How to Manage Money in College

Key takeaways:

• Plan for the total cost of college—not just tuition. Your college budget should include living expenses, books, transportation and other day-to-day costs.
• Start the FAFSA as early as possible to be considered for grants, work-study and certain school-based aid opportunities.
• Build credit carefully and consistently to support future financial independence.
• Implement a simple budget to help you stay on top of spending, borrowing and saving while in school.

Your college years may be some of the most exciting of your life. But if you’ve read the headlines lately, you’re likely also worried that they could be some of the most financially stressful. College tuition at both public and private universities has doubled over the past 30 years, with the total cost to attend some universities coming close to six figures. Coupled with rising overall prices and persistent inflation, you might be asking yourself: Can I even afford higher education?

The answer is yes—especially if you begin the process armed with some financial knowledge. This guide covers the money moves that matter most, from understanding financial aid and scholarships to building a budget, choosing the right bank account, and avoiding common student scams

Chapter 1: Before college

Before classes begin, a few big-picture financial decisions can shape your college experience. This is the time to get realistic about costs, how you plan to pay for them, and what financial setup will support your day-to-day life.

Be aware of college costs in 2026

Let’s be honest—college is expensive. A four-year student at a public university in 2026 can expect to pay more than $27,000 on average for an academic year. At a private university, students living on campus can expect to pay more than $58,000 annually. Average college tuition has grown at a compound annual rate of 4% since 2000.

But tuition is only part of the equation. When it comes to managing money in college you’ll also need to account for books, housing, food, transportation, and personal expenses. These categories add up quickly. For example, the Bureau of Labor Statistics reported that prices for educational books and supplies were 9.4% higher in May 2025 than they were a year earlier.

Define your college plan

Choosing where to go to college is the first step, and understanding key financial tips for college students before you apply can help you make a more informed decision.

Start by asking yourself a few key questions, such as:

• Where is your ideal school located and what is the cost of living there?
• What career are you pursuing after graduation?
• Will you live at home, on campus or off campus?
• Is a four-year school, two-year school or transfer path the best fit for your goals?

“While private schools have higher sticker prices, they tend to offer more grants and scholarships than public universities,” says Brian Safdari, founder & CEO of College Planning Experts. “So they aren’t out of the question for families who assume they’ll automatically be more expensive.”

If you’re looking at public schools, review residency rules carefully. In-state tuition is often much lower than out-of-state tuition, but the rules for qualifying vary by school and state.

Also consider whether a four-year program is necessary or if a two-year college may make more sense. A four-year degree may be required for some careers (such as engineering, teaching or accounting), while an associate degree or transfer path can be a more affordable route for others (such as nursing support roles, paralegal studies or certain skilled technical fields).

Room and board is another major expense, averaging more than $14,000 at both public and private universities in the past academic year. If living at home is an option, it may save you a large chunk of cash compared with living on campus or renting off campus.

Estimate how much you’ll need

Once your college plan is in place, budgeting for students starts with estimating how much money you’ll actually need for the year.

Here’s what to tally:

• The net cost of the college you plan on attending (use this calculator from the College Board, which not only calculates tuition for a specific school, but also accounts for any scholarships or financial aid you are eligible to receive)
• School supplies, including books, software and tech
• Room and board
• Dorm room or apartment basics, if you won’t be living at home
• Campus meal plans or groceries
• Transportation
• Clubs, social life, and personal spending
• Emergency expenses, like replacing a laptop

It’s also worth noting that effective money management for college students includes understanding the significant regional differences in tuition, room, and board costs. Public universities in some Northeastern states have higher tuition than schools in parts of the South and Midwest. Vermont, for example, has the highest in-state tuition, whereas Florida has the lowest. That doesn’t mean you should rule out a school you love, but it does mean your location choice directly affects your budget.

Understand student loans and the FAFSA

If you need financial assistance, start with the Free Application for Federal Student Aid, or FAFSA. This is the form the federal government and many colleges use to determine whether you’re eligible for federal, state and college-sponsored financial aid—including grants, work-study programs and loans.

There were several FAFSA changes rolled out with the 2024–25 form that are important to understand. Those include:

• Replacing the Expected Family Contribution with the Student Aid Index, a new formula for estimating your financial need and determining eligibility for need-based aid
• Reducing the number of questions on the form from 108 to 46 to simplify the process
• Allowing users to transfer tax information directly from the IRS into the FAFSA, which can reduce errors and save time
• Requiring all contributors—including a parent in some cases—to have an FSA ID and consent to their information being used on the application

“These changes have improved the form so that the process is more streamlined,” says Sarah Austin, policy analyst at the National Association of Student Financial Aid Administrators.

