You wake up in the morning feeling fresh and ready for the day. You do your morning routine and start your classes online. After class, you order some take-out to share with your roommates, but when you hit “submit order” you get a message that slaps you across the face: “insufficient funds.”
If you're a student, this might seem like your absolute worst nightmare. BUT, it fully might happen to you if you don't plan well. Have you ever stopped and asked yourself “truly how much money do students need?” This is a crucial question to answer if you're to budget well. If you haven't pondered it though, no worries. I do the heavy lifting for you in this post. Get ready, as we're about to find out just how much money students REALLY need to live a comfortable post-secondary life.
Get the Goalpost to Stop Moving
On the Financial Pupil, I quote Morgan Housel a lot. More specifically, his book The Psychology of Money which I'm a huge fan of. The idea that matters a lot in this post is his assertion that the most important thing you can do for your personal finances is to get the goalpost to stop moving.
Most people who don't have control over their money suffer from rapid lifestyle inflation. What this means is that when they make $30,000 a year, they spend all $30,000 and say to themselves “man if only I could make more money…” Then when they get promoted and start making $50,000 a year, they spend the money on new stuff that wasn't in their budget before. Maybe it's a new car, or a new watch, or they eat out more. Whatever the case, now that they're making 50k a year, they spend 50k and say to themselves “man if only I could make more money…”
This is why there are people making 40k a year who are broke and struggle with finances, and also why there are people making 1M a year who are broke and struggle with finances.
You might think to yourself “that's great Jeff, but I'm just a student. How does this apply to me?” Let me tell you from first-hand experience: it doesn't matter how much money you make, lifestyle inflation affects us all. I felt it when I started earning a bit more at my job and eating out more and I'm sure you'll feel the tug of lifestyle inflation too. The key is to keep it in check so that you can actually stick to whatever plan you lay out for yourself instead of having lifestyle inflation destroy all your finances.
What is the Median Comfortable Student Lifestyle?
Before we dive into how much money it takes to live a comfortable student life, let's establish what a comfortable student life IS.
In my own experience, there are a few things that matter most to students:
Generally speaking, the average student will probably have these four things as their biggest expenses. So let's determine a baseline for each one.
The average student probably has a little bit of help from parents in regards to tuition but not a ton. They probably have to pay for most of their college experience.
The “median” student probably lives in a decent space with at least a washroom and a bedroom. Nothing fancy like a loft or anything, but also definitely not a dumpster. Let's say that the average student probably lives in a mediocre medium level 1 bed 1 bath apartment.
They also probably enjoy eating out a lot. The “median” student would probably try to buy in bulk to save money but still end up going out to eat with friends a few times a week.
Finally, the average uni/college student will probably party a decent bit. Let's say that the average post-secondary student parties once a week.
So, we've built up what an average student might look like. Let's do a little digging and assign some numbers to this imaginary student.
Of course, these costs will vary greatly depending on what kind of school you're attending and also where you're situated. I'm from around Toronto, Canada, so for the purpose of this scenario let's say our imaginary student is living on campus at UofT in the city.
So, let's break down the expected expenditures:
- Tuition: $900/month
- Rent: $1000/month
- Food: $200/month for bulk + $150 in eating out
- Socializing/partying: $100 to buy food and stuffs for parties
Tally all this up and we get a total of $2350! That is the price that an average student needs to pay for a “median” comfortable lifestyle. Phew, that's a pretty high cost of living (even for adults). No wonder so many students apply for scholarships, grants, and break their butts working part-time.
How Can You Fund This?
This might seem scary if you're not yet in university. After all, where ARE you going to come up with $2000 a month???
Obviously everyone is different, but here are a few suggestions on how you can come up with the funding for post-secondary:
- Tutor other kids
- Apply for scholarships
- See if you qualify for financial aid
- Take out a student loan
- Ask your parents for support
- Work a part-time job
It might seem like a daunting task, but if you piece everything together, you'll probably find a way to pull through. (or you might have to grind it out and settle for living a “sub-median” student lifestyle).
How Much Money Do Students Need?
There you have it. Students, on average, need around $2300/month to live a “median” lifestyle.
Thought this number is high, it is completely possible to put yourself through college. Through a mixture of creative financing and hard work, you might be able to graduate debt-free!
One thing is for certain though. If you're to have excess money which you want to save and invest, you'll need to put in the hard work and grind out your university years. Building wealth is a simple process, but it's not easy. That being said, there's no better time to start than while still in school. So what are you waiting for? Now that you know how much it costs to live a median lifestyle, get out there and grind so you can make MORE than that and invest the difference. Your wealth will grow faster than you know 😉
Thanks for reading through How Much Money Do Students Need and thank you for following along! If you’re a Canadian Student, check out the Ultimate Canadian Student’s Guide to Personal Finance! To learn more about me, head over to this link here. If you want to get exclusive updates and tips, drop your email in the “get updates” box (might have to scroll up a bit.) Let me know your thoughts and suggestions in the comments!
Jeff is a current Harvard student and author of the blog Financial Pupil who is passionate about learning, living, and sharing all things personal finance-related. He has experience working in the financial industry and enjoys the pursuit of financial freedom. Outside of blogging, he loves to cook, read, and golf in his spare time.