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How to Become a Financially Independent Student?

Before you start reading this article I just want to share some facts about student debt in the USA.

Every 7 in 10 college students in the USA graduate with debt. This means 70% of college graduates are in debt. In fact, after COVID 2019 this percentage has gone up.

An average college debt on a student is $40,000. Overall US college debt stands around $1.5 trillion. To just give you an idea Mortgage debt in the USA stands around $17 trillion.

As a student, you can’t completely get rid of your debt but at least you can try managing it. Once you have a high-paying job you can repay your debt altogether.

In this article:

you will learn how students can become financially independent and live a debt-free happy life after they have finished college.

Take a Job

You are not going to get a high-paying job right after completing your graduation. You have to be practical and take a part-time job that can pay for your basic requirements like electricity and phone bills at least.

You can find a job offline and online both. I started working online as a freelance writer. Content writing is one of the easiest forms of writing.

I wrote articles for websites and blogs from the comfort of my home. I easily earned $500 – $600 each week.

Many of my friends also took up freelance gigs like coding, online tutoring, designing, etc.

You can find such gigs on websites like Fiverr, Upwork, Toptal, etc.

Until you are able to find a dream job keep working as a freelancer and gain some experience. A job is always going to make you financially stable and secure.

Decide Your Budget

After graduation, your earning will determine your lifestyle, how you are going to live. You have to figure out a way to separate all your expenses from your expected take-home salary.

For example, if you are earning $60,000 a year then your take-home salary should be $4500 approx. each month after paying taxes.

You are going to spend on housing, food, medical, travel, etc from your take-home salary. As a rule of thumb, you should not spend more than 40% on housing and groceries. At least 10% should go for paying student loans, another 10% to retirement savings and emergency funds each.

The remaining amount should go to your savings. Build a budget so that you can start saving very early on!

Saving is Important

After setting a budget for expenditure it is important to set aside some funds that can serve as savings. You really don’t know what your future may hold. If you are down with some kind of illness like COVID then your savings can come to your rescue.

The best way to save is to open a savings account.

Anything that you save, even if it is just $10, it is going to help down the line. A savings account also helps you to develop the habit of saving money.

Choose a bank or credit union that offers high-interest rates and low fees. Various banks offer good interest rates for students.

You can also open a certificate of deposit (CD) at a fixed interest rate.

It is never too late to start saving.

Start Paying Back

As soon as you find a job start paying back your loans. There is generally a six-month grace period after graduation that gives you enough time to find a job before you start repaying your debt.

Even though you don’t have to pay for six months, interest continues to accrue making your debt rise. So start repaying your loans as soon as possible.

Usually, it is a 10-year standard repayment plan but you can go for other options like income-based repayment.

If you are on a low budget then go for an income-based repayment plan because you will have to pay a fixed percentage of your income rather than a flat rate.

Always ensure that you can switch between plans if a certain situation arises.

Managing Taxes

Managing taxes could be a daunting task especially if you are doing it on your own. I would suggest you consult a professional tax preparer to do your taxes.

Even if you are a tax filer getting professional help can save you a lot of money than doing your taxes yourself.

If you are a student then you might be able to deduct your student loan from your tax burden. But if you are working then you can qualify for various tax reliefs offered by the government. In both cases, you end up saving a lot of money.

Managing taxes can avoid headaches and live a more financially prudent life.

Maintain Good Credit Score

A credit score determines how quickly you can repay your loans and credit card bills. In the future, you require loans to pay your mortgage, car, business loans, etc.

Bank will only approve a loan to individuals who are able to maintain a healthy credit score. If your credit score is not good then the bank will not sanction a loan or else you will be forced to pay higher interest rates.

To maintain a good credit score you have to have a high-paying job that will enable you to repay your loans. You also have to save money by reducing your expenditures. This will certainly help to improve your credit ratings.

Plan Your Future

Last but not least is planning your future. Start planning at an early age when you are in your mid-20s.

Start saving the day you got your first salary. Create a retirement fund so that you can live your sunset years in great comfort and happiness.

You also have to pay all your debt like student loans, mortgages, car loans, etc on time to avoid any default.

If you plan your future well then you don’t have to ask anybody for the money. Especially if you fall sick or lose your job.


These were a few ways to become financially independent as a student. These tips are not difficult to implement.

You just have to be financially prudent and disciplined to live a happy and tension-free life.