This fall, many young people will be leaving home for the first time to begin the challenging and exciting experience that is college life. Some students will do well managing their own money for the first time, and some will struggle to manage their expenses. 

“When I went to college, I was an idiot with my credit cards and money,” says Jill Geroux of Green Bay, Wisconsin. “I had never learned to save or use my money properly. So when I had credit cards for the first time, I was just like, ‘Yay, free money!’” 

Soaring tuition costs coupled with financially unprepared students spell a recipe for financial setbacks. Today, the average American student leaves college with more than $37,000 in debt, including student loans. The total US student debt is at $1.56 trillion, according to data from the Federal Reserve. When it comes time for a young person to leave home and manage money for, perhaps, their first time, these steps can pave the way for a lifetime of financial wellness that also respects people and the planet.  

1. Create a Budget 

Though they sometimes have a negative association with restriction, budgets are your friend, and they’re fairly simple to make. First, identify your income for the year, including paychecks if you have a job, grants, loans, and family contributions. This will give you an idea of how much you have to spend each month, after which you can make a plan to fit your spending needs on groceries, transportation, etc. Whatever is left over can be set aside for future expenses like trips or simple pleasures: a latte every now and then is okay. 

Free apps like Mint and EveryDollar can helpful plan and keep track of income and purchases. 

2. Choose A Green Bank (and Credit Card) from the Start  

“As students start on their financial life it’s a great time to consider having relationships with financial institutions that match their values,” says Morgan Simon, board member of the student activism group, the Responsible Endowments Coalition. “Students can do this by opening accounts in a community bank or credit union.” 

Simon’s message is right in line with Green America’s philosophy. College is an opportune time to start building a green financial foundation. Students can get experience managing their money by taking advantage of customized student accounts offered by community development banks and local credit unions. Common features of these accounts include zero or waived maintenance fees, no minimum balance requirements, overdraft protections, and competitive interest rates. NerdWallet.com offers a list of accounts with these features and students can also search for socially responsible banks in their area at greenamerica.org/GetABetterBank.   

“People often keep their first bank account all their lives,” says Fran Teplitz, Green America’s executive co-director. “So starting college is a good time to make sure you choose one that serves communities, not Wall Street.”

Green credit cards also exist, like Green America’s Platinum Visa credit card which includes a zero percent annual percentage rate for the first year, plus travel benefits and reward points. Students can also search for credit cards provided by community development banks and credit unions at greenamerica.org/GetABetterBank. 

3. Keep Credit Card Debt Low  

It’s important to not make Geroux’s mistake and treat credit cards as an infinite source of cash. High credit balances and missed payments can prolong the time it takes for students to get on their feet after graduation, as poor credit can jeopardize job searches, apartment rentals, and home purchases. 

Establishing a solid record of credit card payments can help students build credit, which will, in turn, make future loans and purchases for a car or apartment a lot easier to secure.   

If you’re about to sign up for a credit card for the first time, remember:   

• Start with a prepaid card to get in the habit of budgeting a finite amount of money. (You can pre-pay with cash from your student loans, a part-time job, or gifts from relatives.) Keep an actual credit card handy in case of emergencies.   
• Take the time for research. Look at spending limits, interest rates, and terms to make the best choices for yourself. You may want to check out credit cards that are designed specifically for college students. They may include benefits such as low interest rates and cash rewards. However, be just as aware of the cons like high fees for late payments.   
• Build credit responsibly. Only spending what you can afford to pay back and paying your card off in full each month will keep fees away and build your credit score. 
  
  Lenard Cohen, owner of the financial planning company CF Services Group  says, “if [students] do have a credit card, they should pay it off every month or avoid using it often. And always pay on time because those late fees rack up like crazy.”  

4. Monitor Your Credit Score

Three major companies provide free annual credit reports: Experian, Equifax, and TransUnion. Get a credit report from all three companies at least once a year to check for errors or identity theft and to get as thorough a review as possible. Free sites like CreditKarma and FreeCreditReport.com give users access to just one of these reports, leaving room for error.

Note: it’s a myth that checking your credit score will lower it—that’s only the case when lenders or credit card issuers inquire about your score, for example when applying for many credit cards at the same time. 

5. Get a Part-Time Job 

Besides the main perk of putting some money in the bank, studies show that part-time jobs have real benefits for students, by helping them build community and sharpen organizational skills, according to the National Center for Education Statistics.

But, the same studies show that working full-time can have the opposite effect on students, especially those coming from lower-income homes who are under greater pressure to work.

So, it makes sense to also take advantage of financial aid, work study awards, and scholarships to help mitigate college costs. Folks who graduated in 2018 left $2.6 billion in federal Pell grants unclaimed. Don’t miss out: learn more about FAFSA requirements at benefits.gov. Forbes magazine also offers a guide to the FAFSA application. 

6. Be discount-obsessed 

It’s important to make time for fun and relaxation, but too much expensive entertainment can blow holes in your budget. Take advantage of free and discounted on-campus events, and use campus fitness centers instead of paying for costly gym memberships. 

It’s common for companies that cater to students, from movie theaters to software programs, to offer discounts in the form of student membership programs. If you’re not sure whether a company has a student discount, it’s always worth asking. That student ID has power, go use it! 

7. Take a class on financial wellness 

Explore what low-cost financial literacy programs your college has in place and reach out to administrators and academic advisors who may have information on community-wide programs that are open to students. Students can also sign up for a free account at CashCourse.org, a project of the National Foundation for Financial Education. CashCourse offers students articles and videos on the how-to’s of budgeting, financial aid and loans, filing taxes, and paying rent.

8. Join Your Campus Sharing Economy

Buy textbooks from your friends. Share a Netflix account. Trade for goods and services among your peers. College campuses are full of people with diverse resources, talents, and emerging side hustles. You can utilize these all by tapping into campus networks through apps like GroupMe, WeChat, and Kik Messenger. The college journey is full of expenses, from clothes and class materials to textbooks and transportation. So, if you want your dollar to go far, go together.

BONUS TIP: Get an SRI Retirement Plan  

Once you’ve landed a full-time gig after graduation, inquire about what socially responsible investment (SRI) retirement plans your employer offers. Unlike conventional retirement plans, those with an SRI focus can help you avoid investing in companies with interests and activities contrary to your green values. Even if it’s not an SRI plan, don’t delay contributions to a retirement plan, it can make a big impact in the long term. Learn more about SRI retirement plans at greenamerica.org/SRIretirement.