Lending Club Blog

7 Rules of Money for New College Students

Ah, fall. There is something refreshing about fall. For students it signals the beginning of a new school year, and for new college freshman, one of the most significant moments of your growing up: Buying stuff on your own.

Yes, gone are the days of a furnished home courtesy of your parents. And fresh fruit and a full pantry at a moment’s notice? No more. Need laundry done? I hope you have some quarters.

Speaking of quarters, going to college without knowing how to handle your money is a disaster waiting to happen. Before you charge that new $2,000 laptop read my 7 rules of money for new college students…

1. Have ONE credit card.

Yes, just one. You don’t need any more than one to build your credit.

2. Get a cushion. No, not a beanbag!

Overdraft fees can kill your spirit faster than any sorority girl rejection. Always keep a minimum of $500 in your checking account. This takes mental discipline. Once you’ve got that $500 in there, forget about. It’s like if you’ve got $650, you really only have $150. Start doing this now.

3. ABU – Always Buy Used

Craigslist and eBay are your friends. Need I say more?

4. Take Daddy’s Money, but Remember This…

If your parents are helping you with college, that’s great. They’ve worked hard to help with your schooling, and you should without a doubt accept their help. Just remember that someday (i.e. graduation) the financial help likely should and will end.

Nothing makes you feel more grown up than stopping assistance from your parents and being financially independent.

5. Always be Cheap. You Can be Frugal Later!

Not only is it socially OK to be a cheapskate during your college years, it’s often the only way to get by. Embrace your inner cheapskate. Your future, smarter self will thank you for not racking up the credit card balance.

6. Remember, Money Can’t Buy Friends

Sure, having a killer car is nice. Always picking up the tab will surely please people. However, once you max out your credit card or your trust fund runs out, will you still have your entourage?

Don’t use money to impress anyone in college. You’ll just look stupid pretending you somehow “earned” enough at your unpaid internship to buy that 50-inch plasma TV.

7. Set Up a Simple Budget

It doesn’t need to be fancy. You can even do it on a napkin in the cafeteria. List your bills each month, and budget out your other expenses. Look at your spending each month and stick to your limits!

Now, I’m off to have a Cup o’ Noodles. All this college nostalgia is getting to me…

Tuesday, September 9th, 2008 at 1:27 pm

Comments (14)

  1. Justin_Bobby:

    That’s great advice, man. Every college student should read this!!

    September 10th, 2008 at 11:03 am

  2. Morgan:

    Yes, as a financially concerned female college student, I live in
    fear of that day where I am rejected by a sorority girl.

    September 10th, 2008 at 8:54 pm

  3. Adam:

    I don’t think you have used the term “Frugal” correctly here….

    September 11th, 2008 at 3:55 pm

  4. Really? How so? Can one not “be frugal”?

    September 11th, 2008 at 9:01 pm

  5. Lee:

    “Always be Cheap. You Can be Frugal Later!” frugal means cheap.

    September 12th, 2008 at 7:38 pm

  6. ryot:

    You did use frugal wrong. Frugal means “careful with money” or

    September 12th, 2008 at 9:50 pm

  7. Smurf Cadet:

    #5 gave me pause at first too but then I took it as a subtle play
    on words. The two words are synonymous at a basic level but the
    vibe of their usage, their tone, is different. It’s virtuous to be
    “frugal” but to be “cheap” is more of a harsh thing; like to call
    oneself cheap is to be harsh with oneself but to call another that
    is to be derogatory. So, the point can be taken like “be harsh with
    yourself (about saving money) now; the time in life when you’ll be
    able to be more graceful about it will come later.”

    September 13th, 2008 at 11:21 am

  8. michael:

    smart tips. common sense, really. good job. i would add one thing,
    however. i would mention to the reader that more than one credit
    card is actually not conducive to a healthy credit
    rating. i’m sure this doesn’t apply to every situation but to the
    best of my knowledge the more credit you have available, the weaker
    your credit rating may become. this is because creditors must take
    into account the amount of debt a person could potentially incur
    should they wish to max out each source which in some cases may be
    much more than the individual is able to repay in a timely fashion.

    September 15th, 2008 at 1:58 pm

  9. spadoosh:

    i have to say i found this a bit ridiculous. i was hoping for some
    scrappy tips but this list looks like it was made for rich kids. if
    you have the money to be paying for a “killer car” and be picking
    up the “tab” all the time (did you know that actual poor college
    kids don’t go out to real restaurants, right, they just get cheap
    chinese food and pizza or groceries?) then you’re probably fine for
    money. and recommending a $500 cushion? us poor college kids do not
    have $500 just lying around. we also do not have to worry about
    taking “daddy’s money.” we also could never make the mistake of
    buying friends, because we do not have money. we
    also would never even consider having two credit cards, because we
    watch our money so carefully we could never overspend–and besides,
    we don’t shop often enough for the bills to rack mysteriously up. i
    go to an extremely expensive private school in an extremely
    expensive city and all of these tips made me shudder. they are
    clearly tailored for the wealthy end of society.

    September 18th, 2008 at 8:45 pm

  10. i agree w/spadoosh:

    yay for people like spadoosh, like I said above, i completely

    September 24th, 2008 at 5:11 am

  11. Great article – that I will share with my readers.

    September 28th, 2008 at 10:47 am

  12. Jim:

    Overall, good advice…but I would disagree with the first tip. I
    would say have NO credit card. Credit cards (even one0 and
    borrowing are a great way to start your financial life on the wrong
    foot. I strongly suggest reading “Total Money Makeover” by Dave
    Ramsey. It talks about real fiscal management.

    October 29th, 2008 at 3:46 pm

  13. I have to agree with spadoosh. $500 cushion that you pretend
    doesn’t exist. Well, I would love to do that and have it even
    higher, but rent needs to be paid and the occasional book cannot be
    found in the library. I go to an extremely cheap state school in an
    extremely cheap city, but unfortunately the job market here is
    absolute bunk and I haven’t been able to find a job despite months
    of intensive searching. Thank god for cheap households, Smiths
    cards, and boyfriends who are salaried and can’t be fired due to

    October 29th, 2008 at 9:49 pm

  14. Amanda:

    As a full-time college student, I can safely say that these tips
    are useless for me and every other college student I know. I have
    never had the luxury of even one credit card, have never been able
    to have $500 in my bank account at once (I have $300 at the most,
    and 100% of it is for bills/expenses, no way I could have a cushion
    of more than about $20), and I basically have so little money that
    the rest of the “tips” couldn’t possibly apply either. Now, not
    everyone is as flat broke as me, but I agree that this was probably
    put together with the more “well to do” students in mind who
    obviously don’t really need much advice.

    April 9th, 2009 at 5:43 pm


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