How to save money as a college student

For many people, college is the first time they’re truly in charge of their own finances. While it can be a challenge, creating and maintaining a savings account for students is an important lesson for building healthy financial habits that last a lifetime.

And saving money as a student has its short-term practical benefits too.

“Life throws a lot of expenses our way that are hard to plan for, like when your car suddenly refuses to start when you’re running late for class,” says Jacqueline DeMarco, a freelance writer specializing in personal finance content. “That’s why building out a solid emergency fund is something that every college student should prioritize.”

So, how can you save money as a college student? These savings tips can help give you some flexibility with your money and a financially secure start in adulthood.

First things first: Make sure you have a good place to keep your savings. That means finding a bank that’s convenient and offers the features and benefits that work best for you.

DeMarco notes that students may feel limited to banks available on or near campus.

“If they aren’t happy with their on-campus bank options, college students may find that an online bank is a better fit for them,” DeMarco says. “Not only do online-only banks offer all of their services digitally, they also tend to have lower fees and offer higher interest rates than banks with expensive brick-and-mortar locations to pay for.”

Whichever bank you choose, DeMarco says there are two accounts every new student should strongly consider opening: a checking account and a savings account.

You can set up both a savings account and a checking account at the bank of your choice. For example, Capital One makes it easy to get started online: You can open a 360 Checking or 360 Performance Savings account online in about 5 minutes.

Once you’ve set up your checking and saving accounts, it’s time to take the next step toward being responsible with your money. One of the best ways for students to save money is by creating a budget.

How much should a college student spend per month? To figure that out, DeMarco recommends looking at your monthly income, whether it comes from a part-time job, student loans or money from a parent. Then, subtract your monthly expenses, including needs like food and utility bills. Doing this simple math will help tell you how much you can safely spend each month on fun stuff like new clothes or going out—after you’ve put aside a portion for your savings, of course. 

Once you know how much you can set aside each month, automating those savings can make it easier to stick with your plan. Setting up automatic savings is a straightforward way to move money from your Capital One 360 Checking account into your 360 Performance Savings without having to think about it.

Looking to add more room to your budget? Try these money-saving tips for students:

Consignment and thrift stores offer previously owned clothes and other items at a discount. The main differences are that thrift stores tend to be nonprofit organizations, accept more donations and are generally less choosy in what they decide to sell. Consignment stores are often more selective about the donations they accept, and they pass part of the sale to the person who gave them the product.

DeMarco notes that consignment stores can be a smart way for students to save money. They can also be an opportunity to make extra money by selling unwanted items.

Textbooks can cost students hundreds of dollars if they’re new. Instead of paying full price, consider buying or renting used textbooks. “Many college bookstores offer used options, and online platforms often provide affordable alternatives,” DeMarco says.

You might also be able to recoup some of the money you spent once you’ve finished a class by reselling your textbooks to a used bookstore or an online sales platform.

So busy with classes and assignments that you find spending money at vending machines for on-the-go snacks easier than planning ahead? Stop, shop and save. Set aside a few hours each weekend to prepare all of your meals for the week to come. Or, if you live in a dorm, save some extra items from the dining hall so you’re ready when those late-night study session cravings strike.

“Planning meals in advance gives students the chance to make a shopping list and stick to it,” DeMarco says. “As a bonus, having their meals planned will make it easier to avoid the temptation to dine out after a long day of classes.”

Who says you need to splurge to have a good time? There are plenty of ways to have fun without spending money. Chances are that multiple free activities are happening on and around your campus on any given night. You can look up event calendars online or keep an eye out for announcements. Groups and clubs are always looking for people and potential new members, so you can bet they’ll be happy to have you. (Plus, a lot of these events have free food.)

It’s common for stores on and off campus to offer student discounts. To enjoy the benefits, always keep your student ID on you so you can flash it and save some money.