For dependent students, FAFSA rules are a little more nuanced than they used to be. For example, if parents are divorced or separated, the parent who provides the most financial support is generally the one who should be included on the form. Also, if a parent has multiple children in college at the same time, each student must submit their own FAFSA, and financial aid eligibility is calculated separately for each.

When it comes to borrowing, it helps to think in tiers:

• Tier 1: Federal aid. This usually comes first because it can include grants (such as Pell Grants) that don’t need to be repaid, work-study opportunities, and federal loans with borrower protections.

Families who plan to borrow should watch for two changes coming in 2026. Beginning July 1, Parent PLUS loans (educational loans parents can take out for their children) will be capped at $20,000 per student per year and $65,000 over a student’s lifetime. There will also be two repayment options: The Repayment Assistance Plan and a Tiered Standard Plan.

• Tier 2: Private loans. Sometimes federal aid is not enough to cover the cost of tuition. In this case, you might consider a private loan, which are offered by lenders such as College Ave.¹

Through Fifth Third’s partnership with College Ave¹, students and families can explore private student loan options for undergraduate, graduate and parent borrowing, as well as refinancing. The application process is designed to be quick and straightforward, with flexible repayment options and no origination or prepayment fees. Private lenders generally set rates and terms based on your credit history, as opposed to federal lenders, which determine it based on the FAFSA.

“Federal loans have fixed interest rates and many borrower protections in place, such as income-based repayment options,” says Austin. “Private loans can have variable interest rates but can be helpful in certain situations—for example, if you need to cover a gap after federal aid.”

Search for scholarships for college students

Before applying for loans, spend some time looking for scholarships. Scholarships can come from colleges, private organizations, nonprofits, employers, professional associations, and community groups. Some are based on academic performance, while others are based on financial need, extracurricular interests or identity, or where you live or where your family works.

Nancy Goodman, founder of the nonprofit College Money Matters, recommends researching:

• Local organizations and companies that support students from your area
• Your parents’ employers, which may offer scholarships to their employees’ children
• Religious and community organizations
• Professional associations tied to your intended field of study

“Most scholarship deadlines are in March, so you should start applying for them around the same time you’re applying to colleges themselves in order to be eligible for the coming academic year,” Goodman says.

Devise a repayment plan

It may be strange to think about loan repayment before college even starts, but understanding how to save money as a college student is one of the smartest things you can do. Knowing what your future monthly payment could look like can help you decide how much debt to take on.

A good first step is to estimate what you may owe after graduation, then run that number through a repayment calculator. Tools like Fifth Third’s Loan Repayment Calculator or the Federal Student Aid Loan Simulator can help you compare potential monthly payments under different loan amounts and repayment timelines.

Learn how to build credit

Establishing credit might not seem that urgent when you’re still living at home or just starting school, but it plays an important role in financial independence. Your credit history can affect your ability to qualify for a private student loan, rent an apartment, finance a car, or eventually apply for a mortgage.

Building credit is less about borrowing a lot of money and more about using credit responsibly over time. In practical terms, that means opening an account, using it lightly and paying the balance on time every month.

After you’ve had an account long enough and payment activity has been reported, you can begin to build a credit history and a credit score. Building strong credit (a credit score of 670 or higher) takes time. A key factor is credit utilization, which is the percentage of your available credit that you’re using. Experts often recommend keeping your balance below about 30% of your credit limit as it signals you’re not relying too heavily on borrowed money.

For example, if your card has a $500 limit, trying to stay under $150 is a good general rule of thumb.

A few easy ways for students to start building credit include:

• Open a secured credit card.² A secured card usually requires a refundable deposit upfront (such as $300), and that deposit often becomes your credit limit.
• Become an authorized user. If a parent or trusted family member has strong credit habits, being added as an authorized user on their card allows you to benefit from their credit history.
• Use a starter card. Some students may qualify for a student card or store card at a place where they shop regularly. It can be helpful for building credit and earning points on everyday purchases, but should be used cautiously.

Chapter 2: During school

Once you’re on campus, money management becomes a day-to-day habit. This is where small choices begin to matter: what you spend, what you save, how you track it all, and how you keep your financial life from becoming one more source of stress.

Discover how to budget properly

One of the best ways to feel more in control of your money is to create a budget. And college is a great time to start because your financial life is still simple enough to build good habits early.

