Your Guide to Budgeting in College


  • Create and stick to a budget as early as possible, so you have time to get used to living within a strict framework.
  • To develop a realistic budget, assess your financial situation — particularly your monthly income and expenses — and allocate each expenditure to specific categories.
  • Use tools like Mint and Left to Spend to help with budgeting by holding yourself accountable.
  • Take advantage of all the resources at your disposal, including student discounts, free campus events, used textbook sellers, open-source learning materials, and thrift stores.

A Note from BestColleges on Coronavirus and Financial Planning in College

The COVID-19 outbreak has caused rapid and significant changes in students' lives. Campus closures have pushed students to online learning, and life after graduation is uncertain for many.

Saving money and budgeting in college is top of mind for many students, even in the best of times. Our Financial Aid Guide can help you understand and plan your finances in college.

We are also working to provide information and resources to students about the impact of coronavirus on college life. Read our latest Coronavirus Resources for Students.

We encourage students to contact their college's financial aid office for any financial questions related to coronavirus. Many services have moved online as schools work to support students through this challenging time.

Your spending habits — what you buy and how you choose to pay — impact not only your current financial well-being, but also your future. This includes what loans you may qualify for and your ability to meet emergency expenses. By becoming financially literate, you can create and sustain a budget that helps you accomplish important goals.

This guide provides extensive information on how to make a budget. You can also learn about money-saving tips and read answers to frequently asked questions.

Why Does a Budget Matter?

According to CollegeBoard, the average bachelor's degree recipient in 2017-2018 owed $29,000 in student loans. Additionally, a report from the financial research organization Everfi showed that half of American college students juggle two or more credit cards and accumulate about $1,000 of credit card debt.

Therefore, the average college graduate has about $30,000 of debt. This amount, when combined with escalating interest rates, often takes years to pay off and can hinder personal growth and limit professional opportunities. You can greatly reduce this financial strain by budgeting realistically with careful regard to your needs, limitations, and short-term and long-term objectives.

Starting a Budget Early

Pre-college budgeting also allows you to prepare for potential financial hardships you may face while in school and/or after graduation as you search for a full-time job.

Although budgeting may seem daunting, you can bolster your chances of success by tracking everything you buy in a journal, a budget spreadsheet, or a mobile application. This method allows you to analyze your spending habits and cut down on unnecessary purchases. You can also use this information to forecast your expenditures in six months or a year, preparing to meet financial needs as they emerge.

Learn more about saving for college

Income Summary

The first step to understanding your budget is breaking down your income. Your income each semester or quarter may be influenced by three major factors:

  1. How much loan money you qualified for and accepted
  2. How many scholarships and grants you apply towards your tuition and fees
  3. How many hours you work for a work-study or a part-time job

If you accepted more loans, grants, or scholarships than you needed to cover tuition, room and board, and facilities fees, then the financial aid office of your school will issue a refund check.

You can put refunds into your bank account or apply them toward books and other education-related expenses. Check your student bill to make sure everything has been paid for before spending any refund money.

Budgeting Terminology
Total Income This includes the money you arrived at school with, any refunds you receive from your financial aid, and funds from a steady paycheck.
Monthly Income These are recurring funds that you receive each month from your job. The amount varies based on the hours you work.
Fixed Expenses These are necessities that have the same price every month.
Variable Expenses These are necessities or wants with prices that vary month to month.
Emergency Fund Another term for the money you transfer from your checking account to your savings account.
See our guide to evaluating financial aid offers

Creating a Budget

Knowing how much money you earn and spend each month goes a long way towards keeping your finances in order.

The four simple steps described below can help you create your first budget:

Assess your financial situation

First, log on to your bank or credit union's website and review your financial situation over the past month. Make a list of all of the things you spend your money on in a typical month and the average cost of each item.

Categorize your expenses

Next, categorize the list of expenses you created in step one. Tag everything as either a "necessity" or a "want" and then sort everything into these two groups.

Crunch the numbers

Now that you have organized your expenses, it is time to crunch the numbers! Start by adding all of your necessities together and then subtracting that number from your monthly income. This number is your discretionary income.

Create your budget

This is where your budget will take shape. Review the discretionary income number you calculated in step three. If the number you get is negative, that means that you are spending more money than you earn each month. If the number is positive, then you have extra money to spend.

Now that you have everything organized, see what items you can adjust or cut from your list.

For example, if you find that you are spending more money than you earn and are also spending $50/month on movie tickets, then you should consider cutting back on this "want" to balance your budget.

