I am first-generation. 

I didn’t know what this meant until I was in high school. My teachers and college counselors began to offer me extra advice and opportunities because I am the first person in my family to attend college in the United  States. College readiness struck me in the face in freshman year — it created questions, concerns and anxiousness about my future as a college student. Like any other first-generation student, I dream of going to college because it is the one thing my parents were one-hundred percent set on me completing. But as a first-gen, this process is a daunting game with no instructional manual. 

Amongst the numerous social and academic challenges first-gen students may experience in college, managing their finances is a major one. This article will delve into the world of first-generation students, their budgeting struggles, and strategies for financial empowerment. 

Keep reading to learn more about how to manage your budget in college! 

(Note: All financial resources are linked below this article.)

Meet Sabrina Colon, a first-generation college student and alumni from NYC iSchool, who is wrapping up her second year at New York University. Sabrina’s parents are immigrants who work tirelessly to provide for their family, and they have always encouraged Sabrina to pursue her education.  The moment Sabrina stepped onto NYU’s campus, however, she realized that academic success wasn’t her only challenge — managing her finances was just as crucial and as unsettling. 

Colon is a hard working individual just like her parents; she works several jobs to have a “semi-comfortable lifestyle in college.” Additionally, to counteract the expensive demands of New York City, she has enrolled as a “Co-Op” student, an Undergraduate Cooperative Education program that allows Colon to alternate between academic semesters and full-time paid work in her field of study.  

Colon takes advantage of the working opportunities her university offers to subside her worry about extra expenses outside of school, at least to some extent. She strongly believes in saving her money — she notes that she even has a system in place where she keeps “25% [of her income] and puts away [the other] 75%.” This system has allowed her to overcome unexpected costs without destabilizing her finances. For example, Colon had to pay for a brand new iPad and Macbook that would help with her studies on her own. Now, she allocates some of her earnings into a monthly payment for her devices, still having money left for leisurely activities with friends and family. 

However, catastrophes can be unprecedented and destructive. During her first year at NYU, Sabrina received the call that her family dog had passed away. Not only was it emotionally impactful, but also financially damaging as she had to “take a big chunk from [her] budget to cremate him so [she] could keep him forever with [her].” 

Miguel Rosendo, an alumni of the NYC iSchool and Union College, vividly recalls his first year on Union’s campus. As a first-generation college student, Miguel was filled with excitement, but also had his uncertainties about living away from home. His parents, who are both immigrants from Mexico, had instilled in him the value of education. However, they weren’t able to provide much advice or guidance in a system they were not familiar with, especially when it came to managing money simultaneously. 

Miguel faced the typical college-related financial challenges, from tuition to books and living expenses. But soon, he also found himself encountering unexpected costs that ultimately blindsided him. Basketball games, for one, were a huge part of Union’s campus culture, and Miguel didn’t want to miss out on that school spirit and quality time with his friends. Then there were the spontaneous trips out of state with friends, which everyone else seems to afford effortlessly. The costs of tickets, transportation, and food costs piled up quickly — far beyond what he had anticipated. 

At first, Miguel was unsure on how to budget for these additional expenses. He had a part-time job as a tutor, but he felt as if his “income disappeared as it came.” Without a clear financial plan, he found himself constantly stressed about money. He says, “Not knowing about how to budget in college made me feel overwhelmed and stressed.”

According to a National Association of Student Financial Aid Administration study, 2020’s first-generation college students were “nearly twice as likely to be concerned about paying for the fall semester, with 59% expressing various levels of concern…compared with the 32% of their peers” who are not first-generation. 

