Tuesday, October 26, 2021

How to Budget and Save Money in College: 5 Steps to Financial Success

Creating a college student budget is a great way to sort out your priorities and avoid unnecessary spending that can hurt your financial future.

The major trouble is that college can be seriously expensive. In fact, full-time undergrads can spend up to $51,000 in a single year attending college, according to the National Center for Education Statistics (NCES).

When you’re knee-deep in academic stress, there’s no reason to add money problems to the mix. So here’s everything you need to know about budgeting for your college expenses and money-saving tips to get you started on your journey.

Sound like a big job? Have no fear — we’ve broken this process down into five easy steps.

Creating Your College Student Budget in 5 Steps

When building your college student budget, you’ll go over all of your expenses and consider where you’ll get the money to pay for them. Let’s start with the basics:

1. How Are You Paying for College? 

As a college student, you’ll likely rely on multiple sources to cover your expenses. This can include financial support from parents and relatives, scholarships, student loans, and part-time jobs.

When you start creating your budget, you’ll begin by mapping out all of your available income streams. So grab a pen or open up a new spreadsheet — we’ve got a budget to make!

Talk to Your Parents

A great place to start your budget is a conversation with your parents or guardians about the scope of their financial help. Will they shoulder all the costs or do you need to look for other financing options? Having this discussion will help everyone understand their responsibilities and leaves less room for miscommunication.

Keep in mind, every family has a different financial situation, so the idea that parents will pay for college shouldn’t be assumed. What’s important is that you outline your expectations together so you have a clear picture of how to budget for college.

Factor in Scholarships, Grants, and Loans

Scholarships and grants can cover a large portion of your college expenses. These awards are ideal for funding your education because it’s money you don’t have to pay back later.

Applying for a student loan is another common financial assistance method if you can’t pay for college out of your own pocket. You’ll have various loan options to choose from and repayments can often be delayed until after you graduate or find a job.

Of course, you’ll have to apply for these options and none are guaranteed. That’s why it’s a good idea to apply for your financial aid early so you can factor this amount into your college student budget.

READ MORE: These Are the Cheapest Colleges in the US

Will You Work During College?

Getting a part-time job over the summer or during the school year can help balance out your budget with a steady inflow of cash, but it does come with challenges.

Research from the University of California showed that over half of college students today work. Of these working students, 63 percent report high levels of stress, and 69 percent say they’ve had to miss out on academic opportunities because of conflicting schedules with work.

But if you’re still up for the job, options can be found both on-campus and off. You may be able to luck-out with flexible employment conditions or work-study opportunities, which will allow you to better prioritize your schoolwork.

Consider Your Savings

If you have some savings tucked away, you’ll want to consider whether it’s money you intend to spend during college, or if you’d prefer to squirrel it away for a rainy day.

If, how, and when you spend your savings is up to you. Whatever you decide, spell out your intentions and factor them into your budget.

photo-of-girl-making-college-student-budget
Making a budget as a college student can save you frustration later. Photo: Nataliya Vaitkevich/Pexels

2. Outline Your Expenses

You may think your college student budget will only revolve around academic-related expenses but in reality, living costs quickly ramp up your overall bill. 

Here are common expenses to watch out for to fully determine how much you’ll spend each semester.

College Tuition and Fees

Tuition is likely the most expensive component of your college budget. This is why it’s important for students to review the tuition rates of prospective institutions before applying.

READ MORE: How Much Does College Cost in the US? All You Need to Know

Apart from the cost of tuition, you should also consider the miscellaneous student and activity fees, which can amount to hundreds or thousands of dollars each year. These are mandatory fees often charged by the school to support student organizations or other on-campus activities.

Accommodation

No college student should go without proper housing, whether on-campus or off-campus, so this should be reflected in your budget — and it’s likely going to be your greatest expense after tuition.

Remember to factor in your utilities to this amount. If you decide to live off-campus, in many cases, you’ll have bills for electricity, gas, and internet.

Food

As many people will agree, food is among the greatest pleasures that life has to offer! People who are 18 years of age spend an average of $288 a month on food, according to the US Department of Agriculture Official Food Plan.

Your own budget should take into consideration your personal eating preferences. Whether you tend to eat out or stay in and cook can make a big difference in the amount you’ll spend.

Textbooks and Supplies

Textbooks and other course materials are necessary for your education but they can come with a hefty price tag. The College Board released a pricing report that estimated the cost of books and supplies to be around $1,240 per year for public or private college students living on campus.

While the amount may sound impossibly high, it does take into consideration the costs of other materials you’ll need, such as a laptop, notebooks, and printing services. 

When calculating this amount into your college student budget, you may also want to factor in your major. Students studying in the sciences typically spend more on textbooks and lab fees, while humanities students can typically find more free resources online or in libraries.

Table with study material such as a tablet, phone, and notebook
The cost of study materials can add up fast. Photo: Corepics VOF/Shutterstock

Transportation Costs

Transportation is one of those sneaky costs that can add up before you realize it, particularly if you’re using your personal vehicle. A car will need fuel, insurance, maintenance, and in many cases, parking.