“You’d be surprised how many retailers, restaurants, theaters and entertainment venues offer discounts specifically for students,” says DeMarco, who relied on student discounts to help build her professional wardrobe as she neared graduation. “Plenty of major mall brands offer these discounts.”

Relying on caffeine to get through those late-night study sessions—or just to get moving each morning? Save money by buying a coffee maker and becoming your own barista. DeMarco says that a cheap or used French press is easy to use and could save you hundreds of dollars over the course of a year.

It can be tempting to bring a car to college, whether for grocery runs or the occasional road trip. But the costs of gas, maintenance and parking can add up quickly, DeMarco says. Consider leaving your car at home to potentially save money on fuel. Most college campuses are great for biking and walking. And many also provide shuttle buses and rides to essential off-campus places like grocery stores, as well as safe rides at night.

DeMarco suggests tracking the positive impact these savings tips for students have on your budget. That way, you can see how your small saving methods can add up over time. There are even money-saving apps for students you can download to measure your progress.

As you’re finding new ways to trim your budget, where should you put the money you’ve set aside? DeMarco says you’ve got a few options to consider:

While there are better places for long-term savings, checking accounts are a good tool for college students beginning to manage their own finances. Checking accounts are a good place to keep spending money, funds for paying bills and income from part-time jobs. They give you easy access to the cash you need when you need it. For example, with Capital One’s top-rated mobile app you can deposit a check or check your balance.

Starting a high interest rate savings account in college can make a positive impact on the rest of your financial life. DeMarco recommends a high interest rate savings account for any money that students may not need right away but still want to keep available. “That way, their savings can earn interest, but they can access those funds if needed,” she says.

And putting aside a set amount of money each month into a high interest rate savings account can start earning you compound interest. This is when the interest you earn starts earning its own interest. Even depositing a small amount of savings while you’re in college can add up over the years to make a large stash down the line. You can start earning more with Capital One’s 360 Performance Savings account, which offers one of the best savings rates in America.

CDs—especially those with longer terms—can earn a higher return than a regular savings account. They work best for money you know you won’t need until the CD matures, since withdrawing early typically comes with a penalty. Terms can range from a few months to several years, and rates are guaranteed.

“If a student has a solid chunk of savings they know they won’t touch for a while, they may want to consider keeping their money safe in a CD, where it’s guaranteed to experience growth,” DeMarco suggests.

For students who decide a CD is right for their savings, opening a 360 CD allows them to lock in a rate that’s above the national average, helping their savings grow steadily over time.

It’s always a good idea to start preparing for the more distant future. You can start by contributing money to an IRA. While some college students wait until they have a full-time job that offers a 401(k) plan to begin saving for retirement, the sooner you can get a head start, the better.

There’s no better time to start saving than in college. To make your savings dreams a reality, set goals at the start of each semester and check your progress regularly. Maybe even reward yourself for staying on track. Something as small as the occasional special meal or an activity that doesn’t blow your budget can be a fun way to celebrate those financial milestones.

Saving money can also create some amazing memories with the new friends you’ll be making. Ramen might seem dull, but challenging friends to see who can come up with the best recipe using cheap instant noodles can spice up the fun.

College is often the first time you’re managing your own money, making it a great opportunity to build saving habits that can last after graduation.

Here are a few simple ways to get started:

• Setting up a checking account and savings account can help you manage everyday expenses while setting aside money for future goals.
• Creating a budget and making small changes—like buying used textbooks, planning meals and taking advantage of student discounts—can help you save more.
• Choosing the right place for your savings, whether it’s a high interest rate savings account, CD or retirement account, can help your money grow over time.

The more regularly you save, the more those small amounts add up. Building a savings habit in college can help you feel more prepared for unexpected expenses today and future financial goals tomorrow.

Once you’ve started setting money aside, where you keep it can make a difference too. Capital One’s 360 Performance Savings rate is consistently above the national average, helping you earn more over time. Put your savings into an account that offers a strong rate from day one.