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Things I Wish I Knew as a Freshman in College

Welcome to this open letter from a recent college graduate. My goal through this letter is to let you know how you can be a financially responsible college student, and also give you an understanding of the challenges college students could face when it comes to financial literacy.


Student Loans

To give an easy break down of what student loans are, there are two main types of loans: federal loans and private loans. Federal loans are preferable because they don’t need credit history to qualify, and have income-driven repayment plans, and can forgiveness opportunities that private loans don’t. Because of this, most people recommend not taking out a private loan until after maxing out federal aid.

Despite popular belief, most student loans are not “free money.” Like any other loan, you do have to pay it back, and you may have to pay fees and compounding interest on the loan. Many college’s financial aid offices offer Student Loan courses to help continue to educate students and their families on borrowing and paying back student loans. Most of these courses are free and easily accessible.



One of the biggest clichés of college students is that they are “broke.” Though college students aren’t typically making six figures from their part time job, it doesn’t mean you can’t spend in a way that is beneficial to your bottom line, while also having fun in college. With that, I would encourage college students to set a budget, as it is a good way to help practice financial disciplines.

Budgeting, in most cases for a college student, comes down to spending below your means. That means if you make $150 every two weeks, you should not be spending over that. However there are ways to make your budget stretch, like choosing to use your meal plan to eat at the student cafeteria rather than eat at Cook Out for the third time that week. Or, when buying groceries, maybe choosing to by the off brand product rather than the name brand.

For more practical budgeting tips, check out of blog How To Budget Better in 2023.


Credit Cards

For years, I always heard that credit cards were a “bad thing;” but it wasn’t until my senior year of college that I opened a credit card and learned the benefits of building my credit early. For some college students, a credit card can be a hazardous tool, if not managed well. A consumer can swipe their card, and if they don’t repay what they borrowed in full every month, they could fall into a debt trap and potentially ruin their credit score. However, when managed properly, credit cards can be great financial tools to utilize.

Here are things to look for when trying to choose a credit card.

  1. Low Annual Percentage Rate (APR)

When it comes to student cards, typically you’ll find a high APR. This is where college students can rack up a large amount of debt, because they don’t pay their balance in full. If you think you may carry a balance, look for a card with a lower APR to help.

  1. Minimal Fees

Whether it is an annual fee, or account set up fee, or any other number of fees that student cards may charge, look for a card with the least amount of fees. There are a few no-fee cards, and this can help that college budget by not wasting time paying any unnecessary fees.

  1. Rewards

The most common forms of credit card rewards are cash back, points, and airline miles. For a college student, cash back programs may be the most beneficial, as you could use the cash back rewards to pay for textbooks or other school expenses.

Some cards have rewards for spending categories where you could earn more rewards when you swipe your card on groceries, gas, or restaurants. If rewards are important to you, make sure you can earn them on purchases you routinely make. If not, it may be better to look for a card that offers a flat reward rate on everything.


Saving Money

Most college students do not have an excess of money to put into a savings account each month. However, setting aside any amount of money, whether it’s $5 every paycheck, or loose change from purchases, will help in the long run. Putting money aside allows the interest to compound over time and ultimately earn more.


Legacy Credit Union can help in many ways when it comes to understanding financial literacy. Check out our blogs and monthly Life Lessons webinar series for more financial tips and information. Want to start building your credit now? We can help! Click here for more information on our Visa Student Credit Cards.


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