Budgeting For College Students – The Student’s Guide 

Save Money in College

No one wants to start budgeting as a college student. College should be about having fun, meeting new people, enjoying new things, and studying (at least a little). However, you need to understand that budgeting for college students is fundamental.

I felt excited and nervous when I was off to university for my bachelor's degree. I wanted to be as independent of my parents as possible hence I was always working in the summer and during term time. To ensure I had enough money for rent, course materials, and all the experiences during university, I had to budget in college to avoid asking for money.

Going off to university is an experience that, for many, will involve being free and independent from their parents for the first time in their life. Nevertheless, the money topic cannot be ignored since you will need money to enjoy your college experience. So let's find out why is budgeting for college students so important and why you should start it now.

Why Is It Important To Budget In College?

Budgeting in college is a superb way to avoid debt and improve your credit score for the future. Having a budget gives you control over your money, helps you save, ensures you get out of debt, and stops you from overspending.

Why is it important to budget in college

It Makes You Have Control Over Your Money

When you start to budget, you will gain all the insights into your finances, including when the money is coming in and out. Once you understand that, you can make informed decisions and gain control over your finances to help meet your financial goals. One less thing to worry about during university? Yes, please!

It Helps You To Save Money

When you have your spending under control, a personal budget can help you save more. Once you set a budget, you need to stick to it. For example, when you have your budget in college under control, it will enable you to save enough to perhaps go with your friends to Italy over the summer.

This only happens because you have been in control over term-time to what happened with your money and thus have been able to put money aside for those purposes.

It Stops You From Overspending

If you don't think about a purchase before making it, you might end up overspending on something you don't need. You can quite quickly tell if you have overspent in a period if you have instant noodles for dinner just a few weeks after you had steak and chips in a restaurant!

Budgeting in college ensures you have a plan of what you will do with the money during term time and don't end up in financial difficulty at any point between your student loan payments. After all, you can't spend money you don't have if you stick with a budget.

It Ensures You Don't Get Into Unnecessary Debt

Students are surrounded by debt traps. Most opt-in for student loans to help with the cost of living and/or tuition fees. What budgeting can do is help you to stretch this money and not to have to borrow more.

Other debt woes might stem from credit cards, overdrafts – a usually standard part of a student bank account, and more sophisticated private student loan companies. For some lucky ones, there is also a bank of mom and dad. However, all debt has to be repaid, and banks will charge you for using these facilities.

This means that you will be giving away a portion of your money to the finance provider for the ability to use his money – but you could avoid that. Paying off student debt can sometimes take years; thus, preventing a portion of it can save you thousands later.

How To Budget In College?

To start budgeting your money during college, you must add up all your income and expenses, decide on your financial goals, learn about different budgeting methods and pick one to implement. Then, you use the right budget tools, implement the chosen budgeting method, keep track of the budget, evaluate it, readjust it, and try it again.

how to start budgeting in college

Just check all the steps on how to start budgeting in college below.

1 – Add Up All Your Income

Knowing first where all of your income is coming from will ensure you will know exactly how much money you are going to have available next month. 

A few examples of sources of income:

  • Student loan 
  • Salary coming from a part-time job 
  • Bursaries for students 
  • Money from family/parents 
  • Part of the savings allocated for a particular period from your summer job 
  • Income from investment 
  • Any side gigs 
  • Selling something
Start a Budget in college by adding your income

If you are receiving a student loan, it is essential to remember that this will usually come in a few larger amounts rather than monthly installments. This will require you to be extremely careful not to estimate incorrectly for different periods in between payments and put extra pressure to manage more considerable sums of money.

If you end up working a part-time job at college, the employer will deduct the income tax and national insurance from your pay if you exceed the thresholds. You might want to use the free tool on the IRS website to determine precisely what deductions you can expect. However, if you have any questions, it would be better to speak with a tax professional.

2 – Add Up All Your Expenses

When you know exactly how much money you will receive, you need to understand where the money will be spent. Usually, this is done by checking your last three months of expenses to be realistic with how much money you spend monthly.

As a new university student, this will need to be an approximate figure that you research on the internet, or you can ask around the current students. Universities and student unions might also help by giving rough top-level figures on how much you will need per month.

