The Student’s Guide to Budgeting in College

College means paying tuition and fees, as well as budgeting for housing, food, and books. Learn how to create a college student budget today.

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by Chinh Ngo

Published on November 22, 2021 · Updated on March 4, 2022

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The Student’s Guide to Budgeting in College


Your spending habits — what you buy and how you choose to pay for those things — impact not only your current financial situation but also your future finances. This includes what types of loans you may qualify for and your ability to meet emergency expenses.

By becoming financially literate, you can create and sustain a college budget that helps you accomplish key goals.

This in-depth guide offers essential tips for putting together a college student budget. You'll learn money-saving strategies and see a sample budget for college students.

Why Is a College Student Budget Important?

According to the College Board, the average debt level of four-year college graduates in 2019-20 who took out student loans was $28,400. Additionally, in a 2021 Sallie Mae report, the average amount of money borrowed through credit cards by students was $1,309.

Altogether, students who borrow money to help pay for college owe around $30,000. Combined with rising interest rates, this amount of debt can take years to pay off. It can also hinder personal growth and limit your professional opportunities.

Fortunately, students can greatly reduce this potential financial strain by learning to budget with careful regard to their needs, limitations, and goals.

What Types of Income and Expenses Do College Students Typically Have?

Here's a brief overview of the various types of income and expenses most college students have:

  • Total Income: Includes any money you arrived at school with (e.g., money from family members and financial aid like grants and loans), any refunds you receive from your financial aid office, and any money you earn from work
  • Monthly Income: Recurring funds that you earn each month from a job or receive from other funding sources
  • Fixed Expenses: Necessities with the same prices every month
  • Variable Expenses: Necessities or wants with prices that vary month to month
  • Emergency Fund: A stash of money put aside to cover any unexpected or emergency situations, such as medical bills; many students keep emergency funds in their savings accounts

How to Budget in College: 4-Step Guide

Follow the steps below to learn how to budget as a college student and save money.

Step 1: Break Down Your Total Income

The first step to making an effective college student budget is breaking down your income. Your income each term may be influenced by three factors, according to the Federal Student Aid Office:

If you accepted more loans, grants, or scholarships than you needed to cover tuition, room and board, and facilities fees, your school's financial aid office should give you a refund for the excess amount, usually in the form of direct deposit or a check.

You can save refunds in your bank account or apply them toward textbooks and other education-related expenses. Check your student bill to make sure everything has been paid for before you spend any refund money.

Step 2: Assess and Categorize Your Expenses

To assess your financial situation, log in to your bank or credit union's website. Here, you can review your spending and earnings over the past month.

Referring to this statement, you can then make a list of all the things you spend money on in a typical month and the average cost of each item. Make sure you categorize these expenses, tagging everything as either a "necessity" or a "want."

For example, a daily cup of coffee from Starbucks would be considered a want, whereas a 30-day supply of a prescription medicine you take would be considered a need.

Step 3: Crunch the Numbers

Now that you've organized your expenses, it's time to crunch the numbers. Start by adding all your expenses together. Then, subtract that number from your monthly income.

If the final number you get is negative, that means that you're spending more money than you make each month. If the number is positive, you have extra money to spend or put toward your savings and emergency fund.

Step 4: Create a College Student Budget

Now that you've calculated all the numbers, look through your expenses to see what items you can adjust or cut from your list.

For instance, if you're spending $50 a month at the movie theater and you're spending far more than you earn, consider cutting back on this "want" to balance your budget. Many people use the 50/30/20 rule, which calls for putting 50% of your total after-tax income toward needs, 30% toward wants, and 20% toward savings and other financial goals.

This step takes the longest, but getting your finances under control is definitely worth the effort.

Sample Budget for a College Student

In this section, we provide a sample budget for a student attending an in-state, four-year university in Georgia. You can use our budgeting worksheet for college students to create your own budget.

The following student's parents cover their cell phone bill, medical expenses, and health insurance (except prescriptions). They also provide a semester allowance. This student doesn't have a savings account or a credit card, shares the expenses of a three-bedroom house near campus, and works part time as a server at a local restaurant.

Income
  Per Month Per Semester Per Academic Year
Job $1,400 $6,300 $12,600
Family Contribution $111 $500 $1,000
Grants/Scholarships $556 $2,500 $5,000
Loans $778 $3,500 $7,000
Savings $0 $0 $0
Misc. Income $33 $150 $300
Total Income $2,878 $12,950 $25,900
Fixed Expenses
  Per Month Per Semester Per Academic Year
Tuition and Fees $1,111 $5,000 $10,000
Rent/Housing $500 $2,250 $4,500
Utilities $200 $900 $1,800
Cable/Internet $35 $158 $315
Laundry $0 $0 $0
Groceries/Meal Plan $150 $675 $1,350
Car Payment $150 $675 $1,350
Car Insurance and Registration $200 $900 $1,800
Gas/Transportation $40 $180 $360
Car Servicing $22 $99 $198
Monthly Parking $0 $0 $0
Credit Card Payments $0 $0 $0
Cell Phone Plan $0 $0 $0
Books and Supplies $44 $200 $400
Prescriptions and Medical Expenses $15 $68 $135
Other $0 $0 $0
Total Fixed Expenses $2,467 $11,105 $22,208
Variable Expenses
  Per Month Per Semester Per Academic Year
Eating Out $50 $225 $450
Entertainment $100 $450 $900
Clothing $50 $225 $450
Cabs/Rideshare $20 $90 $180
Gym/Hobbies $50 $225 $450
Personal Grooming $20 $90 $180
Other $20 $90 $180
Total Variable Expenses $310 $1,395 $2,790
Totals
  Per Month Per Semester Per Academic Year
Total Income $2,878 $12,950 $25,900
Total Expenses $2,777 $12,500 $24,998
Difference (Income – Expenses)* $100 $450 $902

*Students are advised to put any leftover funds toward emergencies.

