collage of money, charts, student working and graduating

Financial Tips for Students

Welcome back to school! For today’s tip I would like to explore a few basic tips that will help you start the school year off on the right financial foot.

First, here are a few statistics you should know:

  • 91% of undergraduates have at least one credit card and the average senior graduates with $4100 in credit card debt[1]
  • The average undergraduate takes out $24,000 in federal student loans[2]
  • 7% of students drop out each year due to financial pressures[3], and 20% of student loan borrowers drop out of college each year[4]
  • 1 in 5 bankruptcies are filed by college students[5]
  • 84% of students say they need more education on financial matters[6]

Having worked as a financial counselor for several years on college campuses, I have seen the crushing burden students feel as they come to us after their credit has already been destroyed and they are facing large credit card bills and mounting student loan debts. I have seen seniors or recent graduates break down in tears when they receive their first student loan statement, as they wish they hadn’t used the money to take trips, buy expensive electronics or use for their day-to-day expenses.

Here are a few basic steps that will help you avoid some of these problems:

  1. Learn to budget. Budgeting is a simple process that will help you create a plan for how you want to spend your money. It will help free you from guilt as you buy items you know you can afford and are within your budget.
  2. Control the most common areas of high expenses for college students – eating out, entertainment, clothes and electronics. College should be a time when you have fun with your friends, but you need to make sure you are spending your money wisely and not spending money you don’t have. I recommend students use cash for these areas (except electronics). When the cash is gone, you stop spending.
  3. Use credit cards wisely. Credit cards can be a good way to start your credit history, but I have also seen students destroy their credit histories by the unwise use of credit cards. Don’t charge more than you can pay off each month, and don’t use your card for impulse purchases. Your credit score is like your GPA, the higher it is, the better. The best way to get a high score is to make payments on time and keep your balances low.
  4. Use student loans wisely. Experts suggest not taking out more in student loans than half to one-year’s expected salary after you graduate. If you expect to make $40,000, your student loans should be no more than $20,000-$40,000 total. Recognize that this is money you are going to have to repay eventually.

If you are a student at the University of Missouri, there are several resources available on campus for MU students and we encourage you to take advantage of these:

  • The Office for Financial Success (OFS) The OFS has trained financial counselors who will sit down with you one-on-one and help you develop a spending plan, manage your credit or debt, or help you with any other financial issue. This is a free service for all MU students, faculty and staff.
  • The Personal Financial Planning department offers several courses that your student can take:
    • Financial Planning 1183, Financial Survival, (1 hour online course) explores basic financial topics students need to survive the critical college years.
    • Financial Planning 2183, Personal & Family Finance (3 hour) is the complete guide for a successful financial future.
    • Financial Planning 4483, Financial Success (1 hour online course) covers the basics for those entering the workforce and adult life.

[1] Sallie Mae, “How Undergraduate Students Use Credit Cards: Sallie Mae’s National Study Of Usage Rates and Trends 2009”


[3] Duck9

[4] Gladieux L. & Perna L. (2005). Borrowers who drop out: A neglected aspect of the college student loan trend. The National Center for Public Policy and Higher Education


[6] Sallie Mae. 2009. How Undergraduate Students Use Credit Cards.