Follow these steps:

• Step 1: List the money you can use. That might include take-home pay from a job, family support, money left after tuition and school charges are covered, or savings you’ve set aside for the year.
• Step 2: Identify your fixed expenses. These are the costs that stay mostly the same each month, like rent, insurance, phone bills, streaming subscriptions or a car payment.
• Step 3: Identify your variable expenses. These are the costs that shift from month to month, such as groceries, eating out, transportation, entertainment, school supplies and clothing.
• Step 4: Calculate a monthly number. Add up your expected available money and compare it with your expected monthly spending so you know what you can realistically afford.

Tip: Tools like Fifth Third’s monthly spending calculator can help you map that all out.

If your income is irregular, seasonal, or limited, it can still help to create a monthly number. One way to do that is by estimating how much usable money you’ll have across the year and dividing that number by 12. For example, maybe you earn most of your money during the summer and work very little once classes begin. Turning that into an average monthly amount can help you avoid overspending early in the semester.

Having a budget won’t just help you decide between your meal plan and ordering takeout. It can also help you plan ahead—for example, whether you can afford to take an unpaid internship or whether you’ll need a paid summer job.

Consider working while in college

The benefits of working while you’re in college are myriad. It can help you reduce borrowing, build your resume, develop time management skills and test-drive different types of work before graduation.

One option is Federal Work-Study, which you may qualify for when you fill out your FAFSA form. It provides part-time jobs—on campus or with approved off-campus employers—for undergraduate and graduate students with financial need. These jobs encourage community service work and roles related to a student’s course of study, and they pay at least the federal minimum wage.

Other jobs that might be a good fit for students include:

• Service and retail work
• Dog walking or pet sitting
• Tutoring
• Babysitting
• Food delivery or other app-based gig work

Look into using a student checking account

Having a bank account can make everyday money management a lot easier. As a student, you’ll likely want a checking account that’s simple to use, easy to monitor and designed to help you avoid unnecessary fees. A checking account like Fifth Third’s Momentum^® Checking³, which has no monthly service fee and no minimum balance requirement, is one option.

It may also make sense to open a separate savings account³ so your “spending money” and short-term savings don’t get mixed together. Even a small emergency fund can make a big difference when something unexpected pops up.

You can also use a mobile banking app⁴ to link your accounts together, monitor your balance in real time and keep tabs on spending as it happens.

Avoid common money mistakes

Financial freedom can produce some painful lessons—like offering to cover dinner without checking your balance first or putting every rideshare on your credit card, then dreading the bill at the end of the month. Other slip-ups include overspending loan money, not tracking expenses, and assuming small purchases don’t add up.

These habits are easier to manage when you make financial check-ins feel normal (and fun!) rather than like punishment. Some strategies include:

• Have an accountability buddy. Pick a friend to meet for coffee at the beginning of every month and do a quick money review together—even if it’s only to discuss spending or setting one financial goal for the next month.
• Reward yourself for small wins. When you stick to your budget, transfer money to savings or pay your card on time, celebrate in a small, low-cost way.
• Set short- and long-term goals. Maybe your short-term goal is paying off your credit card each month, while your long-term goal is saving for a trip with friends. Having something specific to work toward can keep you motivated.

Be on the lookout for college scams

Another major risk is scams, many of which are designed to target college students. The Federal Trade Commission has warned specifically about fake job scams aimed at students, including messages that appear to come from a professor or campus office.

Some common scams targeting college students in 2026 include:

• Fake tuition or financial aid messages claiming you owe money and must pay immediately
• False student debt relief companies promising loan forgiveness
• Fake jobs or internship postings that ask for upfront fees or request that you deposit a check and forward the money to another account
• Scholarship scams that guarantee money in exchange for a fee
• Phishing emails or texts designed to steal your login or bank information

Protect yourself by slowing down before clicking, paying, or sharing personal information. Double-check who sent the message, avoid anyone who pressures you to act immediately and never pay upfront for a job, scholarship or debt-relief service.

College is a time of firsts: Your first big academic decisions, your first taste of independence and, for many students, your first real experience managing money on your own. That can feel overwhelming at times, especially when so much of college financing seems unclear.

But you don’t need to have everything figured out right away. What matters most is starting with a plan, asking questions, and building smart habits little by little.

What to do next

• Familiarize yourself with some borrowing options to help you reach your future goals.
• Learn about five checking account benefits that will help you manage your money while in college.
• Get tips for how to use online banking to streamline money-related tasks.