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How to save money in college

Key takeaways

  • Saving money in college is one way that could help set you up for financial success after graduation.
  • Take advantage of your school's amenities and student discounts to save, and don't forget to keep filling out the Free Application for Federal Student Aid (FAFSA) and scholarship applications to keep costs as low as possible.
  • Then make sure you're storing your savings in the right account for your goals.

These days, higher education often means high prices. The average total cost of attendance for a first-year student living on campus rose to more than $26,000 at public universities and nearly $56,000 at private schools in 2022, according to the National Center for Education Statistics.1

With that sticker price, you may wonder how college students can afford to save anything at all. But it is possible to prioritize savings while getting an education. Here's how to save money in college, so you graduate with good money habits.

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1. Pick up part-time work

Working part time while in college has benefits beyond adding to what's in your bank account. According to the National Center for Education Statistics,2 students who worked 15 hours a week or less were more likely to graduate within 6 years than students who worked more—and even students who didn't work at all.

Depending on your financial situation, you may qualify for the Federal Work-Study Program, which can help you snag a job on campus. Or you could look for a job at a local café, restaurant, or retailer. Keep in mind that you'll want a job that's flexible enough to accommodate your class schedule.

2. Set up a budget

Budgeting can seem pointless when you don't have much to spend. But establishing a budget early on means it'll be a habit later when you have more money to put toward financial goals. If you've never created a spending plan before, check out our guide on how to budget to find simple ways to make a budget work for you.

3. Carry your student ID

Student IDs aren't just for getting access to campus buildings. Flashing it at stores, mass transit providers, museums, and even restaurants could get you discounts. Your college may have a list of local and even national businesses that offer its students special pricing. And at any store, it never hurts to ask at checkout or entry if there are student discounts too.

4. Minimize your textbook costs

Textbooks can be a major financial drain each semester. In fact, undergraduate students spend on average over $1,200 on them a year.3 But there are easy ways to save, such as:

  • Renting or buying used textbooks.
  • Comparing campus bookstore prices with those available online.
  • Buying previous editions of textbooks. Just keep in mind there may be minor—or sometimes major—changes between versions.
  • Checking your campus library for copies of popular class textbooks.

5. Make full use of your school's amenities

You're likely paying for more than just tuition and room and board when you attend college. Make sure you're getting the most out of your activities fee by using campus resources when you can. That could mean going to the school gym and health centers, which may be available for free or at a reduced price. Also check out whether there are cultural or entertainment events subsidized by your school.

6. Plan your meals

Meal prepping isn't just a millennial thing—or for people who aren't paying for the campus meal plan. Ask yourself these questions to figure out the right steps for you:

  • Is your dining hall all-you-care-to-eat or priced a la carte?
  • Are there special hours you need to keep in mind to make sure you don't have to order delivery or takeout in a pinch?
  • If you live off campus or have a lower-tier meal plan, have you strategized your meals to use ingredients efficiently each week? If not, brush up on our top grocery shopping tips.

7. Save money on housing

Outside of tuition, housing is often college students' biggest expense, clocking in at about $11,000 and $13,000 a year, depending on whether you live on or off campus.4 Research costs both on campus and in surrounding neighborhoods to figure out the best living option for you. While moving off campus may seem cheaper at first, don't forget to factor in the time and money you'll spend commuting to and parking on campus.

You may be able to nab free housing and maybe even a food or living stipend by working as a resident assistant (RA). Generally reserved for non-first-year students, RAs cultivate a community for other student residents and may offer counseling or plan events in exchange for room and board.

8. Fill out the FAFSA each year

The Free Application for Federal Student Aid (FAFSA) determines what need-based scholarships, grants, and federal student loans you're eligible for. Many schools also use it or its private counterpart, the CSS Profile, for deciding what school-sponsored, need-based financial aid you qualify for.

If you're already receiving need-based aid from the government or your university, you likely will be required to fill these forms out every year to remain eligible. Even if you didn't qualify in the past, it may still be worth filling out at least the FAFSA to see if your and your family's financial situation merits additional aid.

