits are crucial. The money moves you make in college can have a lasting impact on your future financial health. Not paying your bills on time, neglecting your emergency fund contributions, and taking out more high-interest-rate student loans than you need are just a few examples of bad money habits. Read the tips from these seven college students who changed their bad money habits for the better. 

1. Plan out your rewards

When you do something you’re proud of, like ace an exam or rock your band performance, it’s appropriate to allow yourself a reward. However, it can be easy to get carried away with treating yourself too much. Creating a game plan for rewarding yourself that fits your budget could help. Sanwal, a student from CSU Northridge, shares how he found a balance with his celebratory spending:

"I had to teach myself that the second exam in one class out of five on a random Tuesday did not necessarily warrant a $30 sushi lunch. I realized that it is easy to be frugal during the routine days when you have a strict schedule you are following. The true test comes whenever you step out of that time and space, such as when your friends invite you to go out somewhere. Since I tend to celebrate with friends after a checkpoint such as midterms, I have started to plan out exactly what the expenses will be for that day, including gas, parking, food, etc. When emotions are high, logic is low, so this preemptive planning has allowed me to be wiser with my money."

Sanwal D. California State University, Northridge

2. Focus on experiences over things

In college, you may be influenced to regularly buy the latest clothing trends, beauty products, or tech gadgets. These items may sit in the corner of your dorm room gathering dust or go out of style before you get the chance to use them. Instead of cluttering up your space with stuff, consider spending a portion of your college budget on experiences. Things like music lessons, travel, or concerts can help you learn, grow, and create memories that you’ll treasure much more than new sneakers. Student Ijaz shares how ditching material things has enriched his life:

"I started to focus more on experiences rather than things. I realized that I was often buying things as a way to fill a void or distract myself from my problems. Instead, I started to invest more time and money into experiences that made me happy, like travel or trying new hobbies. Not only did this help to break the cycle of impulse buying, but it also gave me a greater sense of fulfillment and purpose in my life."

Ijaz M. John Jay College of Criminal Justice

3. Eliminate impulse buys

When you’re running into a store to grab something you need, one wrong turn can lead you to the candle aisle or the workout gear section. Without discipline-- or a shopping list--you may buy excess products and services on a whim. Eventually, you could even find yourself in credit card debt. It's best to prioritize your needs over your wants and make purchases with intention. Alexandra from Princeton shares her advice on overcoming impulsive spending:

"The first step I took towards fixing my problem was preparing myself better before going out to shop. I began to make lists of the things I needed and stick to them. If I did not need it, I would not buy it. This helped me to focus my mind on the things I needed rather than the things I wanted…As a result, I became more disciplined in my spending habits, and I was less likely to make impulsive purchases."

Alexandra E. Princeton University

4. Stop comparing yourself to others

Everyone’s financial situation is different. When you try to keep up with the spending habits of your peers, you may begin to fall behind financially. While the fear of missing out in college is real, there are plenty of ways to battle FOMO in budget-friendly ways. Maleha from Virginia Tech, shares how she beat the habit of comparison:

"Instead of comparing myself to others and feeling the need to keep up with their spending habits, I focused on my own financial goals and priorities. I reminded myself that everyone has different financial circumstances and that it's important to live within your means and not try to impress others with your spending. And you know what? It worked. By staying committed to my budget and financial goals, I was able to overcome my impulsive spending habit and establish healthier spending habits that have had a positive impact on my financial stability and overall well-being."

Maleha A. Virginia Tech

5. Learn how to DIY

There are certain spending habits that are hard to shake. Maybe you like how confident you feel with a fresh set of nails. Perhaps you’re convinced your daily $7 vanilla latte is a good luck charm. In these types of situations, you could learn to do it yourself (DIY) to save money. Of course there would be some upfront costs, but overtime, becoming your own nail tech or making coffee at home could pay off in the long run. Jake shares how he slashed his spending on going out to eat by learning to cook:

"Cooking allowed me to try new foods, without spending so much money. Soon enough cooking became a real passion because I was able to create whatever type of dish I wanted. Instead of investing my money by buying food, I started to invest my time in creating it. First, I made chicken cutlets, then falafel, and I even tried to roll sushi. The sense of accomplishment and pride that comes with creating something from scratch made me want to do it even more…With the money that I would be spending on food, I started putting in a savings account, and investing in my future."

Jake C. Northeastern University

6. Have an accountability partner

There are specific challenges in life that go smoother with a familiar face by your side. Whether you’re aiming to visit the gym consistently, study more, or pay off debts, having an accountability partner can make all the difference. Carly from FSU shares how she got her finances on track with the help of her dad:

"I would often spend my money carelessly on things I didn't need, leaving me short on funds for important expenses like textbooks or rent. It was a bad habit that I knew I needed to break, but I didn't know where to start. Thankfully, my dad noticed my struggles and suggested we enroll in a finance course together…One of the most helpful aspects of the finance course was having my dad as my partner. We were both learning together and could hold each other accountable."

Carly Y. Florida State University

7. Invest in your future

In today’s society, having a 750 credit score or contributing the maximum annual amount to your 401k retirement account isn’t as trendy as a new laptop or handbag. However, investing in your future is the perfect way to curb poor spending habits. When you allocate part of your paycheck to your retirement savings, you won’t be able to spend that money on material purchases. University of Denver student Demitria shares how she stops herself from spending by allocating money for the future:

"By committing a portion of my income to investments, I have created a sense of financial responsibility and discipline, which discourages impulsive spending. Investing in assets such as stocks, bonds, and mutual funds allows my money to grow over time, harnessing the power of compound interest. This long-term perspective has motivated me to focus on building wealth and financial security, rather than succumbing to the temptations of overspending."

Demitria C. University of Denver

Now that you’ve read these tips from college students to achieve better money habits, hopefully you’re feeling inspired to crush any negative financial habit you may have. Don’t wait to start making positive changes to your financial management, as bad habits take time to correct. Remember, that you shouldn’t be too hard on yourself if you open your mobile banking app and find yourself slipping back into your old habits; the good news is that you can overcome even the worst of financial habits if you stay motivated on your financial journey.