Chime® is a financial technology company, not a bank. Banking services, credit, and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

College Finance Guide 101

In this article

  1. How to become financially independent
  2. How to use a credit card responsibly
  3. How do student loans work?
  4. Balancing student jobs and classwork
  5. Keep expenses down and income up
  6. FAQs
  7. Start creating good money habits today!

College is a great time to start thinking about your financial future. By taking some simple steps now, you can set yourself up for success later in life.

Jamela Adam • August 23, 2022

The allure of college lies in discovering your passions, finding your “people,” and charting your course for a better future. But college also comes with new financial challenges and obstacles. 70% of students are stressed about finances, according to a national study by Ohio State University. 

Affording a college education shouldn’t take a toll on your mental health and distract you from your studies – here’s your crash course on managing your money while earning your undergrad degree.

How to become financially independent

You’ve finally moved out of your parent’s house and settled into your exciting college life. Congratulations! That’s a huge milestone. Now that you’re officially a young adult, you have more freedom to explore your interests and take on new responsibilities: doing your laundry, making your own doctor’s appointments, and, most importantly, managing your money responsibly.

Here are some tips to help you become financially dependent and be able to afford more than grocery store ramen for dinner.

Create a monthly budget and stick to it

College is a transformative time in your life where you’ll make new friends and memories that’ll last a lifetime. But when you’re living your best life, it can be extra tempting to adopt the YOLO mentality and splurge on overpriced boba milk teas and Coachella tickets. 

Stay disciplined by creating a budget and sticking to it. Consider using the popular 50–30–20 budget rule where you allocate 50% of your money to ‘needs,’ 30% to ‘wants,’ and 20% to savings. You can even sign up for a budgeting app like Mint or Personal Capitol to help you track your spending, so you know where your money is going. 

Let compounding work its magic

Albert Einstein is often quoted calling compound interest “the eighth wonder of the world.” Though no one has proven that he said this, there’s no denying that compound interest is pretty amazing! 

Here’s how it works: When you invest money, you not only earn interest on the original amount, but you also earn interest on the interest that has accumulated. This snowball effect can have a big impact over time. 

In college, you might not have a lot of disposable income to invest. But that’s alright! Every penny counts when it comes to compounding interest. So start investing as soon as you can. 

By investing just $100 a month ($3.33 a day), you can be sitting on $16,000 in 10 years – assuming the annual interest rate is 7%.

Make student loans a last resort

According to the Education Data Initiative, as of 2021, the average student loan debt is around $37,000. And private student loan borrowers owe a whopping $54,921 on average. 

Student loans can feel like free money when you’re in college. But once you graduate and the grace period is up, the reality sets in – you need to pay the entire balance plus interest. If you’re not careful, you could easily overextend yourself and spend years paying off your loans.

How to use a credit card responsibly

Credit cards are a lot like relationships: they can be empowering, or they could become the source of major headaches. Like any big decision, there are pros and cons to taking the plunge and opening a line of credit in college. Before signing up for a shiny new card, ensure you understand the risks and rewards. 

Pros of using credit cards

  • Great for building credit

According to an Experian report, more than 62 million consumers in the United States have a thin credit file – in other words, little to no credit history. If you want to buy a house or take out a car loan in the future, it’s important to start adding to your credit file as soon as you can. One way to do that is by signing up for a credit card and using it wisely. This way, you can show future lenders that you’re a responsible borrower with little risk of default. 

  • It helps track your spending

When you’re using cash, it’s easy to lose track of how much you’re spending if you don’t write it down. Buying things with dollar bills can feel like spending ‘free’ money since the transactions aren’t recorded on your bank statements. But with credit cards, you can check your balance online or on your phone to see how much money you have left to spend.

  • Rewards!

There are plenty of reasons to love credit cards, but rewards are one of the best perks. You can earn points for every purchase with many cards, adding significant savings on travel, bookings, and even online shopping credits. And speaking of travel, some credit cards even offer valuable benefits such as free checked bags and lounge access! 

Cons of using credit cards

  • Could lead to debt

According to Experian’s 2021 Consumer Review, the average consumer credit card debt is $5,221. If you’re not careful, you could quickly rack up thousands of dollars in debt and put your financial health at risk. To avoid overextending yourself, only use your credit card for things you can afford –  if you only have $350 in your bank account, you may want to rethink splurging on a pair of $2,000 Yeezys. 

  • Interest charges 

One major downside to using credit cards is that you can incur interest if you carry a balance from one month to the next. Interest can add up quickly because credit cards tend to have high interest rates, averaging 19.62% as of July 2022. So if you use a credit card, be sure to pay off your balance in full each month to avoid those pesky charges. 

  • Can damage your credit score

A credit card is a double-edged sword: using it wisely can help you build your credit. But if you misuse it, your credit score can suffer. According to FICO’s credit damage data, one 90-day late payment can drop your credit score by 120 points. Of course, this number can vary depending on your credit situation. But mismanaging your credit card can have serious consequences.

How to build credit in college

Building good credit in college can help you secure the best rates on loans and credit cards after graduation. Here are some steps to skyrocket your credit score: 

  1. Make payments on time. Payment history accounts for 35% of your credit score, so making all of your payments on time is crucial. Set up automatic payments if that helps you remember, or set reminders in your calendar.
  2. Keep an eye on your credit report. Review your account regularly to check for inaccuracies and signs of identity theft or fraud. You’re entitled to one free credit report per year from each of the three major credit reporting agencies.
  3. Get a secured credit card. Start building credit with everyday purchases and on-time payments when you open a Chime Credit Builder secured credit card1. 
  4. Keep balances low. Most experts recommend keeping your balances below 30% of your credit limit. So, if your credit limit is $1,000, keep your balance below $300. Maintaining a low balance will help improve your credit score over time.

