How to Budget and Save Money as a College Student

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save money as a college student Learning how to budget as a college student goes a long way.

It’s a life-lesson that you can use long after you’ve graduated.

And, if you’re looking for tips, here are some effective ways to budget for college students so you can save extra cash along the way.

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Why You Need a Budget for College?

College is a time where you’ll be spending quite a bit of money. We’re all aware of how expensive tuition has become. But, in addition to that, there are a host of other expenses you’ll encounter.

This makes budgeting very important. It lets you get ahead of the game.

By that, I mean you’ll be aware of the different costs that come your way. More importantly, you’ll be ready to act.

This saves you a lot of money over the course of your 4 years. It also prevents overspending or unnecessary expenses.

The best part about budgeting in college is that it can keep you from getting deep into debt.

Student loans are no fun. You may not feel them when you’re in school. But, the moment you graduate, it will come right at you. And, there’s no way to get rid of student loans besides paying them in full.

A Few College Budget Tips Before You Start

Before I go any further, here are a few tips to remember when you’re create a budget for college.

  • Your Main Goal for Your Budget: while you’re creating and updating your budget, always keep in mind that your number 1 goal is to get a ZERO BALANCE. That is, the point of making a budget is that the money coming in should always be equal or more than what you’re spending. At the very least, your cash inflow minus your expenses equals zero. If you come out positive, all the better, you have extra savings.
  • Be Realistic and Practical. It’s easy to concoct a budget that balances out. But, you need to make sure it’s realistic for your lifestyle. It has to be achievable. More importantly, you need to be able to live day in and day out without being miserable.
  • What’s the Purpose of Your Budget? What’s the goal of your budget? In short, what’s your “WHY?” Is it to graduate college without any student loans? Is it so save some money for a trip to Europe after your graduate? Or, is it to build up capital for your startup so you can create your own business when you leave school? Your goal will be your motivation. It will help you construct your budget to get your desired results. It will also help you be consistent because you’re aiming for something.

How to Create a Budget for College Students

Now that you have the preliminary things out of the way, it’s time to put together your budget. Like building a house, it’s important to plan everything out first. You also want to get the right components ready.

So, here they are.

Figure Out Where All Your Money Is Coming From

The first thing to figure out is what and where your money is coming from. This is your cash inflow or income.

You’ll want to tally everything that brings in money. Ideally, you’ll be using an app or spreadsheet to keep track of these things. You can likewise use a sheet of paper. But, one thing I’ve learned with using paper for budgeting is that you need to be very organized.

If you decide to use paper, make sure you store it in a folder. And, keep the folder somewhere you’ll always remember. Otherwise, you’re likely to misplace it. Additionally, paper gets crumpled, torn and deteriorates over time.

Whichever you decide to use, the goal for this section it to list all your cash inflow or income. This includes sources like:

  • Allowance or money sent to you by family
  • Earnings from your part time jobs
  • Money from grants or scholarships that aren’t used for tuition, housing or other school related things
  • Your savings
  • Side gig
  • Tutoring
  • Any other sources that bring in money

Keeping track of them is fairly simple. All you need are two columns.

  • Column A: The income source
  • Column B: Amount you receive from it

You’ll be adding them up later on so using a spreadsheet or app makes this much simpler.

A few notes:

  • RULE #1: It’s ALWAYS BETTER TO UNDERESTIMATE your earnings than overestimate them. This puts your estimates on the conservative side. It also prevents unpleasant financial surprises from biting you where it hurts most.
  • Rule #1 is very important because we tend to overestimate the inflows. Our brains somehow like to boost the positive things to help make us feel better. So, always remember rule #1.
  • The more thorough you are, the more accurate your budget will be.

Figure Out Where All Your Money Is Going

Once you’ve gotten all your income in order, it’s time for your expenses. This will take more work because there’s usually more of them.

At the very least, there will be more categories related to your expenses.

A good tip when starting out is to keep track of all your expenses. By that, I mean start from the beginning of a month and keep tabs on all your spending. You can collect receipts as well as bring a notebook with you to write down each item you spend.

From experience, this is a much more accurate way of estimating what your monthly costs are.