Taking public transportation can be easier on the wallet since students usually get to enjoy reduced fares. Ride-sharing apps are another option but keep in mind that over time, these quick lifts can make a significant dent in your college budget.

If it’s practical where you live, you could consider walking or cycling to spare the expense. Don’t forget to check if your college offers free or affordable transportation services like on-campus shuttles and bike rentals.

Leisure 

A good college student budget should have room for social activities to give you a break from all the studying. Your college years can arguably be some of the best, so don’t be afraid to enjoy them. You could save for an occasional fancy meal in town or go to the movies with friends.

Extras

This is the place in your budget to jot down all of the other expenses you anticipate while you’re in college. Consider whether you’ll have a gym membership or any subscription services, or if you need to set aside a portion of money for clothes or household items.

Be realistic about how you spend money and factor in those monthly estimates.

Emergency Funds

What’s this? You’ve paid for all your monthly expenses and luxuries but still have money to spare? There’s no better way to handle that extra cash than to set up an emergency fund.

This money can serve as a financial buffer to help you get by without having to rely on credit cards or additional loans. You just determine an amount of money to set aside and use it to pay for unexpected expenses such as hospital bills, unemployment, or loan repayment if left unused.

infographic-on-how-to-make-college-student-budget
A clear budget can give you a top-down view of all of your income and expenses. Graphic: The College Post

3. Track Your Spending Habits

Once you’ve constructed a good outline of your expenses, the next step is to track your actual spending. This will give you a better handle on where your money goes and enable you to make the right adjustments so you can save cash. 

Digital applications can help you monitor your consumption and goals. Don’t be too hard on yourself if you realize you’ve spent too much by the end of the month, just aim to adjust your spending accordingly.

Examples of free resources you can use are Simple.com, Mint, and Personal Capital.

4. Identify Areas to Cut Costs

With your funding, expenses, and spending habits determined, it’s time for the real work to begin. Take a good hard look at where your money is going and see where you can tighten the purse strings.

Are you paying for subscription services you rarely use? Can you cut back on the amount of takeout you’re ordering? Perhaps you could walk or bike instead of driving, or save trips to the coffee shop for special occasions.

There won’t be as much wiggle room in inevitable costs like tuition and housing, but there are most likely other areas where you can cut back. Don’t be too hard on yourself if you realize you’ve spent too much by the end of the month, just aim to adjust your spending accordingly.

5. Consider Your Life After College

So far, everything you’ve considered in the budgeting process has been preparing you for a successful student life. But what about after graduation?

Getting set up for long-term financial success is all about establishing goals now. Do you want to come out of college debt-free? Or be able to afford the latest iPhone in four years? Whatever it is you’ve determined you want for yourself after college, note that in the budget so you can make it a reality.

At the end of the month, if you have money left over in your budget (hooray!), having a savings goal in mind may help you resist shelling out that cash at your favorite local dive bar.

You’ll know you’re putting the money toward starting your own business, making a down payment on a house, or the epic trip you’ve been daydreaming of during lectures. It may not have the same immediate satisfaction, but you’ll thank yourself later.

College Budget Example

To give you a picture of what a college budget can look like, here’s a basic example. In your own version, you may want to break it down into more specific categories and adapt it to your personal spending habits.

Funding/Income Per Semester ($) Per Month ($) Annual Total ($)
Family Assistance 100 1,200
Financial Aid 3,000 6,000
Job-Related Income 1,500 18,000
Total 25,200
Expenses Per Semester ($) Per Month ($) Annual Total ($)
Tuition and Fees 5,000 10,000
Housing and Utilities 650 7,800
Textbooks and Supplies 600 1,200
Transportation 75 900
Food 200 2,400
Leisure 50 600
Extras 50 600
Emergency Fund 500
Total 23,800
Net Position +1,400

Best Budgeting Methods for Students

Okay, so you’ve flushed out the details of your budget. You know how much money you need to cover all your expenses, and you have a pretty good idea where you’re going to get it. So how do you actually manage the money?

It doesn’t do much good to have a beautifully organized budget if all of your dollar bills are blowing around your dorm room. You might need a strategy for holding onto that money and managing how it’s coming in and going out. Fortunately, financial experts have spelled out a few tried and true tricks that work great for college students.

Envelope System

If you tend to have a lot of cash on hand (looking at you, servers and bartenders) and you have trouble sticking to your college student budget, the envelope method might be just the ticket. You’re dealing with actual cash and envelopes, which is ideal for those who prefer a more tangible approach to their financing.

You’ll have envelopes designated to your various monthly expenses, with separate amounts of money in each. This way, if you notice the $150 you have set aside for groceries getting thin after the second week of the month, you can adjust your shopping habits so you don’t spend the whole last week of the month eating ramen.

