College  |  July 19, 2022  |  Ashley Boucher

Saving for College as an Incoming Freshman

What you’ll learn
  • Why you should save for college
  • How much you should save
  • How to find the right savings account

It’s never too soon (or too late, for that matter) to start developing a strong foundation of financial habits and behaviors. This is especially true for high school juniors and seniors who will be headed off to college soon, where they may be expected to manage their own saving and spending.

Why should you save for college?

Seems like a no brainer but that question comes up a lot. Well, as you probably know by now, paying for college means more than financing tuition. In many cases, students need to pay for housing, textbooks, meals, utilities, entertainment, and gas or other transportation costs like rideshares. There’s also the lesser-talked-about necessities like paper towels, trash bags, toiletries, etc. The list can vary depending on whether you’ll be living on or off campus, but either way, your spending can really add up.

After tuition, how much additional money should you save?

According to a 2021 College Board report1, full-time students paid between $18,220–$27,200 a year for out-of-pocket living expenses. This number can vary for each student, based on several factors: Will you be moving back home during the summer? Will you live on or off campus? Will you have a meal plan, or will you be cooking meals at home? Do you pay your own cell phone bill?

The answers to these questions will help determine how much you’ll need to spend each month—and can give you a clearer idea of how much you’ll need to save.

How can you save for college?

When you’re in college, you want to spend your time focused on studies instead of how to make ends meet. To help make sure you’re financially prepared, start thinking about saving and budgeting before you start your freshman year.

Having a plan is half the battle. Here’s where you can start:

  1. Begin with a budget. Maybe you haven’t started thinking about your spending habits yet, but now is a great time to start! When you have a clear picture of your monthly expenses, you’ll understand what you need each month, and how much extra you’ll want to earn or save now to make it happen.

    There are plenty of tools out there, like this monthly budget worksheet, to help get you started. One great way to step up your financial game and learn about managing your money—for free—is YourMoney Pro. There’s also a list of monthly fixed and variable expenses from the Department of Education. This is a good place to start, but don’t forget about the expenses that change from month to month, like getting to and from school during winter break.
  2. Outline your savings goals. Are you hoping to use your savings to cover all your fixed expenses, like your cell phone, car insurance, and rent? Or do you want to cover your variable expenses, like clothing, entertainment, movies, gym memberships, etc.? Or maybe you just want to be able to pay for spring break. Regardless of your specific goals, having an idea of what you’re saving for will help keep you motivated and on track.
  3. Open a bank account (or two). To grow your savings you’ll need a smart, convenient place for your money to grow. If you don’t already have a bank account, now is a good time to open both a checking account and a savings account. Having both can help you categorize your funds, making it less likely to overspend and easier to save.

    Find a bank that's convenient for you. Whether it’s brick and mortar or online, it should have ATMs near your college campus (and your home, ideally), have a low (or no) minimum balance requirement, and offer features like mobile deposit and online bill pay.
  4. Automate your savings. If you have a regular source of income (part-time job, allowance, etc.), it’s a good idea to build automated savings into your routine. Essentially, you’ll be turning your savings account (or money market account) contributions into a monthly expense. 

    If you receive a paycheck, you can allocate a portion of it to be deposited directly into your savings account. This way, it’s money that you don’t have to think about. Before you know it, your savings account will be growing, and your college budget will be taking shape.

What options do you have to save for college?

After you’ve taken those steps to start saving for college, here are some other things you can do:

Use your phone. Did you know a key tool in growing your savings is already in your pocket (or maybe even in your hand) right now? That’s right—your cell phone is a huge asset in making sure you save successfully. By downloading your mobile banking app, you can easily transfer funds into your savings account and monitor your savings progress on a regular basis. There are also a few different mobile-savvy apps to help you save even more. For example, Simple and Qapital are both free apps that let you round up your daily transactions and place the ‘spare change’ into your mobile account. If you spend $2.80 on a coffee, for example, $.20 will go into your account. This is the digital equivalent of emptying your pockets every day and putting the change into a mug or jar.

Consider a part-time job. If you still have a summer or two before college, you might consider a part time job or paid summer internship. The benefits are endless: you’ll start to build your resume, gain experience working with people, and start to earn money! The different types of jobs range from working in a movie theatre, your local ice cream shop or bank, or ‘odds and ends’ gigs like dog walking, babysitting, or yardwork.

Sell your unwanted goods. The benefits of selling some of your unwanted or unnecessary items are endless! You can help others in need, enjoy the clarity a clutter-free space can bring, and potentially earn some cash. But you need to do some prep work.

First, what don’t you need anymore? A good place to find items you can part with might be your closet. What haven’t you worn in a year? What no longer fits? What could help someone else?

Next, find a consignment store and see what they may pay you for! Find out what guidelines they have—often they’re looking for specific brands or price levels, and they want Items that are clean, without holes or tears. If you don’t have a local consignment shop, you could host or join a community yard sale, or post on local Facebook pages geared toward selling.

Turn gifts into savings. If you’re lucky, your graduation may be celebrated by family and friends with a party, or even gifts. And if you’re fortunate enough to receive money for graduating high school, you might be inclined to dream up lavish or ‘fun’ ways to spend it. Instead of quickly spending whatever you receive, consider putting a portion of it away as savings. If it helps, you can even tag it as savings for a particular expense you’ll incur while in school, like textbooks or groceries.

How much should you save for college?

Every dollar saved for college is a dollar you don’t have to spend out of pocket or borrow. That said, it may be unrealistic to think you’ll save the entire amount needed to pay for college—including tuition and fees, room and board, books and supplies, transportation, etc. This can add up, so how much do you need to save?

Start with a goal that’s a little easier to manage. Instead of wondering how much you should save for college, ask yourself how much you can afford to save each month. If you’re already in high school and planning to save, you have from a few months to a few years to divide your goal into months. Let’s say you’re an incoming freshman, or high school senior, and you want to save enough to cover your textbooks. According to the College Board, the average undergraduate will spend about $1,350 a year on books and supplies2. If you’re at the start of your senior year in high school, you have about 12 months or so left to save. In this case, if you set a monthly goal, it’d be about $112 a month.

What are the best accounts for college savings?

There are a ton of options on where to save your money, but look for a few key features and benefits:

  • Get an account with no monthly fees or minimum balance. Other fees to avoid can be for ATM use or for overdrafts. Your goal is to save as much as possible, not to be penalized when you withdraw funds to cover school supplies.
  • Location is key, even for your bank. Check to see which banks have ATMs on campus or near your housing. If you need to access your savings or checking account in a pinch, you don’t want to have to search high and low for a place to do it.
  • If you have a job, see if you can have your paycheck automatically deposited. That way, it’s a “set it and forget it” way to save. Some banks will waive minimums and other fees if you have money directly deposited every month.
  • Almost every bank has an app, so download it! You can do almost every banking task except for getting cash (so make sure there are ATMs available).

There’s a lot written on how to pay for college—with scholarships, grants, and loans. That’s true. But the more you can save now for college, the more you’ll have for all the extras, like books, personal items, clothes, and streaming services. The saving habits you develop now will be an important part of managing money all through your life.


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1. https://professionals.collegeboard.org/higher-ed/financial-aid/living-expense/2020/12-month

2. https://research.collegeboard.org/media/pdf/trends-college-pricing-student-aid-2021.pdf