Despite these challenges, many first-gen students like Sabrina and Miguel are able to thrive financially. Here are some strategies that can help:

• Create a detailed budget: List all your sources of income, ranging from financial aid to scholarships and part-time jobs. Additionally list your expenses including, housing, food, books and miscellaneous costs. You can use a pen and paper, spreadsheets or budgeting apps to keep track of such expenses. 
• Prioritize expenses: Essential expenses such as tuition, housing, food and health should come first as these are considered “needs.” Look for ways to save money on textbooks by buying used books or renting them from libraries or students who’ve taken the course in the past. A meal plan can also be a more economical option. 
• Seek out scholarships and grants: Many organizations offer scholarships specifically for first-gen students. Apply to as many as possible to reduce the reliance on loans. 
• Work-Study Programs: These programs offer jobs to students with financial need, allowing them to earn money while gaining work experience related to their field of study. 
• Emergency Fund: Having an emergency fund can make a difference when in face of adversity. Aim to set aside a set amount of money each month for unexpected expenses that may arise. 
• Adopt the 50/30/20 rule: This budgeting strategy is categorized into 50% of your income towards your needs, 30% for your wants, and 20% for savings and debt repayment. This rule provides an effective and adaptable guide that can help first-gen students manage their finances, and set them up for financial stability and reduction of stress. 

Paying off student debt 

Many first-generation students come from low-income families who often remain in this income bracket for generations and generations. So, why does this happen? As we know, immigrant families are hard-working people, so there is no doubt their work ethic exists. They have big dreams of owning a house, a car and ultimately achieving financial freedom. Their visions are clear. However, the debt is what keeps many of these students anchored in financial burdens. While they may be the first in their families to graduate from college, ten years later, this debt makes them feel as if they will never be able to escape being of a low-income status. 

Recently, CBC News featured a story in an effort to help younger generations learn how to be debt-free and combat money taboos within the Latinx community. Sofia Bastida, a 24-year-old first-generation Mexican-American created an instagram account, @savingwithsofie. Through this platform, she shares her personal experience of paying off $120,000 in student loans within 26 months all on an income below six figures. 

Bastida, like many other first-gen students, was initially unaware of financial literacy until she accrued significant student loan debt. She took out federal and Parent PLUS loans to attend Drexel University, leaving her with substantial student loan debt. Her $75,000 Parent PLUS loan increased to about $90,000 due to interest accrual while she was in school. Through her research, Bastida discovered the practice of refinancing to lower her interest rate. Bastida realized that quickly paying off her loan would minimize the total interest paid. This motivated her to create a system to pay off her student loan debt within a reasonable timeframe. 

Bastida shares several key lessons: 

• Research loans: Refinancing your student loans is a common practice that can reduce the interest rate of those loans. Her interest rate loans reduced from 7.8% to 4.98%, saving her thousands of dollars. 
• Strategic loan payments: Bastida made at least two loan payments monthly. She’d make the payments immediately after receiving her paychecks to hold herself accountable and avoid unnecessary spending. 
• Budgeting and Savings: Bastida saved money during college by taking accountability of herself in how much she spent, and kept a three-month emergency fund while paying off her debt. 
• Minimize living expenses: Bastida kept her rent under $1,000 by living with roommates — this meant she did not have to pay a full amount on her rent because it was being split amongst multiple people. She also  thrifted her clothes, used public transportation, meal prepped, and opted for free social activities; this  ultimately allowed her to pay off her debt in 26 months. 

Conclusion 

While first-generation college students face significant financial hurdles, there are effective strategies and resources available to assist them in managing their finances. By adopting budgeting techniques like the 50/30/20 rule, seeking out scholarships and building emergency savings, first-gen students can reduce financial stress and focus on their academic and personal growth. The experiences of students like Sabrina and Miguel, and the success stories of alumni like Sofia, serve as inspiration for other first-gen students — it shows that they can also achieve financial stability and thrive in college and beyond. With the right support and tools, these students can transform their financial challenges into opportunities of empowerment and success. 

Once in college, I want to be able to be an example for other first-generation students that it is, in fact, possible to achieve your dreams. No matter your financial or academic background, with hard work, anything is possible.

 I would like to reference the Ted Talk that Andrea Hernandez gave — in this, she says, “First-gen students are resilient students that adapted skills to persevere and trailblaze a new path in college instead of the generic definition of students whose parent(s) did not complete a 4-year college or university degree, regardless of other family member’s level of education.