6 Tips for Budgeting Your Money in College

April 17, 2019

6 Tips for Budgeting Your Money in College ImageManaging your money in college isn't easy. For many students, college is the first time they have financial independence and responsibility. Sound money habits—like sticking to a budget—will save you from financial stress and running out of cash freshman year. 

Along with all the new responsibilities and freedom you'll have as a college student, you'll need to keep track of your money and understand how to budget your money in college. Whether your parents are paying for college or you are juggling the expenses, these six tips for budgeting in college can help.


1. Create a (Realistic) Budget Before You Leave for College

Creating a budget will be the last thing on your mind once you start college, so do it before the school year gets underway. Until you start living the life of a college student, it's hard to know how much things will cost and what your spending habits will be like. But do your best to estimate (using the college's Cost of Attendance as a guide), and revise your budget after your first month on campus.

Consider using a free budgeting template or app, or an Excel spreadsheet. Your budget should include:

  • Your monthly income. In college, your income usually comes from a combination of sources: loans, scholarships, grants, a job, and contributions from parents and/or your savings. Colleges usually disperse your loan and scholarship payments, taking what's required for tuition and fees and sending the rest directly to you, so you can pay for your remaining college expenses.
  • Your required spending. The amount you will spend on anything required for college and life (after tuition and fees). This includes your rent, books, room and board, cell phone service, laundry, prescriptions, etc.
  • Your optional spending. What you think you'll need for extras, like eating out, movies, concerts, travel, gaming, gifts, and so on.


2. Budget for Saving, Splurges, and Surprises 

You should also consider using your budget to save money as well. Factoring in a certain amount to save each month is a great way to get your savings started. You can then put the money towards an emergency fund, retirement fund, student loans, or other long term goals. The best time to start saving is now!

Opportunities come up and emergencies happen, so allocate some money for these in your budget, too. Do you want to travel over spring break? Add a "travel" category to your budget and set aside what you'll need to save each month to reach your goal. 

Also include cash in your budget for an occasional splurge on something you enjoy. That way, you're more likely to stay within your budget and not charge spontaneous purchases to your credit card.


Young happy couple reviewing their budget3. Track Your Spending 

Once you get to college, record everything you spend money on for an entire month. A mobile app will make this easier, but you can also save receipts or use a notebook. Once you see exactly where your money is going, adjust your budget as needed. 

It’s important to track your spending regularly to make sure you’re getting the most out of your budget, so repeat this process every few months. Don’t be afraid to add in or remove categories from your budget as time goes by. You want your budget to benefit you as much as possible, so keep it up to date! 


4. Review Your Budget—a Lot

Many financial experts say you should review your spending at the end of every month. You'll have a lot on your plate, but finding a way to fit in a regular budget review can benefit you significantly. Set a date in your calendar, or take time before or after a scheduled activity you never miss, such as a weekly study group or yoga class. 

Take a look at both your required spending and your optional spending for the week. If you are starting to run low on spending money, you'll need to cut back somewhere. Cutting back on any unnecessary purchases will help your budget work best for you.

The obvious place is your optional spending, but you might find ways to reduce your required spending, too. For example, switching to a cheaper meal plan or renting textbooks. See How to Stretch Your College Dough for more money-saving ideas.


5. Set up Direct Deposit

You can keep track of your money by setting up three bank accounts: a billing account, a checking account, and a savings account. Have the money you've budgeted for each category automatically deposited into these accounts. 

This way, you'll be less likely to tap into your savings account or spend money allocated for bills. When your checking account is empty, it's empty; there’s no way around an empty bank account. As for dipping into other bank accounts, you’ll need to be able to hold yourself accountable! 


Young college student using her credit card at a store6. Use Credit Cards Wisely

Credit cards can be a great and helpful tool during college. Not only can they help cover your expenses, but they also offer students a manageable way to build credit! Are you interested in applying for a student credit card? Apply for the 1FBUSA Student Credit Card today.

Use only one low-limit credit card and charge only things you purchase regularly and have budgeted for. Being a responsible credit card holder is very important. Make sure you’re not spending money you don’t have and make sure you’re paying off your balance regularly. Paying your bill in full and on time each month will prevent you from racking up fees and debt at a high interest rate.


Sticking to a budget won’t ruin your college life. In fact, it can help you finance all your college dreams! Living within your means can reduce stress and put you on the path to a sound financial future. 




🏡Prepare to reach your future financial dreams by reading 6 Smart Ways to Save for Your Future

💸Making a budget is tricky. Find a template to help in How to Create Your Budget.