This post is the third in a series about developing good habits with money.

In the first two posts of this series we discussed reducing your reliance on a credit card and how to begin saving regularly.

The next step for college students is to manage your spending while increasing your savings. Even in college, you don’t want to get in the habit of relying on a month-to-month paycheck to pay your bills. That’s why managing savings is one of the most difficult things for college students.

You have daily expenses, bills to pay each month, and loans looming on the horizon. Those seem like priorities that you can’t forgo. But the fact remains: starting to save money earlier is better for your future. So how do you begin?

Develop a habit.

Good Habits: Make your money work for you; only spend what you have already saved.
What does this mean?

There’s a little tip that I read from a personal finance blog ( called the Multiply-by-25 rule. The story comes from personal finance journalist Rob Bennett’s entry How To Start Saving Money. Bennett says that the idea of the rule is to, “diminish your reliance on a paycheck.”
Bennett’s post on the Multiply-by-25 rule gives great insight into the saving process. It’s a rule that college students in particular can take to heart.

The Multiply-by-25 Rule: Multiply any expense by 25; that number is what you need to have in savings in order to afford the expense. Why? The dollar amount in your savings account will earn interest over time. Multiplying an expense by 25 will ensure that the interest you make from your savings will cover that expense.

Bennett uses the example of magazine subscriptions to illustrate his point: to be able to afford a $40 per year magazine subscription, you’ll nee to have $1000 in savings. The interested you earn on that savings will cover the cost of the magazine subscription.

The scale of the rule is daunting. But Bennett addresses the issues in writing, “Telling someone struggling to save her first dollar that she needs to save $1 million or $2 million is like telling her that she needs to learn how to fly to the moon.”

Agreed. That is scary. But the goal of smart personal finance is developing good habits.

So where do you start? Begin by giving yourself a gift each month: put away a certain percentage of your paycheck before you pay any bills. Of course you’ll need to do some research on what is the best savings account for you. But once you start saving, that money can start covering your costs, and you won’t have to rely on a month-to-month paycheck.

Forming the Perfect Team

In the end savings is a team effort!

If you want to effectively save then you’re going to need a great coach. And when I say coach I mean bank. Yes, your bank is a vital player on team you, so make sure to do your research and find I solid team member.

I’ve selected some of the best banks for you to consider. Start your search with these, but don’t stop with the banks listed below. Exploring numerous options will only increase your chances of finding the perfect teammate.

I hope you enjoyed this series on forming good habits!

This article was a collaboration between Thomas Samph and Kyle Espinola.  Thomas is a recent Graduate of Boston University and Kyle is a senior at the University of California, Santa Barbara. Both Thomas and Kyle work for, an unbiased data-driven comparison designed to help you find information of anything from New York City Property to Industry Salaries.