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How to ace money management in college.

When it comes to paying for college, you probably think of tuition expenses, housing and your meal plan. But what about everything that happens in between class, dining hall meals and sleeping? From late night pizza to taking your bestie out for a birthday dinner, there may be more expenses you’ll need to cover. There are a few ways to bridge the gap, and we’ve put together a guide to help you figure out how to do that – and do it wisely.

Determine your wants and needs.

When you’re in college, the best use for your money (and time) is on whatever directly contributes to your ultimate goal of graduating and landing your first job. However, it doesn’t hurt to have some fun too. Think of the money you’re putting into college as an investment in yourself.

With that in mind, think about the activities you’d like to participate in and possible additional costs. Unexpected class fees and administrative expenses can pop up, as well as dues for student organizations. But getting involved is a great way to gain leadership experience that will be good for your resumé later. They can also provide real-world application of concepts you study in class. Many groups are campus affiliates of professional organizations, which is invaluable to developing your network.

Then, when it comes to the fun stuff, be realistic about how much you may need each week. Pizza, mani-pedis or a night-out-on-the-town are definite temptations to spend just a little bit of your money on something more fun than a lab fee or membership dues. You have to be honest with yourself, and always try to find the line between practical and extravagant.

Fund the fun.

Once you have a good sense of how active you’re likely to be, think about how much extra cash you may need to have on hand – and whether you’ll rely on savings from your summer job, work a side gig during the school year.

Fortunately, there have never been more opportunities for college students to schedule their own work hours to earn money. If your class schedule doesn’t fit neatly into some of the typical jobs you’d expect to find around campus, consider earning extra money through these “gig economy” services:

  • Ride sharing
  • Running errands
  • Delivering groceries
  • Freelancing skills

You may be able to secure a personal loan from a bank. But be aware that you’ll pay later for what you borrow now. Student loans all carry interest rates, which is how lenders get paid for giving you money. Bigger loan amounts will accrue more interest, so your first homework assignment is to only borrow what you need to minimize the total balance.

Based on how much you plan to borrow or earn, build a budget and stick to it. This will pay off for the rest of your life.

Take an interest in loan interest.

If you borrow money, know that it doesn’t spend the same way as cash. Interest works in your favor when any money sits in a savings account, but the situation reverses once you borrow funds.

For example, let’s say you spend $20 each week splitting pizzas with friends and will be using your loan funds to pay for your share.

Over the typical 30-week academic year, that’s a $600 total cost. If you kept consistent, you could graduate with $2,400 spent on that weekly pizza fix and hopefully a T-shirt for your loyalty.

Except, those pizzas don’t really cost $2,400 – not after the interest. If we assume this loan had a 5% annual interest rate and a standard 10-year repayment window, you’re paying $25 more each month.

By the time you’re through, borrowing $2,400 on pizza will cost $3,055. Once you understand how interest works, knowing the true cost of your purchases will help you make good decisions with your loan dollars.

Cost of pizza each week $20
# of weeks in academic year 30 weeks
Cost of pizza for the year $600
Cost of pizza over 4 years $2,400
Actual cost of pizza w/interest (assumes 5% annual rate;10-year repayment) $3,055

When you enter college, you start on the path of managing your own money. You want to have fun and enjoy your time, but you also want to make sure you make smart decisions that set you up well for the future. By anticipating your expenses, securing funds to fill the gap and being careful about your spending, you’ll be on the right track to successful money management in college.

Commerce Bank offers the Your Future Education Loan® to help you bridge a gap in your college funding. For parents and loved ones, the Their Future Education Loan allows others to help finance your student expenses. Have questions? Give us a call at (800) 666-3910 or email

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