It does take more work. And, will take 30 days to get a complete picture of your spending.

But, I’ve found that this is far more accurate that trying to remember all your expenses and making a list out of it. Often, this latter method comes up WAY SHORT.


Remember what I said about our brains often overestimating our income? It also happens that we like to underestimate our spending.

I’m not a behaviorist or psychologist so I’m not exactly sure why. But, that’s seem to be the case for me and most people.

In addition to tracking everything by hand, it’s also time to start organizing your financial statements. This includes credit and debit card statements, bills, and other items requesting for payment. You’ll want to keep these for documentation purposes.

Main Expenses for College Students

Here are some of the common expenses you’ll have while in college. Based on your lifestyle and college experience, you may have a slightly different list.

Obviously, the list below isn’t comprehensive. It’s meant to be more of a starting point.

That said, here’s another reminder.

It’s ALWAYS BETTER TO OVERESTIMATE EXPENSES, rather than underestimate them. This way, your cash won’t fall short of your spending in case your estimates are slightly off, which can happen due to unforeseen circumstances.

Main Expenses

These are some of the main expenses you’ll need to pay for or purchase every semester.

  • Tuition
  • Dorm Fees or Rent
  • Food (Meal plans, cash or points)
  • Textbooks
  • School supplies
  • Emergency Fund

Most students will forego the emergency fund. I highly suggest not to do this. While you may never use it, it’s always a good idea to have some cash ready in case of unexpected events.

One important tip is to check whether you pay for health insurance in your tuition. Some schools include this item while others don’t. If you’re not sure, you can ask the school or payment offices. This way you’ll know if something happens, whether or not you’re covered and how much the coverage is.

Since you’re in school, 1 to 3 months’ worth of expenses will likely be more than enough for your emergency fund.

Personal Expenses

While bulk of your expenses will go to tuition, housing and your food, you’ll also be spending for personal things as well. These are your day to day things.

Unlike those above, these are more flexible. That is, many of them are things you WANT, but may NOT NEED. In contrast, the main expenses above are more necessities.

This means you can cut off some of the items below, reduce the amount of money you spend on them, or find alternatives to them. That’s not likely for your main expenses.

  • Cell phone bill
  • Transportation (bike, car, bus, train, etc.)
  • Insurance (if you have a car)
  • Health insurance (some schools include this in the tuition so you may want to check that). Also, you may or may not be included in your parents’ plan)
  • Laptop, tablets, phones and other digital devices. This also includes repair or apps you buy
  • Eating out
  • Coffee and energy drinks (you’ll be drinking a ton of these)
  • Entertainment
  • Clothing and shoes
  • Movies and music
  • Room/Dorm Decor and Furniture
  • Vacations (winter break, spring break, etc.)
  • Other things you may want to buy or spend on

Fixed vs. Variable Expenses; Recurring vs. Non-Recurring Expenses

Now you have a basic idea of your expenses, there are a few things you’ll want to know about them. That’s because not all expenses are the same.

While it’s easy to compare expenses based on price, it’s also important to know which are one-time expenses, and which ones you’ll need to keep paying for.

Similarly, some items will almost always be the same amount month in and month out. This makes it easy to estimate for them in next month’s budget. On the other hand, other items can vary significantly depending on the time of year, or school calendar.

Here’s a quick breakdown of the different categories.

Fixed vs. Variable Expenses

Fixed Expenses

Fixed expenses that things that cost the same almost every month. You pay them on a regular basis. And, it many cases, they’re harder to change. You’ll often need to adjust your subscription or talk with someone before being able to modify them.

Some examples are:

  • Rent
  • Cell phone bill
  • Health insurance
  • Gym fees

The man benefit of fixed expense is that they’re easy to predict. You know they’ll be there. And, you have a good idea of how much they cost. This makes budgeting for them easier.

An additional benefit is that you’re used to them. So, they don’t really affect or force you to change your lifestyle one month to the next.

Variable Expenses

Variable expenses are the opposite of fixed expenses. They can swing up or down depending on the month or time of school year.

Some examples include:

  • Groceries and eating out
  • Electricity and Utility bills
  • Clothing
  • Books
  • Entertainment

For example, during the winter months, you’ll likely be using the heater a lot more. This pushes your electric bills up.