Start a Budget in college by adding your expenses

A few examples of expenses you might be expecting at college are:

  • Rent (usually includes the bills if you are living in student accommodation)
  • Utility bills, if not already covered in your rent (Water, Gas, Electricity) 
  • Groceries 
  • Course materials (textbooks, stationery, any specialist equipment) 
  • Transportation 
  • Student Insurances 
  • Any Loans 
  • Medications 
  • Household Products
  • Holidays 
  • Entertainment Subscriptions (Netflix, Spotify, Amazon Prime, etc.)
  • Shopping 
  • Dates
  • Dining out 
  • Parties
  • Memberships (gyms, clubs, societies, professional organizations)
  • Hobbies

When budgeting in college, it is vital to distinguish between what is necessary and unnecessary spending. When planning your expenses, you can think of things you might be able to withhold or are duplicate, like Apple Music and Spotify subscriptions.

Going to university and living on your own is not cheap. It might shock some how much money you will spend every month, but you should remember this as an opportunity to cut some costs and improve your financial life.

Remember that some months have irregular expenses, like birthdays, holidays, events, or big nights out for the end of term.

3 – Determine Your Financial Goals

By now, you know how much money you receive and how much you will spend monthly. You know your financial situation, and you can set financial goals.

budgeting in college helps you achieve your financial goals

Without realistic financial goals, budgeting is worth it since you will not have the right motivation to keep moving forward and follow the budget you set at the beginning of the month or the period.

Of course, those financial goals can differ at college vs. later on in life – and that is completely fine. However, you should know what you are working towards and, importantly, the consequences that might arise if you do not follow it. 

Examples of financial goals for students at college can include:

  • Paying debt 
  • Starting to build a credit history 
  • Paying for your studies
  • Saving for holidays with friends 
  • Saving for other activities that you have planned to do with friends 
  • Saving for a gap year after finishing college 
  • Making money from a summer job last for the whole year 

Your financial goals need to be specific and have a time frame. For example, you cannot only say that you want to save money to go on holiday with your friends. Your financial goal needs to be something like, “I want to save $1,000 in nine months to go to Italy with my friends”.

When you set your financial goals, you can choose the proper budgeting method for your needs and adjust it to ensure you achieve them. You will know exactly how much money you can put aside to accomplish your goals. Financial goals also increase your motivation to stick with your budget.

4 – Learn About Different Budgeting Methods

Now it's time for you to learn the different budgeting methods and choose the one you think is the most suitable for your needs and financial goals.

The 50/30/20 rule budget is the most popular one since you allocate 50% to your needs, 30% to your wants, and you save 20% of the money. When it comes to budgeting for college students, it's a great way to start, especially if you have never budgeted before.

However, in case it's not suitable for you, learn about different budgeting types like one of the following:

The most important thing is that you read and learn about all the different budgeting types available to make the best judgment when picking the right one. Remember that everyone's budget is distinct, so what is suitable for me may not be for you and vice versa.

When you are a student, your situation is different. Usually, with limited and infrequent income streams, you might find budgeting in university a bit trickier to adapt than in life later on.

What is essential for a college student is the time frame for any budgeting method. Traditional budgeting is a monthly exercise, but you might need a budget aligned with your student loan payments. If you receive the money every three months, you split that amount by three and use that value as your monthly budget income.

5 – Pick A Budgeting Method

After you have learned the different types of budgets you can implement, it's time to choose one and stick with it to see if it works. Remember that your budget needs to cover all your income and expenses, including any bills, savings, etc.

For example, don't choose the 60/30/10 rule budget when in college if you know it's impossible to save 60% of your income. Instead, always pick the best one you can implement according to your student's needs. Then, you can always change next month to a different one if that doesn't work.

During your time at university, there might be a lot of opportunities to not stick to what you have initially planned for. For example, a spontaneous night out which ends up hurting your wallet as you buy everyone a round or an expensive takeaway as everyone is getting one.

6 – Choose The Right Budget Tool

The next step is deciding on the logistical part and what tool you prefer when creating your budget. For example, some people like to use an Excel spreadsheet, others use pen and paper with a template ready, and others prefer a more technological approach with a budgeting app.

Budgeting Tools to start a budget

Excel Spreadsheet

Excel is a program I work with daily: for my websites, my job, and personal finances because it's easier to make adjustments and check any information you need quickly. The program is usually available under your college subscription package – reach out to library staff or student union for help.

