How To Create A College Student Budget

Going to college can be a big expense for many students, and not just because of tuition. There are other costs to consider such as housing, food, books and fun experiences. With most students facing plenty of expenses on a limited income, building a college student budget and understanding the importance of money management is critical.

There’s no denying that the costs of paying for school can add up quickly. It’s likely worth exploring how to create a student budget before getting started to set yourself up for success.

Why Is It Important To Make A College Student Budget?

College costs leave many graduates with thousands of dollars in student loans. That monthly debt payment can take a significant bite out of an entry-level salary. If you’re able, do your best to minimize the amount you borrow to pay for school. The best way to keep your borrowing costs low is to make a budget and stick to it.

Beyond minimizing your borrowing costs, setting up a budget during your college years is a great way to prepare yourself after graduation. You’ll need to create a budget after college to ensure you live within your means, so learning how to budget as a college student will serve you well for years to come.

How To Budget As A College Student

A college student budget can help you map out your financial goals while you’re in school and minimize your debt burden for post-graduation life.

Determine Your Income

The first step of building any budget is to calculate your income. During your college years, your monthly income might look different compared to someone with a standard full-time job. But it’s important to pool all of your income streams together to accurately determine your earnings and understand how much money you have to work with.

Below is a look at some of the income sources you might have as a college student:

• Part-time job: Whether you have an on-campus or off-campus gig, maintaining a part-time job will allow you to consistently make money and pay for some college costs during the school year. While they may not be as flexible as a side hustle, part-time jobs usually provide steadier income by comparison.
• Side hustle: A side hustle includes any role that generates income outside of a fixed job. It allows you to work around your school schedule and likely continue to earn money after graduation. Potential earnings vary based on your skill level and demand.
• Scholarships and grants: If you receive financial aid, don’t forget to include those funds. In general, these are disbursed on a semester or yearly basis, which means you’ll need to stretch out the funds for an extended period of time.
• Help from family members: If you have family members with the means and intention to help, consider finding out exactly how much they plan to pitch in. Disburse these funds where they’ll make the most significant impact on your personal circumstances.

As a student, you might choose to budget on a weekly, monthly or semester basis. To determine the best budgeting approach for you, consider the frequency and reliability of your income sources.  

Consider Your Financial Goals

As you build out a budget, it’s critical to consider your short-term and long-term financial goals.

Some short-term financial goals start while you’re still a student. This may include purchasing textbooks for the next semester, paying off a credit card balance or growing an emergency fund in a high-yield savings account.

However, long-term financial goals can stretch beyond your college years. You may want to graduate debt-free or minimize debt to lessen your financial burden after graduation. Even longer-term financial goals might include saving for retirement or building up an emergency fund.

It’s never too early to start thinking about your financial goals.

List Out Your Expenses

With a better understanding of your income and financial goals, it’s time to list out your expenses.

Start with your fixed expenses, which include costs that stay the same from month to month. Some of your fixed costs include:

• Rent
• Car payment
• Health insurance
• Tuition
• Internet bill
• Cell phone bill
• Car insurance
• Subscriptions
• Next up, it’s time to consider your variable expenses, which include costs that change from month to month. Some of your variable costs include:
• Groceries
• Clothing
• Gas
• Dining out
• Travel
• Entertainment

If possible, focus on keeping your fixed costs low. After all, paying a few hundred dollars less in rent and living expenses locks savings into your budget. From there, you can adjust your variable costs to further lower your expenses.

Don’t forget to include contributions to your savings as part of your budget. It’s okay if you only save a little bit at a time. The important thing is to build the habit of saving, and your funds will grow over time. For example, if you want to build an emergency fund for unexpected expenses, setting aside $20 per month in your savings account is better than not saving anything at all.

If you can keep your costs low now, your future self will thank you.

Use A Budgeting App To Stay On Track

With your income and expenses accounted for, it’s time to stick to your budget. While you can budget with a pen and paper or a spreadsheet, it’s often easier to stay on track with a budgeting app like Rocket Money^℠. With a budgeting app, you can seamlessly track your income and expenses to ensure you stick to the budget and make smart financial decisions.

Don’t be afraid to make adjustments to your budget along the way. For example, you might discover that you have to spend a little bit more on groceries than you anticipated, meaning you’ll need to shift your budget around to account for the increased expense. On the positive end, you might be able to move to a cheaper apartment, which can help you save on your fixed costs and create more wiggle room for other financial goals.

Budgeting Tips For College Students

As you build out your college student budget, use the tips below to optimize your financial situation.

• Find free entertainment. You don’t have to spend much to have fun as a college student. Look for ways to enjoy free activities on campus. For example, you might find free admission to college sporting events or free concerts at local hangouts, or you can research various clubs for activities.
• Tap into student discounts. Many companies offer student discounts, which can help you save money on most purchases. For example, many theaters offer discounted movie tickets with your student ID and some streaming services will offer a cheaper rate if you sign up with your college email address.
• Use your credit card responsibly. While opening credit cards in college can help you build credit, it’s important to only spend what you can afford to cover with your bank account. Otherwise, you could get stuck paying a significant amount in credit card interest payments.
• Find free resources. College students can tap into free resources on and off campus to cut costs. For example, you can often find free food events on campus or you could use the college’s gym to avoid paying for a gym membership.
• Shop around for big purchases. A little bit of shopping around can go a long way. Facebook Marketplace is one place to find free or cheap items you might need, like a nightstand or a table to furnish your apartment.

Budgeting for college students often focuses on cutting back on unnecessary expenses and prioritizing the essentials. Regardless of how you budget, the saved funds can go a long way toward covering your monthly expenses and lowering your student loan debt burden after graduation.

The Bottom Line

Creating a college student budget can help you manage your money efficiently and avoid overspending during school. Not only can this help you stay afloat throughout your college life, but it can also help you minimize your total expenses and the student loans you’ll have to pay back after graduation.

If you want help building and managing your college budget, sign up for the Rocket Money app today to get started.