Similarly, during the holidays, you may spend a lot more for eating out and entertainment. Meanwhile, the opposite is probably true during exam week.

Because they can vary from month to month, you’ll need to keep track of your spending. Once you have a record that runs a couple of years or more, you’ll have a better idea of how to budget based on your spending trends depending on the time of year.

Recurring vs. Non-Recurring Expenses

In addition to fixed and variable expenses, there are those that you need to pay for every month and others that are one-time purchases.

Recurring Expenses

Recurring expenses come in every month. This means they’ll be present in your budget every time. That makes them easier to predict.

Recurring expenses may be fixed or variable. For example,

  • Your cell phone bill is recurring because you pay a certain amount each month. It is also fixed because you pay more or less the same amount based on your plan.
  • In contrast, your electricity bill is both recurring and variable. You’ll need to keep paying it each month or it gets cut off. But, depending on whether it’s hot or cold outside, your bill may be higher or lower than the last month.
Non-recurring Expenses

On the other hand, non-recurring expenses are one time purchase or things that you pay for in a short period, for example, a 3 month installment plan.

They’re not likely to be there every month. So, to a degree, you need to be able to have extra room in your budget for these purchases.

Some are sudden, like if your car suddenly breaks down. When this happens, you’ll need to spend some money to have it fixed.

Others are more premeditated. For example, you’ve been thinking of buying a certain pair of shoes. This means you’ll have an extra expense on your budget for shoes this month that won’t be there the next month

Because they’re not always predictable, it’s always good to have some money allocated in your budget for unexpected expenses. Or, you need to have extra cash in your savings to pay for them.

Differentiate Between Needs and Wants

Once you’ve listed all your expenses, it’s a good idea to categorize them into WANTS and NEEDS.

  • Wants. These are things you’d like to have. But, they’re not necessities. That is, you can live without them. Things like traveling with friends for spring break, eating out or buying a new iPhone are all wants.
  • Needs. These are your essentials. You need them to either survive or get by in college. For example, paying your tuition, rent or dorm, and credit card bills are all needs. Something like buying a laptop may be a want or need. Some colleges or majors require them. And, if you don’t have one it becomes a need. Of course, if you already have one, then getting a new one may just be a want.

Separating the needs and wants allows you to know which expenses to prioritize. If you have more than enough on your budget, you won’t need to cut any of them. That’s the ideal situation.

But, as a college student, you probably know money is often tight. This means you’ll need to save and find ways to limit expenses.

So, when it comes time to slash expenses, knowing your wants and needs lets you quickly start with items that are non-essentials.

Prepare for the Unexpected: Your Emergency Fund

You’ve probably noticed my mentioning the importance of having an emergency fund a few times earlier in the article.

Because it’s a vital habit to learn, I truly believe that it’s a good idea to get used to it sooner rather than later.

In school, you may need anywhere from 1 to 3 months’ worth of living expenses. The amount is fairly small because you’ll have your parents’ around to come help you in case anything happens. Colleges also have a lot of resources, including clinics and counselors to help you.

That said, once you graduate, you’ll need more. Many financial gurus like Dave Ramsey suggest having 6 months of living expenses worth saved up for your emergency fund. This gives you some leeway in case you can’t work or get sick.

While you may not like setting aside cash when you can use it to buy stuff or go out, here are a few reasons why you’ll always want to have an emergency fund around.

  • You lose your source of income. This can be your job, part-time work, being a research assistant or even your grant.
  • If you lose your bike or your car needs repairs.
  • The extra funds can be used for transportation or to buy work clothes for your internship.
  • If you’re graduating, money set aside will let you cover job search costs like resume preparation, travel or job fairs.
  • It can also be used for graduate school entrance exams like the GMAT as well as applying to graduate school.

Having an emergency fund lets you draw money you need in a hurry. Then, you can just replenish it later.

Important Things To Take Note Of

To close out this section, here are some important reminders keep note of.