The learning doesn't need to stop here

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What Tools Can You Use to Create a College Student Budget?

Tracking and managing your expenses through an app, a computer program, or a bank service can simplify the budgeting process and reduce the likelihood of mistakes in calculations.

Microsoft Excel is arguably one of the best tools students can use to learn how to budget in college. This software program offers budgeting templates, including a template specifically for college students. All are free to use and can be saved directly on your computer.

Alternatively, you may prefer Google Sheets, a free web-based spreadsheet application similar to Excel.

Another option is to rely on a money-saving app. Some of the best budgeting apps for college students include Mint, You Need a Budget, and EveryDollar.

Many financial institutions also provide account-holders with budgeting tools that are automatically populated with your balance and spending habits. These tools are usually free to use and integrated with an institution's website or online portal.

Regardless of your preference, you should use some sort of tool to help organize your college budget, especially if you're new to budgeting. Staying organized is key to maintaining a balanced budget.

6 Tips for Saving Money and Budgeting in College

It's never too early to start saving. Here are some tips to help you develop savvy saving habits.

1. Avoid Paying Full Price for Textbooks

Although textbook prices have risen dramatically over the past few years, the amount of money college students spend on these materials has decreased 41% since 2008, according to Inside Higher Ed.

You can save money on textbooks by buying them from other students, renting them, prioritizing e-books over hard copies, and using websites like Amazon, Chegg, AbeBooks, and BookFinder.com.

2. Cook for Yourself

Debt.org reports that the cost of a college meal plan has nearly doubled in the past decade, with students paying around $4,500 over eight months. By buying your own groceries, you can cut food costs and improve your diet with healthy, home-cooked meals.

3. Embrace Communal Living

College allows you to meet diverse people and form long-lasting relationships. On top of these social benefits, you can save money on dorm and off-campus accommodations by living with friends. Sharing an apartment with other people also lets you pool resources like transportation and groceries.

4. Shop at Thrift Stores

Thrift stores offer a convenient and low-cost way to buy clothes, furniture, and small appliances while also promoting sustainable living. Additionally, many thrift stores — including Goodwill — offer student discounts to help you save even more money.

5. Use Student Discounts

To support frugal college students and develop long-lasting consumer relationships, many businesses offer student discounts on their products and services. Websites like RetailMeNot compile comprehensive lists of student discounts on items such as clothing, toiletries, computer software, food, media subscriptions, and airfare.

6. Take Advantage of Campus Resources and Events

To alleviate students' financial pressure and cultivate a sense of community, many colleges and universities provide free public transportation through on-campus shuttles, off-campus buses, and bike rental services.

You can also consult your school's event calendar regularly for details about free food, concerts, movie nights, and networking opportunities.

Frequently Asked Questions About Budgeting in College

What is a good college student budget for the academic year?

College Board data shows that students who spend moderately should prepare a 12-month budget of approximately $27,200. An acceptable lower budget would be around $18,220 per year. This number can act as a guideline, but remember that your budget must ultimately reflect your location, your personal lifestyle, and your individual financial needs.

Students living in urban areas like San Francisco, San Diego, and Honolulu will generally need higher annual budgets for living expenses.

What is a good college student monthly budget?

According to the College Board, the average college student spends approximately $2,270 per month on living expenses. The amount of money you need each month depends on several factors, such as your location, your rent, whether you're splitting the cost with roommates, and so on. Other factors include how much you spend on things like entertainment and going out to eat.

What is a good grocery budget for college students?

EducationData.org reports that college students spend an average of $547 on food each month. This amount includes $341 toward off-campus eating and $206 toward food cooked at home.

How much money you spend on groceries per month will vary depending on where you live and the type of diet you follow. For example, students in Hawaii spent the most on groceries ($430 per month), whereas students in New Hampshire spent the least ($56 per month). Meanwhile, vegan students spent around $200 a month on groceries on average.

The USDA outlines four basic monthly grocery budgets for college students:

  • Thrifty Meal Plan: $187
  • Low-Cost Meal Plan: $239
  • Moderate-Cost Meal Plan: $296
  • Liberal Meal Plan: $317

How much money should a college student have in emergency funds?

A recent survey by the Federal Reserve found that 2 in 5 Americans in 2017 could not afford $400 of unexpected expenses. In general, you should save up enough emergency funds to cover at least one month of expenses. This money can also come in handy after graduation as you search for work or if you decide to relocate.

DISCLAIMER: The information provided on this website does not, and is not intended to, constitute professional financial advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this website should contact a professional advisor before making decisions about financial issues.


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