A new report from Sallie Mae indicates that college students are eager to learn more about financing their lives.

According to the report, 38% of college students want to learn more about savings strategies and 33% want more information on student payment options — a promising outlook for the future borrowers of society.

The monetary habits students form early on are the stepping stones to how they’ll understand and treat their finances in the future, making financial literacy one of the most important factors in a young person’s life.

To provide education around the topic, certified financial planners and recent graduates weigh in on what college students need to know, plan for and practice before graduation.

Start building credit in college

Whether or not you have a good credit score — the three-digit number that credit bureaus use to determine your creditworthiness — is based on the financial information found in your credit report. The most common credit scoring system is by FICO, the Fair Isaac Corporation.

Sallie Mae’s report found that two in five college students don’t know their FICO® Score or don’t have one. Yet knowing your score and working to improve it is key to future financial success.

“Credit is an intangible resume that you share with creditors and lenders that reveals how much experience you have, how responsible you are and your ability to manage money,” says John C. Pak, financial planner at Otium Advisory Group.

According to Pak, students should begin to build their credit as early as possible in order to take advantage of optimal borrowing rates and limits later on.

Consider a student credit card

Student loans are a way in which college students can build credit, but if they don’t have a need for them, a starter or student credit card is another great option.

Pak recommends cards with no annual fees, low interest rates and high cash back percentages on what matters to most students  — food and gas — such as the Discover it® Student chrome or Discover it® Student Cash Back.

With the Student chrome, you’ll earn 2% cash back on up to $1,000 per quarter on gas station and restaurant purchases combined, then 1% thereafter. The Student Cash Back offers 5% cash back on rotating bonus categories (up to $1,500 per quarter) like gas stations, grocery stores and Amazon.com, then 1% thereafter, however, you must activate the bonus categories each quarter.

If you choose to apply for a student credit card, focus on only spending what you can pay back each month. Kathryn Mancewicz, a 2015 college graduate, advises paying off your credit card bill each month in order to prevent credit card debt on top of any student loans.

“I had a student credit card in college with a $600 limit. That along with a car loan that my mom cosigned and I then paid off helped me to build up my credit score to over 700 before I even graduated. Now I have never had a problem getting approved for any other loan I may have needed or wanted to take out since,” says Mancewicz.

If you aren’t quite ready for a credit card, a second option is to become an authorized user on a parent’s card.

“I hit a wall where I was being rejected for housing because I had no credit history, and I was fortunate enough to have a father who essentially lent me his good credit by allowing me to be an authorized user for his card,” says Rochelle Burnside, 2019 graduate of Brigham Young University.

Create a budget

In addition to building credit throughout college, having and following a budget is key to spending within your means and establishing savings.

As a 2018 college graduate, Tess Thompson recommends saving up over school breaks and vacations to be able to afford purchases throughout each semester.

“Figure out how much you have saved and then divide that over how many months you will need it to last. Then, break it up into how much you can spend weekly and even daily,” says Thompson.

Bankrate’s Student Budget Calculator allows you to build a budget of your own, with categories like school expenses, groceries, savings and loan payments. If you’re interested in mobile budgeting options, try a free budget tracker app like Mint.

The Mint app connects to your bank account and allows you to build a personalized budget based on your spending habits and necessary payments. You can also track your bills and credit card balances.

“Starting a budget in college will help you establish a good, lifelong habit early on. When you get used to budgeting on next to nothing, you won’t be the type to start blowing all your money as soon as you get your first real job,” Mancewicz says.

Build up savings prior to graduation

Before you turn the tassel, have a savings built up to help make your transition from college to the real world a smoother process.

Patrick Logue, financial advisor and owner of Prudent Financial Planning, suggests students have at least six months worth of expenses in an emergency fund. A solid amount of money squared away ensures that you’ll have enough to live on should you not find a job right away.

“If I’d been able, I probably would have liked to save $4,000 for a deposit, application fee and first month’s rent for an apartment, as well as moving fees and living expenses while I waited for my salary to kick in,” says Burnside.

Part-time employment

Working a part-time job during college is both a constructive use of free time and a means of building savings during college. In fact, an average of 70 to 80 percent of students is employed according to 2019 survey by NASPA–Student Affairs Administrators in Higher Education.

Pam J. Horack, financial advisor at Pathfinder Planning LLC, says the two most important factors for students beginning their financial life is having a part-time job and understanding accountability.

“If you don’t have any income except the ‘Bank of Mom and Dad,’ the concept of budgeting is irrelevant. Students don’t have anything at risk, so the money is meaningless,” says Pam.

Part-time jobs in college not only allow you to build savings but also give you more control over your finances. Specifically, finding a job on your college campus can cut down on transportation costs to and from the job and potentially offer student discounts.

“It’s not easy to save when several thousand dollars are committed to tuition each semester, but $1 is better than $0. Start a job specifically intended for squirreling money away, like driving for Uber or contributing class notes,” says Brandon Kazimer, a 2015 graduate of Western Illinois University.

The last word

When it comes to budgeting, building savings and establishing credit, start as early as possible.

Try a student credit card that will help you earn rewards for everyday purchases like food and gas. Get jump-started on a budget that takes into account all of your daily, weekly and monthly wants and needs. Lastly, try and have at least six months of expenses saved to ensure a smooth transition from college classes to the workforce.

The earlier you start, the more prepared you’ll be when it comes time to graduate. You might regret not starting early enough, but you won’t regret putting in the work for a financially stable future.