  • Know your high priority items. These are your essentials. That means, you NEED TO PAY THEM. Thus, it’s important to know them by heart. What they are, how much they cost and when they’re due. Things like tuition, food, rent or dorm, credit card bills, and transportation are often in this list.
  • Know Your Low Priority items. These aren’t as important. But, they’re what make life fun. Things like your cell phone bill, internet or data plan and eating out with friends are all part of your college experience. But, you don’t need them to get through college. Although, not having them can make it less enjoyable. That said, push comes to shove, you can set them aside if you’re short on cash.
  • Emergency Fund. This is vital. As Murphy’s Law states, “Anything that can go wrong will go wrong”. The thing is, you don’t know when this will happen. So, it’s always a good idea to be safe than sorry when that situation suddenly arises.
  • Savings. Always remember what college is all about. Sure, it’s fun. But, after 4 years the fun will be over. So, you want something to show for it. This is especially true if you’re paying your own way through college. Thus, in addition to your degree which will help you land a job, you want to come out of college with some savings. This will let you prepare for life after college. You can use it to buy work clothes, pay the rent and the bills. Ideally, try to save between 10% to 20% of your monthly income or allowance. This will give you something to start with after graduation.
  • Spending Money. This is the least important because you can technically do without it. But, that’s not what college is all about nor is life. Money is there to serve you, not the other way around. So, your spending money is there to “pay yourself”. It lets you enjoy the things that make life worth living. But, don’t overdo it.

Create Your Budget

Finally, it’s time to create your budget.

You already have all the components listed and ready from the steps above. All you need now is to:

  1. Compile all your income. Group them together and get the total.
  2. Group all your expenses and get the total.
  3. Subtract your expense from your income. Ideally, the result is 0 or a positive number. That means your income and/or allowance covers or more than covers your monthly costs.
  4. If the sum is negative, don’t worry. It just means you need to do some more work.

What to Do If Your Budget is Negative

A negative budget means, you can’t afford your currently lifestyle. That means two things.

  • You’re spending too much
  • You are not making enough or receiving enough income

So, here’s what to do:

  • Step 1: Start cutting expenses. Take a look at the biggest expenses. See if you can slash them in whole or in part. Often, it’s easier to slash bigger costs because of their amount.
  • Step 2: if step 1 doesn’t work or isn’t possible, start looking at your WANTS. These are the non-essentials. In general, cutting these often gets your budget to zero or positive.
  • Step 3: This is rare for a college student. But, if you’ve cut all your WANTS and are still getting a negative number, it’s time to find ways to make more money.

An Important Note on Making Your Budget

One common misconception about budgeting is that it’s a one-time thing. That’s not case. In fact, it’s the opposite.

  • You can keep adjusting your budget till you get to ZERO. Your budget is something that you can keep tinkering with until you get it right. That is, find something that works for your lifestyle. So, don’t worry if the first total comes out negative. It just means you need to try a few more times to get there.
  • You should update your budget every month. Each month is different. Sure, there will be fixed expenses. But, the variable ones will change. Additionally, there may be non-recurring one-time purchases you may need to make. Or, you may start new subscriptions that add to your recurring expenses. That means, it’s a good idea to always update for budget for the next month. This way you don’t get any unpleasant surprises that put you in a bind.

Create Your Budget Using a Spreadsheet

One of the easiest ways to create a budget for college is using a spreadsheet. Microsoft Excel is perfect because you’ll probably have it installed in your laptop along with MS Word.

Excel gives you the flexibility to personalize your income and expenses. This makes it easy to add or remove entries depending on the moment. It also makes calculations easy and automatic.

These fetures comes in handy when you need to update your budget. It’s also a great help when you’re doing trial and error computations to see which expenses are the best to reduce and how much to decrease them by.

Best Budget Apps for College Students

If you prefer using your phone, you can likewise create your budget that way. There are so many apps available that you can choose which ones you like to use.

Here are some excellent budget apps that will help you balance your income and expenses faster.