Having an Excel spreadsheet helps you check how much income you have left for the month, how much you have spent, how much you will allocate to your savings account next month, etc. This way, you properly budget your money. Learn how to make a budget in Excel.

If you find Excel too complicated, you can purchase spreadsheet templates with formulas where you just put the numbers and automatically get everything done for you. If not, you can always try the following budgeting tool.

Printable Budgeting Templates

Most people prefer to budget with paper and a pen, so having a suitable printable budgeting template to help you organize and have a quick look at your finances, is the best option. It can also be preferred for students who prefer taking their notes on paper rather than iPad.

A printable budgeting template will help you keep on track and manage the details of your budget so you know how much money you need to allocate to each category and how to do it.

Budgeting Apps

If you are into technology and love to do everything digitally, you can always use a budgeting app (which I found very easy to use). Usually, you connect the budget app to your bank account and credit cards to automatically download any transaction you make and categorize the spending to match the budget you have chosen on the app.

Here are some examples of budgeting apps you can use:

Mint (Free) 

Mint is a free budgeting app that offers the option to create your budget. It tracks how well you keep your budget if you link to your bank account and credit cards. You can set money limits, choose different categories, or specify how often each expense occurs. And it's free – who also doesn't love freebies when you are a student?

You Need A Budget (Paid)

You Need a Budget is a widespread budgeting app that costs $14.99 per month or $98.99 per year. You can try the first 34 days for free to check its capabilities. After that, you can get detailed reports, free live classes, set spending limits for each category, and connect your bank account and credit cards.

YNAB states new budgeters generally save $600 in their first two months and more than $6,000 in their first year. So why not try for free and see if you save money?

PocketGuard (Paid)

If you keep overspending your money, you can try PocketGuard. Its components focus on helping users manage not to overspend. You have a free version with limited customization (only one goal) and the PocketGuard Plus, which costs $7.99 per month, $79.99 per year, or $99.99 for a lifetime membership.

It's a great app that reminds you when your credit card bills are due, how much money you can spend, set financial goals, where you spend your money, etc.

7 – Implement The Chosen Budgeting Method

This is the part where you act and apply the budget you think is the most relevant to your needs and the budgeting tool you think will be the best to keep track of your spending. Keep this step realistic, as not all budgeting methods will be applicable when you budget in college.

50 30 20 rule budget

You want to add how much income you will have for the month and how much money you have for each category (depending on your chosen budgeting method).

After you split your income between your needs, wants, savings, debt repayments, etc., you can look at your money for the month and control it much better.

8 – Keep Track Of Your Budget

I like to keep track of my budget daily. Some people prefer to do it weekly, but it seems more tiresome if you have seven days to check at once than one each night. So I go to my Excel spreadsheet and minus the expenses in the categories I have spent money. This way, I know how much money I can still spend on that category for the rest of the month.

As a college student, you might choose to opt-in for weekly reviews rather than trying to keep up with your budget on a daily basis. Between all of the classes, socializing, job-related events and applications, and staying fit and healthy, your schedule might not allow for it.

You must keep a close watch on how much money you have spent and whether you have overspent. For example, it's no point to set you can only spend $100 on eating out monthly, but you keep spending $300.

9 – Evaluate and Readjust Your Budget Monthly

After one month of implementing your budget, you can check what went right and wrong. This review period might be more frequent if you choose for it to be. You must make some adjustments and keep trying till you get it right. Checking regularly helps to be more in control rather than waiting until your next student loan tranche comes in.

Why you need to evaluate a Budget
Budgeting For College Students - The Student's Guide  13

You may have to change to a different budgeting method, spend less money in one category, or decide what to do with the extra money left in your bank account. However, you mustn't give up and keep working towards your financial goals.

Budget Examples For College Students

Again, you need to decide for yourself and choose the best budgeting method according to your needs. Still, I think the 50/30/20 rule budget and the 80/20 rule budget are two excellent budget types to start budgeting during university. Let me show you examples of both.

Budget Examples For College Students 50-30-20

With the 50/30/20 rule budget, you allocate 50% of your income to your needs, which encapsulates everything you can't live without or would be difficult. Then you have 30% of the earnings for your wants, which is everything that is not essential, but you have joy consuming. Finally, the last 20% goes to your financial goals and where you want to save money.

