How to Budget as a College Student
College gets expensive fast. Beyond rising tuition, you also have to cover housing, food, books, transportation, and personal expenses. Unsurprisingly, financial stress is one of the top reasons students drop out: In a 2024 survey of 1,500 college students from Ellucian, 19% said they left school due to financial uncertainty, and another 59% said they had considered dropping out for the same reason.
Budgeting is one way to help you stay in school and avoid financial burnout. A clear budget organizes your spending, helps reduce college debt, and gives you a plan for the future. When you track your money, you can find and eliminate unnecessary expenses, stay ready for emergencies, and avoid relying too much on credit cards or loans.
Creating a Budget as a College Student
To build a reliable college student budget, you should understand your income, expenses, and the common challenges that can throw it off. The following steps will help you track your income, manage your spending, and stay on top of your finances.
Understand Your Income
To build a realistic budget and calculate the cost of college, first understand how much money you have to spend each month. Your income can come from:
- Jobs or Work-Study: Many students rely on these to help cover everyday expenses, like rent, groceries, and supplies.
- Financial Aid Refunds: If your financial aid package (grants, loans, scholarships) exceeds tuition and fees, your school may issue a refund. Keep in mind that refunds from loans require repayment.
- Family Support: If your family helps with housing, food, or other essentials, include that support in your income. Be clear about what it covers and whether it’s consistent.
Once you list all your income sources, add your total monthly income and use that number to plan your spending. Knowing your actual income helps you avoid overspending so you can make smarter financial decisions.
Plan Your Expenses
Now that you understand your income, the next step is to plan for your expenses — how you’ll spend your money. Break your expenses into two categories: fixed and variable.
- Fixed Expenses: Costs that stay the same each month, like rent, tuition, insurance, or subscriptions
- Variable Expenses: Costs that can change, like groceries, gas, entertainment, clothing, or supplies
Add your total monthly income from jobs, family support, etc., then subtract your fixed and variable expenses. Whatever’s left can go toward savings or an emergency fund.
Prepare for Unexpected Costs
Planning for unexpected costs is an important part of building a budget. Medical bills, car repairs, or last-minute travel can happen anytime, so it’s smart to be prepared. To account for unexpected expenses, you can:
- Set up an emergency fund. Try saving a small amount each month. Just $10-$20 can add up and give you a cushion when needed.
- Cut back. Reduce or eliminate expenditures on takeout, streaming services, and impulse shopping. Even small changes can help you build a safety net.
This extra money helps you avoid going into debt or relying on credit cards if unexpected costs come up.
Top 10 Tips for Saving Money in College
Even with a strong budget, there are still smart ways to cut costs. From choosing the right classes to making small everyday changes, these tips can help you save money.
- 1
Start at a Community College
You can save thousands by starting your education at a community college. In the 2022-23 school year, the average in-state tuition at public two-year schools was $3,598, compared to $9,750 at public four-year institutions and $35,248 at private four-year schools, according to the National Center for Education Statistics.
By completing 1-2 years of coursework at a community college then transferring to a four-year school, you can still complete a bachelor’s degree while saving on tuition.
- 2
Buy Used or Digital Textbooks
Don’t pay full price for new books. You can save money by buying used or digital textbooks from websites like Valore, eCampus, or your campus bookstore.
- 3
Use Public Transportation
Commuter students can save money on gas and vehicle maintenance by using the bus, subway, or train to get to school. Finding housing close to campus can also reduce commuting expenses.
- 4
Eat Out Less and Pick a Smart Meal Plan
Most schools offer several meal plans at different price ranges. You can save money by choosing a lower-cost meal plan and eating some meals at home. You can also shop at affordable grocery stores and cook food to save money.
- 5
Use Campus Resources
Make the most of services on campus, such as health clinics, counseling, tutoring, and fitness centers. These facilities are often just as good as off-campus options and typically don’t cost you anything extra.
- 6
Live at Home or Share Housing
Living with family can save you thousands of dollars per year in rent. If that’s not an option, consider living with roommates to split rent and utilities.
- 7
Find a Part-Time Job or Side Hustle
Working a few hours a week can help you cover everyday expenses. Be sure to balance work with your class schedule to avoid burnout.
- 8
Use Your Student Discounts
Some entertainment venues and businesses offer student discounts. Taking advantage of these discounts can help you save money.
- 9
Look for Free or Low-Cost Fun
Check out on-campus events, free movie nights, club sports, or local hikes. These activities are great ways to have fun without spending much or anything at all.