An important note for those who rely on need-based financial aid: As you work to save money in college, student assets  like savings and any income you earn may impact your financial aid eligibility.

9. Apply for scholarships and grants

Scholarships and grants (aka the kind of funding that doesn't need to be repaid) aren't just for incoming first-year students. Your school and even private scholarship-granting organizations often reserve some of their cash for returning students. These may be need- or merit-based and may require an application, essays, and letters of recommendation. Check out resources like to explore scholarships and grants you may be eligible for.

10. Pay student loan interest while in school

Though you don't have to make student loan payments while in school, interest generally starts to accrue on unsubsidized federal loans and all private loans during that time. Translation: You'll likely graduate owing more money than you borrowed.5

If you're able, you can start chipping away at that interest. This move could save you hundreds—or even thousands—over the long term, depending on the size of your loan and your interest rate.6

11. Be intentional about finding an account for your savings in college

Saving money in college is a good goal on its own. But you could potentially level up and make sure your money is working hard for you too by depositing it in certain types of accounts. Here are some of the most common ones and when you may want to consider them:

  • Checking account. Checking accounts are meant for everyday spending and generally do not offer much, if any, interest on the money held in them. This may be best for money you want quick access to and plan to spend relatively soon.
  • Savings account. A savings account typically earns more interest than a checking account, but may be slightly less accessible. Depending on where you hold your savings, you may be limited in how many withdrawals you can make per month. That's why savings accounts can be a great option for money you may use within the next 3 years but don't have any immediate plans for, like saving for a short-term goal or building up an emergency savings.
  • Roth IRA. Even though "individual retirement account" is in the name, Roth IRAs can be valuable accounts for college students. Roth IRAs are best known for offering tax-free withdrawals in retirement (provided certain requirements are met), but they also offer the flexibility for you to make penalty-free withdrawals of any contributions you made (but not any investment earnings) before then. You can only contribute as much into it for the year as you earned, however. For example, if 2024’s Roth IRA contribution limit is $7,000 but your campus job only paid you $1,000 (and that was all the earned income you had for the year), the max you could contribute to your Roth IRA is $1,000. If you had no earned income at all during the year, you can’t contribute anything. Consult with a tax professional if you want help understanding whether this is the right account for you.
  • 529 account. You may be familiar with—or even already have—this tax-advantaged savings plan that allows you to set aside money for education. 529s grow tax-deferred, can be withdrawn tax-free for qualified education expenses, and may offer the ability to deduct contributions, depending on what state you live in and open an account in. This could be a good option for funding any future education expenses or repaying student loans. But make sure to consider your entire financial picture as you may be better off repaying loans now than contributing to a 529, depending on your loan's interest rate. Regardless, if you're financing your own education, a 529 might be worth considering.

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Please carefully consider the plan's investment objectives, risks, charges, and expenses before investing. For this and other information on any 529 college savings plan managed by Fidelity, contact Fidelity for a free Fact Kit, or view one online. Read it carefully before you invest or send money. 1,3,4. "Average total cost of attendance for first-time, full-time undergraduate students in degree-granting postsecondary institutions, by control and level of institution, living arrangement, and component of student costs: Selected years, 2010-11 through 2021-22," Digest of Education Statistics, National Center for Education Statistics. 2. "A 2017 Follow-up: Six-Year Persistence and Attainment at Any Institution for 2011–12 First-time Postsecondary Students," Web Tables, Institute of Education Sciences, National Centers for Education Statistics, August 2020. 5. "How does interest accrue while I am in school?" Consumer Financial Protection Bureau, June 23, 2021. 6. "Paying off student loan interest while in school: Is it worth it?" College Foundation of North Carolina: NCASSIT Loans.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

A qualified distribution from a Roth IRA is tax-free and penalty-free. To be considered a qualified distribution, the 5-year aging requirement has to be satisfied and you must be age 59½ or older or meet one of several exemptions (disability, qualified first-time home purchase, or death among them).

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

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