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

Sample Budget

Below is an example budget of a student attending an in-state, four-year, public university in Georgia.

This student's parents still cover their cell phone bill, medical expenses, and insurance (outside of prescriptions). They also provide a semester allowance.

This student does not 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.

Sample College Budget
Per Month Per Semester Per School Year

Income

Job $1,400 $6,300 $12,600
Parent/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

Tuition $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
Medical Prescriptions and Expenses $15 $68 $135
Other $0 $0 $0
Total Fixed Expenses $2,467 $11,105 $22,208

Variable Expenses

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
Total Income $2,878 $12,950 $25,900
Total Expenses $2,777 $12,499 $24,998
Income - Expenses (Emergency) $100 $452 $902

Budgeting Tools

Tracking and managing your expenses through an app, computer program, or bank service can simplify the process and reduce the likelihood of human error. Below, we provide a few tools that you can use to make budgeting simpler.

Microsoft Excel

Excel provides several budgeting templates in its latest edition, including one specifically for college students. All are free to use and can be saved on your computer.

Simple.com

Simple.com works with Bancorp Bank, Member FDIC, to provide customers with a free, insured online checking account and budgeting tools.

Mint

Mint securely connects with your bank account and automatically organizes and categorizes your spending habits. It offers suggestions for ways to cut back on the areas where your spending is the highest.

Left to Spend

Left to Spend is an app for those who want to set a spending allowance and track how much of their budget is left. Users choose a target allowance and can review transaction histories from the past month.

Personal Capital

Personal Capital is a general wealth management app that accounts for any type of financial investment. Students can continue using this app well into their adult life.

YNAB

Short for "You Need a Budget," this app offers a variety of budgeting tools, including a debt repayment interface that helps create a payment schedule based on your financial goals. YNAB is free for the first month.

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

Regardless of your preference, we strongly recommend using some sort of tool to help organize your budget — especially if you are new to budgeting. Staying organized is the key to maintaining a balanced budget.

Tips for Saving in College

It is never too early to start saving. Here are some tips to help you develop savvy saving habits today:

  • Avoid paying full sticker price on textbooks

    Although textbook prices have risen dramatically over the past few years, the amount of money college students actually spend on these materials has decreased by 41% since 2008, according to Inside Higher Ed. You can save money on textbooks by buying them from other students and using websites like Chegg, AbeBooks, and BookFinder.

  • Cook for yourself

    Debt.org reports that the cost of a college meal plan has almost doubled since 2010, with current students paying about $4,500 over eight months. By buying your own groceries, you can cut food costs and improve your diet by cooking healthy meals.

  • 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 dormitory and off-campus accomodations by living communally with friends. Sharing an apartment with other people also lets you pool resources like transportation and groceries.

  • Frequent thrift stores

    Thrift stores provide a way to purchase clothing, furniture, and small appliances affordably, while also promoting sustainable living by eschewing fast fashion. Additionally, many thrift stores — including Goodwill — offer student discounts to help you save even more money.

  • Use student discounts

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

  • Take advantage of campus resources and events

    To alleviate their students' financial pressure and cultivate a sense of community, colleges often provide free public transportation through on-campus shuttles, off-campus buses, and bike rental services. You should consult your school's event calendar regularly for details about free food, concerts, movie nights, and networking opportunities.

More Frequently Asked Questions About Budgeting in College

What is a good budget for college students?

CollegeBoard data show that students who spend moderately should prepare a 12-month budget of approximately $25,000. This number can act as a guideline, but remember that your budget must reflect your personal lifestyle and financial needs. Use the tips in this guide to help reduce your spending.

How much money does a college student need per month?

According to the 12-month budget above, the average college student spends about $2,100 per month on living expenses. The amount of money you need depends on your own budget calculations.

How do you create a college budget?

After evaluating your monthly income and expenditures, create a detailed budget spreadsheet (or use an app) that allows you to categorize each expense. More importantly, you need to carefully track your spending to discern trends over several months. This information helps you locate areas where you can cut spending and allocate funds to a savings account.

How much does the average college student spend on personal expenses?

According to CollegeBoard, the amount of money a student spends on personal/living expenses depends on where they go to school.

How much should a college student have in emergency funds?

A 2018 survey by the Federal Reserve revealed that about 40% of Americans could not afford $400 of unexpected expenses. In general, you should save enough emergency funds to cover at least one month of expenses. This money may also come in handy after graduation as you search for work or if you need to relocate.