Six Money Advice I wish I knew in College

Money is a sensitive topic that we tend to avoid and it can be the result of our bad relationship with money. By knowing how to leverage money and make your money work for you will make you feel much more empowered. Here are 6 things that I wish I knew about money when I started college. Honest money mistakes and tips that I wish I knew when I was in college that would have saved me thousands of dollars.


Only take out enough loans to cover my college expenses

Throughout my college years, I relied on grants and student loans to carry me through five years. The heavy hitters were my tuition, fees and living expenses. During my first year, I lived in a dorm, and they charged a heavy cost for boarding, much more expensive than living off-campus.

Although I was on top of the money that I borrowed, I had money left over from refunds after charges were paid. I had more “borrowed” money than necessary to even cover my living expenses, it was money that I shouldn’t even be spending.

Now that I’ve started paying back my student loans (which by the way had accumulated some interests) that I realized I was basically leaving the burden to my future self to repay everything I’ve borrowed and more.

Save my refunds in a high yield saving account

I wish I knew about high yield saving accounts such as Wealthfront and Ally Banking when I was younger. These high-interest accounts allow you to gain 1.5% to 2.0% in interest for your banking with them. That is passive income without you even have to do anything except signing up.

My savings account was with a credit union and they offered less than 1% in return interest. The money I’ve made since moving my money from my credit union saving account to Wealthfront in several months is higher in the amount that I’ve accumulated through my 5 years of leaving my money in a traditional savings account.

One of the biggest money-makers that you will ever encounter is time, especially when applied alongside compounding. Imagine the snowball effect, like a snowball rolls down it pick up on more force, and that is essentially the power of compounding.

Also when you are making money from your earnings from interest, you are no longer receiving money from just your original investments, but you also gain money on any interests that you gain.


Invest and grow my money

I wish I knew about passive income sooner and learned how to invest early on. Stocks, bonds, dividends, and all those buzz words are super intimidating to hear in the beginning. But there are plenty of apps out there that make investing so much easier to follow.

When you’re young, the biggest leverage that you have is time. Albert Einstein called the power of compounding the 8th wonder of the world. So when these two forces come together, similar to how your high yield saving account makes money, your investments and gained dividends will make you even more money.

I started my investment journey with a couple hundred dollars that I had leftover from my refunds and I bought a few shares of stocks through Robinhood. I picked a company that I was 100% confident in and bought a few shares. I recommend Robinhood if you have a small chunk of money ready to go since some of these stocks can be expensive based on how the market is performing.

If you don’t have a small sum of money laying around and you want to continuously invest based on how much you have each month, then I recommend you use M1Finance. You can purchase a small percentage of a stock rather than a whole share. So example, I’ve always wanted to invest in Amazon but their stock is over a thousand dollars per share. So instead of buying a whole share, I purchased a small percentage of it. What’s great about M1Finance is it allows you to have a diverse investment portfolio through different industries.

I recommend you to do some research into the market mostly to figure out the trend before buying stocks. You want to buy low and sell high. Prices fluctuate daily, and depending on how a company is doing, their stocks might just rocket after one day, not the best time to buy. So you should narrow down to a list of companies that you are interested in and decide your strategies based on how much money you have.

Distinguish between necessities and luxuries

Food is a necessity. Medicine is a necessity. Gas is a necessity. Your fifth pair of shoes is a luxury. Eating out every day is a luxury. Random gifting is a luxury.

I wish I knew the concept of living below my means when I was in college. In fact, I had the hardest time deciding if something is a necessity or a luxury, and I always found a reason to make a luxury appears to be a necessity.

Necessities are things that are required for your day to day living. Things such as food, personal items, shelter, utilities, and gas for your car.

Luxuries are things that you want, but can definitely live without. These are things like a round of drinks for friends, weekend trips, spa money, shopping, etc. They are usually add-ons and often cost quite a bit of money.

There is nothing wrong with spending some money to treat yourself, but it should not put you in the red. One of my biggest treats or luxuries back then was getting my nails done. A regular manicure and polish can run for about $18-$25, without tips. I had friends who were doing nails on the side and charge at a cheaper price. Shop around for your needed luxuries, whether it be a spa or things to do.

I recommend Groupon, they usually have tons of discounts on things to do in your area and discounts for spas and salons.


Start building my credits by picking a good starting credit card

Growing up, my perception of credit cards was heavily skewed due to the many horror stories of credit card debts. I only heard the bad side of credit cards but no one told me that in order to build your credits, you should start having a credit card.

Using a credit card in a responsible manner, you can grow your credit score by stick to a 30% usage and paying your card on time. Paying your card on time will save you from racking up interest fees and damaging your credit score.

My first beginner card was the Amazon Prime credit card. I started with a $1000 limit, enough for me to start paying my daily expenses. They also have a great reward program, especially since I always purchased things from Amazon. I try to keep my spending to 30%, so about $300 at all times. And at the end of the month, I would pay off my bill online without any hassles.

If you are unsure about what type of credit cards you may want, I recommend you to use Credit Karma to first figure out your credit scores and they also provide credit card recommendations. Now those are only based line recommendations, you should definitely do more research on picking the right card for your living expenses.

If you are a responsible person and good with managing your money, I recommend you to start looking into building your credits. It takes time to build your credit so be careful and protective of your effort.

A good credit score is important if you want to borrow money for your first house, car or refinancing loans. It acts as a “proof” for your credibility and how trustworthy you are with money.

Build a budget and stick to it

Budgeting is setting aside money to cover the things that you need. When I was in college, I usually spend money as I go, and I always found myself overspending on things that I didn’t even need. I hated keeping track of my spending, but I hated it even more when I can’t keep track of where all my money went. It is one of the most frustrating feelings ever and it also brings on the feelings of shame and guilt.

Many people like to use an Excel sheet, which provides more control over your spending. I like to use an app that is not too rigid and keep track of the money I spent versus the money I still have left.

My favorite one is the EveryDollar app by Dave Ramsey. It allows me to add my monthly income and divide my spending based on different categories. After I’ve spent the money, I can easily keep track of it with a few taps and it will update my current budget.

Having a good budget does eliminate the feelings of guilt and frustration because you are no longer spending blindly. You can spend money without guilt after knowing that you have already set aside money to cover all living expenses and personal expenses. It is also a great chance for you to budget your “fun money” without feeling like you’re overspending because you already set aside money for it.

My tip is when you first start living a budget, be honest with all the things that you actually need. Don’t go and cut your $700 monthly food budget to $400, it is a big jump and it will be off-putting to stay within your budget.


I hope you found these tips helpful to better manage your relationship with personal finance. These are mistakes and lessons that I’ve learned and many of my peers also experienced similar situations. Please feel free to share your personal finance tips below, until next time.

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6 thoughts on “Six Money Advice I wish I knew in College

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