personal finance

Quick Tips to Help College Students Start Saving Money

Source: Amanda Mier

I'm a senior at UC Berkeley and I decided before I graduate, I'm going to get my money game together. I set up a budget, figured out where I could cut expenses and the next step — start saving money.

If you're anything like me, you live out of your checking account and try to budget for needs, wants and paying off debt. But saving is the first major step to ensure financial security. And the earlier you start, the more your savings count. As someone without a savings account (or a plan!), I went to the experts to find out why you should start saving as a college student, how to get started, and the best way to make your money count.

Why should I start saving now?

Even if you think you're too young to worry about savings, "you just have to take the plunge," Jill Steinberg, managing director and partner at Beacon Pointe Advisors, says.

Saving early gives you a major leg up, especially due to the power of compound interest (that means your interest earns interest). Even with a low interest rate, your money grows over time. Someone who begins saving at 22 is in a much better position than someone who starts saving at 32 and tries to play catch-up.

"The earlier you start, the more financially successful you will be in the long term," Steinberg says.

What if I don't have income to save?

With all of the expenses of college (and navigating life during the pandemic), saving might not seem like a necessary — or feasible — part of budgeting.

But it is.

During the pandemic, a lot of the normal routes for supplemental part-time income for college students (like serving, bartending or retail) haven't been available, so many students might not have money coming in, said Marguerita Cheng, CEO and co-founder of Blue Ocean Global Wealth. But you can still open an online savings account and move some of the money you have in checking into savings. Just make the first move and start saving.

More from College Voices:
Here's what college students need to know about making a budget
Three easy ways for college students to cut expenses
How college students are turning hobbies into side hustles — and extra cash

You also can find some savings by "looking for the slack in your budget," Steinberg says.

Start by cutting down on discretionary spending and do your best to follow the 50/30/20 rule (Put 50% of your after-tax income toward things you need, 30% for items you want and 20% into savings). And if you don't have income, give up a small item and put that money into savings. If you give up getting coffee out for a month and would normally spend $12 on coffee, put that $12 a month into your savings. After a year, it's hit $144 — plus compound interest.

Make saving easy – automate it.

Once you choose a savings account that's right for you, make it automatic, says Sophia Bera, founder of Gen Y Planning. Bera recommends setting up weekly contributions from checking to savings or changing your direct deposit so that a portion of each check goes directly into your savings. This gives you one less thing to think about each month and gives you more security for a rainy day. It also ensures consistency and the more discipline you develop around savings, the better the lifelong skill.

Steinberg agrees: "Pay yourself before you pay everyone else. Make yourself an expense."

Just start saving.

If you do have a source of income, it's OK to start small. Starting is the most important step. If you can't save $100 a month, but you can swing $25 – do it.

Save as much as is reasonable for you depending on your income and expenses.

"Don't focus on the amount, focus on the habit," Cheng says.

When you have a little more wiggle room with your income, make an appointment with yourself to check in, reassess and up your savings. Maybe it's only $5 more. Or maybe it's $20, $50 or $100. Whatever it is – it's savings. And it's growing with compound interest.

If you're on top of your budget and not overspending, Steinberg recommends college students keep around one to two months worth of their income in checking and put everything else in a high yield savings account or a retirement fund.

One mistake college students often make is feeling like they have to "do something" with their money, like spend it or invest it. Students are just building their foundations for life, says Douglas Boneparth, president and founder of Bone Fide Wealth. It's OK to sit and think about what it's going to be used for, or just hang on to cash. It might come in handy transitioning out of school and into the real world.

What I'm doing to get my savings on track:

1. Setting up a savings account.

I set up a free, online high-yield savings account making 0.5% interest. I chose one with a $0 minimum balance, so I wouldn't incur fees if I don't have enough money deposited.

2. Setting up auto-deposit.

I changed my checking account to automatically deposit $25 a month to my savings account.

3. Cutting one discretionary expense out of my budget.

Even though I love my matcha lattes, the habit has gotten expensive! I'm going to switch back to coffee, which will end up saving me around $10 a month.

4. Checking in on my account.

I'm setting a reminder for myself to check in on my savings in a month to see how it's going and if I can increase my savings!

$25 a month at 0.5% isn't going to make me a millionaire overnight. What it's about is starting good savings habits early — the earlier you start saving, the more money you have that will keep growing over time.

Are you trying to get your money game together while you’re in college, too? Email me an update of how it’s going and any questions you have at

We’re in this together!

CNBC's "College Voices" is a series written by CNBC interns from universities across the country about coming of age, getting their college education and launching their careers during these extraordinary times. Amanda Mier is a senior at the University of California, Berkeley, majoring in English. She agreed to document her money journey in a series of articles, Instagram and Tik Tok videos for College Voices. The series is edited by Cindy Perman.

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