How to Build Savings as a College Student

Quick Answer

To build savings as a college student, start by opening a high-yield savings account, paying yourself first, setting up automatic transfers and creating a budget.

Student in library holding notebook, with student peers studying at a table in the background.

To lay a strong foundation of savings while you're in college, you can open a high-yield savings account, save before spending and find small ways each month to add to your account. Even if you're only earning a little while studying, it's possible to build an invaluable savings habit and earn a solid amount of interest while you're at it.

Here's how to get started with saving during college.

What Type of Savings Account Is Best for College Students?

You can choose either a traditional savings account at a bank or credit union or a high-yield savings account at a bank, credit union or online bank. The best choice depends on your needs.

If you'd prefer to bank in person than bank online or need to deposit cash regularly, a traditional savings account may work for you. But if, like many students, user-friendly online banking tools are important to you and you'll do most banking tasks on your mobile phone or device, a high-yield savings account with an online bank is a solid option. High-yield accounts offer significantly higher interest rates than traditional savings accounts, letting your money grow faster.

Once you've opened a savings account, here are some ways you can build savings while still in college.

Earn Money Faster

Find High-Yield Savings Accounts

Pay Yourself First

When you pay yourself first, you identify a proportion of earnings you're comfortable saving and set that aside before paying other bills. For example, if you're paid on the first of the month, you'll set up an automatic transfer to your savings account on the second of each month. That way, the money isn't available to spend as readily with a debit card.

An even better option is to ask your employer if you can split your paycheck into multiple accounts so that some income goes to checking and some directly to savings. Getting into this habit now will make it second nature as you get older, ensuring you always have savings for emergencies and long-term goals.

Some banks let you split your savings account into multiple categories or buckets and give them nicknames, like "Spring Break Fund" or "House Down Payment." That might motivate you to send money specifically to those sub-accounts.

Automate Transfers

Setting up automatic transfers from your checking account is the best way to keep your savings account growing. You won't have to set reminders, and you'll feel a thrill as you watch your balance rise. You could set a recurring automatic transfer once a month or each time you receive a paycheck.

If you have a specific goal, like buying a car in two years, break down how much you'll have to save each month to get there. Or plan to save a specific amount each month as a general goal to get used to the practice of saving—even $20 or $50 counts. It's important to choose an amount that will make a meaningful difference to your savings account but won't put you at risk of overdrawing your checking account and falling behind on bills.

Find Ways to Add More Funds

While studying is your priority, working part time will give you the flexibility to earn spending money and save at the same time.

You can take on a work-study job on campus as part of your financial aid package, if you qualify. Or opt for tutoring, proofreading other students' papers, babysitting, pet sitting or selling crafts or art you make in your free time. If working during the school year isn't possible, use the "pay yourself first" concept for summer earnings. Transfer as much as possible as soon as you're paid so you don't have immediate access to the money.

Stretch Every Dollar

When you're conscious about how you spend, you'll have more money available to add to savings. Always ask about student discounts, and use these tips to create a budget that will support your savings habit:

  • Know how much you spend. Take a look at your checking account or credit card statement for the past two to three months. Note some basics, like the total you spent on food, utilities, housing, transportation, entertainment and school supplies. If anything sticks out—such as, "Wow, that's a lot of Uber rides"—note it down.
  • Choose a budgeting method and test it out. Choose a budget plan and see how it suits you. A popular one is the 50/30/20 rule, which splits your spending into needs, wants and savings/debt repayment. First, try to limit spending on "needs" to 50% of your income and see if you can increase your savings as a result. Make changes to your spending based on the expenses audit you did in the first step, but slowly—putting too much pressure on yourself could backfire. Not sure how to track your spending? Try a budgeting app that can do it for you.
  • Cook in big batches. One major way to save money in college and thereafter is to limit spending on meals out. If you have roommates, set aside one day a week to make a few big meals—stew, chili, lasagna or Bolognese sauce, for example—and freeze them. You'll be less likely to turn to takeout for meals other than those you eat at the dining hall.
  • Opt for used over new. This applies to big-ticket purchases like cars and smaller items like furniture, clothes, books, iPhones, laptops and more. Browse options via online marketplaces, email listservs and even fliers at the student union or other public spaces.

Up-Leveling Your Finances During College

Now is an ideal time to build strong financial habits that you'll use for years to come. If you can save money on a college student's tight budget, then you'll be more than able to save for retirement, a house and other goals once you're working full time. In college, the amount you save isn't as important as seeing how possible and empowering it can be.

College is also a good time to start thinking about building credit. A solid savings account combined with a growing credit score can help you when it's time to rent an apartment, buy a car and more. If you haven't started using credit, Experian Go™ can help by establishing a credit profile for you and suggesting ways to begin your credit journey.