How do student loans work?

There are two types of student loans: federal and private

Federal student loans are issued by the government and typically have lower interest rates than private loans. They offer more flexible repayment options, including income-based repayment plans and loan forgiveness programs. 

Private student loans are issued by banks and other financial institutions. These loans typically have higher interest rates and fewer repayment options. Plus, private student loans aren’t eligible for government forgiveness programs.

Student loan repayment

When you take out a student loan, you borrow money from a lender (either the government or a bank) and then use that money to pay for your education. Once you graduate or leave school, you start repaying your loan with interest. 

Most federal student loans offer a six-month grace period after graduation, during which you aren’t required to make any payments. But some private lenders may require you to start making payments while still in school.

🔥 Chime pro tip: when it comes to borrowing money, it’s best to borrow only what you need and be prepared to repay on time and in full. 

If you’re struggling to manage your student loan debt, resources are available to help. You can contact your loan servicer to discuss your repayment options for federal student loans. If you have private student loans, you may want to consider consolidation or refinancing to get a lower interest rate or more extended repayment period.

Balancing student jobs and classwork

As a college student, you know the drill: classes, homework, exams, and then rinse and repeat. But how do you factor in a part-time job? How do you make time for both without pulling all-nighters or burning out before the school year ends? 

Avoid spreading yourself too thin: find an on-campus job through the federal work-study program. This way, you won’t have to spend hours commuting between campus and your workplace. 

If you don’t qualify for work-study, don’t fret! You can still find great off-campus jobs close to campus and have a flexible schedule. Check out retail stores, restaurants, or gyms – they’re almost always hiring. 

If you’re looking for a part-time job related to your major or studies, head to one of the best job search platforms for college students: Handshake. With Handshake, you can search for part-time jobs by location, industry, or keyword. And you can also filter your search by job type and salary.

Keep expenses down and income up

The best way to save money in college is by keeping your expenses down and leveling up your income. Namely, avoid spending money on things you don’t need and make more money to afford the things you do need. Here are some tips.

To avoid spending money: 

  • Look for used textbooks online or at the campus bookstore. 
  • Take public transportation or ride a bike instead. If you must have a car, get a used one.
  • Avoid eating out by cooking your meals at home.
  • Make use of your school’s gym rather than paying for a membership at a local gym. 
  • Take advantage of the Amazon Prime Student Account for free shipping and discounts. 
  • Share rent by living with roommates. 

Now let’s talk about how to grow your income

  • Get a full–time job during summer break.
  • Apply for the Federal Work-Study program. 
  • Start freelancing in your field of interest. You could write articles, do graphic design work, program, etc. 
  • If you’re good at a particular subject, offer tutoring services to other students.
  • Do odd jobs around campus or in the community like yard work, walking dogs, babysitting, etc. 
  • Sell used items on eBay, Depop, and Craigslist. 


How do I get a credit card for the first time?

Applying for your first credit card can feel like a big step. But don’t worry, it’s not as complicated as it seems. Here’s how to get your first credit card: 

  1. Figure out what kind of credit card you want. Do you want a rewards card that gives you points for every purchase? Or a low–interest card that saves you money on interest charges? There are many options, so take the time to research and figure out which card is right for you.
  2. Apply. Once you’ve chosen a card, it’s time to complete an application online. You’ll just need to provide basic information about yourself, like your name, address, and Social Security number.
  3. Wait for the result. Once you’ve submitted your application, the credit card issuer will run a hard inquiry on your credit report. They’ll look at your credit history to see if you’re a good candidate for a credit card. You may have trouble getting approved for a traditional credit card if you have a limited credit history. But don’t worry – there are plenty of options for people with thin credit files (like secured credit cards).
  4. Activate your new card. You’ll usually receive your new card in the mail within a week after approval for the credit card. Once it arrives, activate it and start using it responsibly so you can build your credit history. 

How do I apply for college financial aid?

There are three types of college financial aid: Grants and scholarships, federal work-study, and student loans.

Grants and scholarships are forms of aid you don’t need to repay, which means it’s free money! Federal work-study provides you with on-campus (sometimes off-campus) work opportunities, while student loans need to be repaid with interest.

Apply for these opportunities is by filling out the Free Application for Federal Student Aid (FAFSA). This form determines your eligibility for federal aid programs. You’ll need to provide your personal information, your family’s income, and other information. The FAFSA is available online at The Federal Student Aid website. Make sure to fill it out as soon as possible after October 1st.

Start creating good money habits today!

College is the perfect time to start building healthy financial habits to set you up for future financial success. By learning how to budget, building credit with Chime Credit Builder¹, and leveling up your income, you’ll be in good shape to tackle whatever comes your way after graduation. 

If you need help paying for college, read our student loan guide so you can apply for financial assistance like a pro.

Chime® is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card and the Chime Credit Builder Visa® Credit Card are issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit and credit cards are accepted. Please see the back of your Card for its issuing bank.

While Chime doesn’t issue personal checkbooks to write checks, Chime Checkbook gives you the freedom to send checks to anyone, anytime, from anywhere. See your issuing bank’s Deposit Account Agreement for full Chime Checkbook details.

By clicking on some of the links above, you will leave the Chime website and be directed to a third-party website. The privacy practices of those third parties may differ from those of Chime. We recommend you review the privacy statements of those third party websites, as Chime is not responsible for those third parties' privacy or security practices.

Third-party trademarks referenced for informational purposes only; no endorsements implied.

Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A. and Stride Bank, N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).

1 To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

Address: 101 California Street, Floor 5, San Francisco, CA 94111, United States.

No customer support available at HQ. Customer support details available on the website.

© 2013-2024 Chime Financial, Inc. All rights reserved.