  • Mint. This is the best budget app for automation. It connects to your bank account to make everything simple and effortless. It also gets rid of a lot of data input which no one likes to do. With it, you can focus on the adjusting the budget and categories to spend less on.
  • Toshl Finance. This app is perfect if you like visuals. It will quickly show you the breakdown of things. And, you’ll be able to put a hard limit on any item. This makes sure you never spend more than say $50 on coffee per month.
  • Check. This is similar to Mint in that it’s very comprehensive. It has a lot of features and covers everything, including connecting to your bank account. The best part is that it lets you set up reminders. This lets you stay on top of your bills, so you pay them on time.
  • Left to Spend. This is one of the simplest budget apps. It is no-frills making it easy to use. It doesn’t give you all the extras. Instead, you set a spending allowance. Then, start subtracting from that amount as you spend or buy things. This lets you keep track of how much of your allowance is still available.
  • Debt Payoff Planner. If you have credit card debt in college (which YOU SHOULD NOT HAVE), this app will help you keep track of your debt payoff. It’s also a handy tool is you’re already thinking ahead and are already paying off your student loans while you’re still in school.

Some Tips To Help Stay Within Budget

The goal is to end up with some cash left after you’re spent on all your expenses at the end of each month.

Ideally, you have a bit of savings set aside. This gives you the luxury of accumulating savings to get a bigger ticket item later down the road. For example, something to reward yourself say at the end of the semester or when you receive your diploma.

Another option is to keep on saving it and use it to help yourself get started when you graduate. Remember, any savings you have helps you when you’re out living on your own with your first job.

Always Ask for Student Discount

The number 1 rule when you’re a college student is ALWAYS ASK FOR STUDENT DISCOUNT IN EVERYTHING. Usually, the area around colleges and universities survive on business from college students. That’s why you’ll see a lot of mom & pop stores around.

All these establishments are very aware of who their biggest customers are. This is why you’ll see most of their prices cater to college students.

In addition, they’re likely have student discounts.

So for stores in and around campus, always ask if they offer student discounts. It never hurts to do so. At times, you may need to use School ID cash to get the discounts.

Track Your Spending and Cut Back Where You Can

Record all expenses. Keep your receipts, bank, ATM and credit card statements. All of these documents will let you make an accurate assessment of your expenses.

It also lets you figure out where you’re spending most of your money.

Because humans are creatures of habit, it’s very likely that you’re spending 70-80% of your money on 20-25% of the items listed in your budget. This lets you focus on those items to see if you should really be spending that much on them.

A final tip on receipts. Many stores now use thermal paper when issuing receipts. While cheaper for the store owners, they’re a nuisance for you and I.

That’s because ink on thermal paper receipts disappear after a while.

The best way to recover them is to apply heat. Blow a hair dryer or put a lightbulb a few inches behind the receipt. The heat will make the ink reappear.

It’s important never to put the heat source in front of the receipt, otherwise it will black out the entire front side, which makes matters worse.

Keep an Eye Out for Big Monthly Expenses & Small Items That Add Up

When creating your budget, there are two types of expenses that do a lot of damage. These are:

  • Large amount/big-ticket purchases. These are obvious. But, they can hit your budget very hard. Sometimes they’re necessities like tuition. But, if you can avoid the non-essential ones, you’ll save a lot of money.
  • Many small expenses that add up. These are sneakier because they’re hiding in plain sight. Often, these are a bunch of smaller cost entries on your budget. Or, they are inexpensive things that you routinely do and take for granted because they’re cheap. One example is going to Starbucks for coffee. Think about it. If each cup is $3, and you buy a cup every day for a year. That’s over $1,000 in coffee alone. You’ll be way better off making your own coffee at home or in the dorm.

Keep Your Records Organized

As you’ve seen earlier, budgeting is not a one time thing. Ideally, you should be updating your budget monthly. If things are more or less the same month in and month out, you may scale it back to updating only when new expenses come up.

Initially, it’s a good idea to visit and revisit your budget often. It helps you uncover things you don’t need. And, it also lets you master your budget items.

Doing so on a regular basis lets you know the things you spend on. This eventually helps you decide which items can be reduced or taken out all together.

Being familiar with all the different categories, especially your expenses, also makes you more aware of things and their prices the next time you spend.

For this reason, it’s important to keep your budget and all the items related to it organized. Doing so makes it easy to pick things up next month when it’s time to update it.

Set Aside Some Savings

Pay yourself first. All this work is for your future. The goal of which is being to be able to have something you can fall back on later on.

