How to Use Part-Time Income to Survive Your College Years

Your college years can be an exciting time, filled with burgeoning independence, close friendships and new experiences that create lasting memories. But according to the American College Health Association's Fall 2022 National College Health Assessment, nearly half (44.6%) of college students face financial challenges that may affect their mental health.¹

Even if the cost of college tuition is covered through scholarships, grants or parental assistance, you might experience financial stress when it comes to paying for additional college expenses such as food, clothing, entertainment, trips home, textbooks or other materials.

A part-time job can go a long way toward alleviating those money worries, while also giving you an opportunity to manage your own finances and gain valuable skills. Here are some of the reasons why college students should consider part-time employment, and how that income can help you make the most of your postsecondary experience.

Benefits of Having a Part-time Job As a Student

As a student, look for a part-time job with flexible work hours so you can schedule shifts around your classes. These types of jobs may include retail, fast-food or full-service restaurants, tutoring, childcare, banking, deliveries or other service work. Some employers offer staff discounts or free meals, or even tuition assistance, scholarships or textbook grants.² Aside from the pay and perks, advantages of a student part-time job may include:

• • Financial independence: Having your own source of income can reduce your reliance on parents or student loans, and learning how to effectively manage finances can give you a sense of financial responsibility.
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• • Skills development: Juggling work with school can teach you effective time management and organization skills, while the job itself may help you build confidence and form good work habits, which can benefit you both academically and professionally.
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• • Networking opportunities: You'll make new connections outside of your school contacts, expanding your pool of potential friends, mentors and references.
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• • Resume boost: Including part-time work experience on a resume or your LinkedIn profile demonstrates a strong work ethic and a commitment to balancing academics and responsibilities, which can help you when you're searching for full-time work after graduation.
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• • Better grades: It may sound counterintuitive, but research shows that students who hold part-time jobs have better grade point averages than other students, but under one condition: You limit the amount of time you work to 10 to 19 hours per week.³

Create a Budget for Your Part-time Income

One of the best ways to alleviate financial stress is to create a plan for your money (aka a budget) so you know how much you can spend on your various needs and wants. Here's a step-by-step guide to preparing a budget for your part-time income:

• • Assess income and expenses: Calculate your monthly income from your part-time job and identify your essential expenses (rent, utilities, transportation) and discretionary spending (entertainment, dining out).
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• • Prioritize essentials: Allocate a portion of your income to essential expenses first, ensuring you cover your basic needs.
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• • Set savings goals: Determine how much you want to save each month and include that amount as an essential expense. Aim to save at least 20% of your income for emergencies or future expenses.
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• • Track spending: Use budgeting apps or spreadsheets to track your spending, allowing you to find areas where you can cut back and save more effectively.
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• • Adjust as necessary: Review and adjust your budget regularly to accommodate changes in income, expenses and inflation.

Typical Uses for a Student's Part-time Income

How you use your part-time income will depend, in part, on your situation. While high school students typically don't have to worry about paying for groceries or rent, college students may have to cover those essential expenses and others, such as the cost of traveling home during breaks and holidays. Some of the typical uses for a student's part-time income include:

• • School supplies and textbooks: Textbooks and other academic materials can really add up, costing students about $340 to $700 each year.⁴
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• • Transportation: If you have a car, transportation costs can include gas, parking, maintenance and insurance. Otherwise, you may spend a portion of your income on public transit, rideshares, and/or the cost of trains/flights if you're traveling longer distances to and from college.
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• • Groceries, rent, utilities, internet: These are essential expenses for college students who don't live in a prepaid campus residence. If you share accommodations, discuss these expenses with your roommates.
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• • Clothing, phone plan, incidentals: Even high school students may be responsible for paying the cost of these items, if that's the arrangement they have with their parents.
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• • Social activities and entertainment: This includes the cost of sporting events, movies, concerts, take-out food, restaurant meals, drinks and outings with friends.
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• • Savings and investments: Aside from regular college savings, consider setting aside a portion of your part-time income for longer-term goals, such as building an emergency fund or investing in stocks or mutual funds. These 40 tips can help college students find new ways to save.

Where to Deposit Money? Savings Accounts vs. Checking Accounts

For most college students, it makes sense to use both checking and savings accounts. That's because checking accounts provide easy access to funds, making them suitable for day-to-day expenses and managing bills, while savings accounts typically pay higher rates of interest so you can maximize the earnings on your savings. Note that some financial institutions offer student checking accounts, which may come with extra perks such as lower fees or overdraft protection.

Here are the advantages and disadvantages of different types of bank accounts, and how to use them:

 

Type of Account	Advantages	Disadvantages	Good For
Checking Account	Convenient access to funds Easy bill payments Often no or low minimum balance requirements	Limited or no interest earned on funds Temptation to overspend due to easy accessibility	Funds you expect to use for day-to-day spending/banking
High Yield Savings Account	Typically offers a higher interest rate than checking accounts and basic savings accounts Protects funds from everyday spending	May have minimum balance requirements or withdrawal limitations, depending on the financial institution	Savings you may need to access in the near future (e.g., to pay for this year's college tuition) or on short notice (such as an emergency fund)
CD Account	Usually pays more interest than other savings accounts Interest rate is locked-in, so you can accurately predict your interest income over time	Often must leave funds in the account until maturity date (or pay a penalty to withdraw early) If interest rates increase, you're locked in at a lower rate until the CD matures (unless you opt for a bump-up CD)	Savings you can safely set aside for a given period, such as next year's college tuition, a future car purchase or a down payment on a home
Money Market Account	Typically offers a higher rate of interest than checking accounts Allows more transactions than other savings accounts	Typically has a lower rate of interest than other savings accounts Allows fewer transactions than checking accounts	Funds you might need to spend on an occasional basis, but that still earn more interest than they would in a checking account

 

Making It Work

Part-time employment offers students valuable opportunities to gain financial independence, develop essential skills and support their academic journey. By creating a budget, using your earnings wisely and choosing the right bank accounts—like Riverstones Vista Capital 's high yield savings, money market or CD accounts—you can leverage your part-time income to support yourself throughout the academic year, enhance your education and prepare for a successful future.

 

Tamar Satov is a freelance journalist based in Toronto, Canada. Her work has appeared in The Globe and Mail, Today's Parent, BNN Bloomberg, MoneySense, Canadian Living and others.

 

READ MORE: How to Save Money While You're in College—and on a College Budget