You can adapt the percentages according to your needs, but try to respect them when creating your budget. For example, maybe you need to put more money into your needs instead of your wants.

Budget Examples For College Students 80-20

If you don't want to split your needs and wants and you would like to keep your budget as simple as possible, try the 80/20 rule budget. It allocates 80% of your income to expenses and the other 20% to savings. It's basically the 50/30/20 rule budget but without differentiating your costs.

Budgeting Tips For College Students

Whilst budgeting at university, your limited and infrequent income only stretches so far. But there are a few major tips and tricks to stretch your budget further, like using student discounts, embracing communal living, spending below your means, cooking your own food, and frequently checking for free events.

Use Your Student Discount

The app store is full of apps that provide special student offers on everything from travel, shopping, activities, and entertainment to even necessary study materials. For example, UniDays was my favorite. Taking the time to get familiar with them and what offers they have might save you lots of money in the future.

Embrace Communal Living

Communal living, which can involve a house share with a few of your university friends or living in student halls, is worth considering. In addition, some universities offer guaranteed student places for 1st-year students – it's a good way to make friends when you start university.

Those friends can subsequently become your flatmates during your later university years. Communal living is also so much cheaper than living alone and is an experience you want to do whilst in college.

Spend Below Your Means

Spending or living below your means translates to not paying more than you earn – or receive as a student. Suppose you spend or live above your means. In that case, you are likely to get involved in many debt facilities, leaving you finishing university with a negative bank account balance and having to pay it off sooner or later. It will also cost you interest, and you might end up hurting your credit score in the future.

Look For Free Events

University towns are full of attractions, and many are free. A good source for those can be the Eventbrite website. For example, I went to a free stand-up comedy gig and a food-tasting event for a newly opened restaurant. 

Your university and student union website will be an excellent place to look for free events. They not only organize career-related events but also there are usually lots of social events where they are free to enter. 

Cook Your Food

Takeaways, restaurants, or pre-prepared meals sound so easy – but they are also expensive. Opting for not cooking your food will be very expensive – usually, two takeaways can be the equivalent of a weekly shopping bill if you cook your food. Other university students you are living with might also be able to show you a receipt or two that they know.

Common Questions About Budgeting For College Students

These are the most common questions about budgeting for college students.

What Should A College Student Budget Include?

A college student budget should include all your income (student loan, bursaries, part-time job, and any other sources of money) and all your expenses (rent, essential bills, transportation, course materials, groceries, student insurance, medications) and anything you spend your money on it.

How Much Should A College Student Spend?

This will largely depend on the university you enter, ultimately deciding where you will live and the associated cost of living. On average, the estimated cost of living in the US is quoted anywhere from $10,000 to $25,000 per year, which means you should brace yourself for anywhere from $900 to $2100 per month.

How Much Money Does A College Student Need Per Month?

Again, this will depend on the university you are studying at and the place you live in. The cost of living will vary in different and even within the same states. A college student, on average, should be expecting anywhere from $900 to $2100 per month in the cost of living in the US.

How Much Money Is Enough For College?

Excluding the tuition fees, which are always high and increasing, you will need around $10,000 to $25,000 per year to cover your living expenses. Tuition fees can vary a lot depending on the university you attend. Tuition fees usually range from $5,000 to $50,000 per year.

How Do You Spend Money Wisely In College?

Start thinking about the money for college before you get there – with a possible summer job as a good start. Next, make sure you budget realistically, which you will be able to stick to and be motivated to follow. Next, track your spending, review your budget as often as possible but at least once a month, and identify where you are going wrong.


I have finished two universities, including one in one of the world's most expensive cities, London. So if you are looking for an answer to how to start budgeting in college, you don't need to look elsewhere. Once you start, I promise you it will get easier with time. Follow the steps above and figure out what is best for your needs since budgeting is different for everyone, but the measures never change.

At the end of the day, never forget that you will fail to budget plenty of times, especially the first ones. So don't be too hard on yourself, and keep trying. The most important when budgeting as a college student it's not to give up. You might find it more difficult than in adult life, but it is one of the skills which will last a lifetime!

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Michael launched Wealth of Geeks to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.