Priority-Based Budgeting

Priority-based budgeting is all about weighing the importance of your expenses. While in college, your greatest priorities will likely be some combination of shelter, food, and tuition. Each month, you’ll want to make sure you’re able to cover these costs before anything else.

After the essentials are covered, your priorities will be unique to you. Take the time to break down your expenses and determine how much value you want to place on each. 

Maybe you could settle for less takeout each month but you can’t live without your Spotify subscription. Rank the importance of your spending habits so if money gets tight, you already know where your priorities lie.

Zero-Based Budgeting

If you want to make your money work for you, you may need to give it a job. In the zero-based strategy, every dollar is assigned to an expense or savings goal. This helps you track where all of your money goes, without anything slipping through the cracks.

It means sticking to your budget completely and developing a plan for any dollar that comes your way. Any spending must be justified and you should know what value it brings. This eliminates spending on a whim. 

For example, if you have $10 left over at the end of the month in your transportation budget, in zero-based budgeting, rather than running to the nearest ice cream shop, you move it over to the loan repayment fund, or wherever you’ve previously designated the money to go. (Don’t be too discouraged; the ice cream could also be fine, as long as it’s been previously designated in the strategy).

Glass jars with dollars and text: house,car, travel, education
With zero-based budgeting, every dollar has an assigned saving goal. Photo: smile23/Shutterstock

Ultimately, you’ll need to find a budgeting method that’s right for you. So try out a few different techniques until you land on something that feels natural. In the end, it should make your life simpler, not more complicated.

Tips for Saving Money in College

Saving money can be difficult, especially if you don’t know where to start. Luckily, there are plenty of ways to tighten up that college student budget and take advantage of all the resources within your reach.

Spare Expensive Tuition by Studying at a Local College

Choosing a public college within your state can reduce expenses since residents qualify for in-state tuition, and out-of-state rates are significantly more expensive. This also means that students can opt to live at home to cut back on housing and utility costs.

READ MORE: Is Community College Free? In These States, Yes

Live With Friends

Nobody likes paying rent, but to save a bit of money, you can opt for off-campus accommodations instead of college dormitories since they’re usually cheaper. You can also round up some roommates to help lower your rent and utilities, and you may even be able to share costs for expenses such as food and transportation. 

Cut Costs in the Kitchen

Any college town comes equipped with its fair share of student-friendly eateries. Still, it’s typically easier on your wallet if you cook at home. To save on costs, consider weekly meal plans instead of take-out and arrange your grocery trips with a roommate so you can split basic items like milk, bread, or cereal.

For coffee fanatics, you could avoid burning through your cash by becoming your own barista! With simple equipment like a French press, coffee percolator, or frothing wand, you can learn and enjoy your favorite drinks at home instead of buying from a coffee shop every morning.

Another thing you can check is whether your campus has free pizza nights or food giveaways — who doesn’t love free food?

Boost Your College Budget With Student Discounts

Often, local establishments will offer generous student discounts for various products and services, including food, clothing, and cinema tickets. All you need to do is bring your student ID to maximize these offerings.

You can also find online services such as music and movie streaming subscriptions that offer discounts if you share your school email address. Even expenses such as public transportation, car insurance, computer software, and cell phones may offer discounted rates with proof of your college enrollment.

Save Money With Secondhand Textbooks

In many cases, required course materials remain unchanged for many academic years. You can opt for secondhand copies instead of purchasing new textbooks to save yourself a few hundred dollars.

You can buy used books from fellow students or search local bookstores and websites like Facebook Marketplace, Chegg, AbeBooks, BookFinder, and eCampus.com. Some students prefer to buy e-textbooks through Amazon, OpenStax, or Barnes and Noble.

READ MORE: How to Find Cheap College Textbooks: The Ultimate Guide

If you’re looking for another option, your campus library is the place to go. You can check out books for free or sit at the library until you finish studying for a test or writing your paper. They often have free printing services and Wi-Fi to give you a comfortable learning experience. 

Earn Cash by Selling Old Textbooks

In the same way, you can gain a few bucks and more storage space if you let go of books you don’t need. You can sell them online or in a campus bookstore. The books should be in good condition so protect them with book covers and consider writing your notes on separate paper. 

Manage Your Money With Responsible Credit Card Use

Credit cards can be useful to get you out of a financial pinch but they must be handled responsibly. It’s best to pay credit card bills on time, especially since you may also have your student debt to worry about.

Establish your own guidelines to avoid overspending, such as only using the credit card for emergencies and applying a limit to the amount you can use.

Find Free Leisure Activities

Your college campus can be a great source of fun since it offers leisure activities that come at no charge. Check your school’s event calendar to see if there are free concerts, movie nights, and networking opportunities coming up.

Many college campuses have recreation centers, swimming pools, parks, and indoor gyms that you can get the most out of. You might already be paying for them through miscellaneous fees so get your money’s worth!


Going to school is expensive but creating the right college student budget will be your way to face that challenge head-on. If you learn how to manage your expenses, live within your means, and save money, your financial future will look as bright as your professional one. Good luck!

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