Ideally, you’re setting aside some of your income and allowance while you’re in college. This will give you a head start when you graduate.

That way, after graduation, you’ll have some money saved up to get yourself off the ground.

Always Keep Your Future in Mind

You’re going to college for your future. So, it’s important to start developing good financial habits right now.

It’s easier to do so while in college because you aren’t burdened by other real-world responsibilities yet. This gives you a grace period of sorts to learn how to manage your finances properly.

Don’t Pay With Your Credit Card Unless You’re Sure You Can Pay the Total in FULL

Never pay with your credit card unless you’re sure you’ll be able to pay the entire balance on time.

This is not only a college budgeting lesson but also a very important life lesson.

Not paying the amount in full means the credit card company will charge you interest for the remaining balance. So, always look beyond the minimum amount due. Look at the total amount due instead.

Additionally, always pay on time. You’ll get charged a late fee when you don’t pay in time.

Find Free & Cheap Activities

One of the best things about college is the diversity. You’ll probably never see that kind of diversity again, especially when you start working. That’s because you’ll be working in one industry.

That said, the diversity provides a lot of different events, meetups and happenings. It’s up to you to find them.

College is full of them because everyone’s so active.

Decide on an Eating/Food Plan

Food will be a large expense while in school. This make it essential to do your research. Often food establishments in and around schools can vary in price.

You’ll have the very cheap options and some casual sit down dining places. This is true not only for private establishments and restaurants but also the cafes and stores within campus.

So, it’s important to do your research.

Another thing to consider is whether dining hall food comes out cheaper or more expensive than buying food yourself.

From experience, a lot of this will depend on how much you eat. If you eat a lot like most guys do, you’re probably better off with the AYCE (All You Can Eat) service in dining halls.

If lunch and dinner are often a sandwich or salad, buying your own food is likely to be more cost effective. You’ll easily save money by eating at Subway or nearby delis instead of the dining hall.

That said, during your freshman year, dining hall meal plans are usually obligatory. This means you’ll need to use them.

If that’s the case, don’t waste your meal plans or points. Read the terms & conditions in the fine print. That’s because some schools don’t carry over the cash or points at the end of the week. That means if you don’t use them that week, they’re wasted.

One of the benefits of meal plans is they’re fixed. You know how much you’re spending per meal.

That’s not always the case when you buy your own food.

Depending on where you go to college, food may be cheap or expensive. Cities like Los Angeles, New York City, Boston and San Francisco are very expensive. You can easily spend over $10-$15 per meal, often for small servings. That makes dining hall food more cost effective.

Save on Books

Textbooks are expensive. They generally cost more than regular books. And since you’ll likely only use them for one semester, at most two, it may not be a good idea to pay full price for them.

Here are a few options to save on college textbooks.

  • Buy used. Students who’ve taken the course before you often no longer need the books. So, you can buy them at a steep discount. Used books also cost so much less than new ones.
  • Check Amazon. Amazon often offers good prices. If you look at their used books collection, you’ll find some selling at $1 or a little bit more.
  • Ask your professor if you can use a previous version. In my experience, students are scared to approach their professors because of their standing. That’s actually not warranted. If you get to know them, they’re among the most helpful people in the world. Ask your professor if you can use a previous version of the textbook. Often times, this works. They’ll also tell you which version is closest to what they’ll be using in class. Old versions are much cheaper because there’s a new one out.
  • Borrow. You can share a book among your friends especially if you take the same class at different times. Another option is to borrow the one in the library.
  • Photocopy. This works if there are only a few chapters in the book you’ll be using for the class. In these cases, I’ve found the photocopying the chapters instead of buying the entire book is more cost effective.
  • Sell the books once you’re done with them. Once you’re done, you can recoup some of your money by selling it to someone else who needs it.


For most students, college will be the first time in your life you’ll be on your own. This means you’ll need to watch over yourself and your finances. Learning how to budget in college goes a long way in getting your ready for the real world. More importantly, almost all colleges never have any class on personal finances. So, it’s important to learn it on your own.

Before you go, I’d love to hear about your budget tips for college students in the comments section below.

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