- 10
Pass Your Classes
Retaking a class means paying for it again. Don’t let that happen. Take a manageable course load, ask for help when needed, and use tutoring services to stay on track.
Expert Interview: College Money Matters
To get real-world insight into how students can better manage their money, we spoke with Melissa Boutin, a certified financial education instructor and student loan expert. She shares practical tips on budgeting, managing debt, discussing money with family, and making smart financial decisions during college.
Melisa Boutin is a student loan expert, and founder of YourMoneyWorth.com, a website providing personal finance resources to help millennials in the United States and the Caribbean region get rid of debt and build positive net worth.
Q. What are some common misconceptions college students — and even adults — have about budgeting?
Both adults and college students mistakenly think they can rely on the costs of attendance provided by colleges as accurate estimates of students’ miscellaneous and personal expenses. Expenses that a college student might incur can exceed those estimates, so it’s important for families and students to create their own budgets.
Another misconception about budgeting is that a written budget is not necessary for a college student, as they will have little or no variable income. In fact, budgeting is an essential skill that everyone can learn and master, even with a variable income.
Q. What should students keep in mind about accumulating and managing debt, especially student loan and credit card debt?
Students should aim to minimize the amount of student loan debt they take on to fund their college educations. When it comes to student loan debt, a student should limit the total amount of borrowing to no more than the starting salary they expect to earn after graduation.
For example, a student who expects to earn a starting salary of $27,000 after graduation should not borrow beyond that amount for college. Applying this rule of thumb can help students avoid the burden of unaffordable student loan debt payments.
In the case of credit cards, students should avoid carrying balances and get into the habit of spending only what they can pay off every month. If using credit cards will result in debt they can’t afford to repay in full, however, students should avoid them altogether.
Q. Having conversations about money with parents/guardians can be challenging. How can students work to keep an open line of communication when it comes to finances?
Students can initiate conversations about money from the angle of managing college costs, and use that as an opportunity to have ongoing conversations about money with their families. They can consider establishing a schedule of check-ins about their finances with their families at the end of each semester and during each school break.
By approaching it from a mature, practical standpoint, this way of communicating about finances can become routine.
Q. Some students need to work in college to get by. What advice do you have for those who need to balance academia with earning an income?
Students who need to work while taking college classes should explore work opportunities that allow them the time they need to dedicate to their course loads. They should consider earning money in flexible positions such as brand ambassadors (people hired to represent company or product brands in a positive light), street teams (people who hit the streets to promote events or products) or as a delivery person working with apps such as UberEats that allow students to work flexible schedules.
Saving money from paid internships or summer employment is another way students can balance school and work. They can ramp up work hours during school breaks and scale back when they’re back on campus.
Q. Amid tough classes and assignments, keeping a budget can seem arduous. What are some quick ways that students can keep an eye on their finances and ensure they don’t overspend?
Setting up calendar reminders to do routine financial check-ins is one way college students can steer clear of overspending. Another way is using a spending account and debit card like Chime, whose mobile app sends automatic alerts of transactions and account balances. These options make staying informed about your finances as simple as reviewing alerts on a smartphone.
Q. Are there administrators on campus who can help students with budgeting? How can students find them?
Financial education resources can be found at many colleges via the student affairs portal, as is the case at Wright State University. Another popular option is in-person financial wellness counseling services, such as those offered at the University of Minnesota. Students should check with their student affairs department on campus to explore the financial education and support services available to them.
Q. What are some ways that college students can cut their expenses?
College students can cut their costs of attendance by focusing on ways to save on major costs. Some areas to consider include:
- Choose an accelerated completion schedule. For example, a student can choose to take on a fuller course load and take classes during the summer to finish college in three years.
- Enter college with course credits earned through high school or community college before enrolling as a freshman.
- Become an on-campus resident assistant, which comes with the opportunity to reduce housing costs.
- Consider employment opportunities that offer tuition reimbursement or waivers. Chipotle, for example, is one employer that offers this benefit.
- Obtain course credits by examination with CLEP that colleges accept as equivalent course credits.
- Transfer community college credits with the prior approval of the college or university.
- Apply for scholarships from outside organizations, in addition to those offered by the college, and continue to apply for scholarships every semester through graduation.
- Negotiate tuition breaks and inquire about unlisted scholarships at the college.
Q. What are your favorite apps/websites on this topic that students might find useful?
My favorite budgeting app is Mint, as it aggregates all your transactions, allows for manual entries and tracks your spending against different budget categories and limits. As far as websites go, Centsai Education is a good personal finance resource for college students.
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