How to Budget as a College Student

Attending college will teach you a lot, like how to push through a tough stats class, balance a busy schedule, and discover more about who you are as a person. However, one major life skill often gets left out of your required courses: how to manage your money. Keep reading to learn how to build a college budget and why it matters more than you might think as a student.

Why budgeting matters in college

With everything going on in college, financial literacy can take a back seat. You might wonder: is budgeting really that important? The short answer is yes. A budget isn’t just another assignment to check off your to-do list. It's a tool to help you take control of your money. It enables you to plan where your cash goes, so you’re not scrambling when surprise expenses pop up (like expensive textbooks or last-minute concert tickets).

As you begin managing your finances, it may be easy to spend more money than you realize. A budget helps you stay in control, save when you can, and enjoy the college experience without constantly stressing over the balance in your savings account. 

Creating a budget

Once you understand the importance of budgeting, you can begin creating one. There are many different budgeting methods, but the best one is one that you can commit to. Many students find that the 50/30/20 rule (50% of your net income goes to needs, 30% to wants, and 20% to savings) is helpful when learning to budget. No matter which method you’ve chosen, you can record your budget in a simple spreadsheet, use a handy budgeting tool, or download a beginner budget template to help you get started.

Know your income

First, you need to know how much money you make in a typical month. Your monthly income might include paychecks from your part-time job, financial aid, work-study, contributions from family, or any random side gigs. If your income changes from month to month, take the average from the last three months. For example, if you earned $400 in month one, $575 in month two, and $525 in month three, your average monthly income would be $500. 

List and categorize your expenses

After you’ve found your monthly income, you can start adding up everything you spend money on each month. It may be easiest to start with fixed expenses – costs that stay the same every month – like rent and utilities. Then, you can list the expenses that change, like gas, groceries, shopping, etc. Just like your monthly income, you can estimate the average for the last three months for each of your spending categories. Some categories you may have in your budget are education, housing, food, transportation, health & wellness, savings, and entertainment. While this is a good list to get started, ultimately, it’s up to you to decide. 

Find the difference

Once you know how much money you’re making in college and how you will spend it, you’ll be able to find the difference between your income and expenses. If you are spending more than you make, you may need to cut back or look for extra income. If you have extra money after covering all of your monthly expenses, then try building an emergency fund or doing a fun savings challenge. 

Reviewing and making adjustments

Congratulations on making your first college student budget! While it seems simple enough, the real challenge is sticking with your budget over time. You don’t want to just “set it and forget it”. You’ll want to check in and regularly adjust when your financial situation changes, like when you land a new job or have a more intensive class schedule.

Track your spending

Having a limit for each spending category is great, but actually monitoring your spending throughout the month is key. It’s recommended to sit down once a week and go through your expenses. Each week, you can look at what you spent on stuff like boba, takeout, clothes, and subscriptions. Use a spreadsheet, budgeting app, or notebook to track your spending, and compare your credit card statements to your budget, as well. By tracking every expense, you may be surprised to see where your money is going and where you can cut back. 

Decrease expenses

If you’re constantly dipping into your savings to cover your monthly expenses, it’s probably time to cut back. There are many ways to save money in college, but some ideas include sharing streaming services with your roommates, looking for student discounts, and searching for free events around campus. While you can’t plan for everything, you do have control over a lot of your spending.

Increase your income

Some expenses, like rent and food, aren’t as flexible on a monthly basis. If cutting back isn’t enough, you may need to boost your income. You can do this by picking up extra hours at work, starting a side hustle, or working during summer break. Selling stuff online may be another way to clear clutter and make money. Whatever you decide on, make sure you're still making your education a priority. 

Setting yourself up for success

Now, you know a budget isn’t a project you can submit and never think about it again once the academic year ends. You’ll want to build the habit of budgeting to set yourself up for financial success in the future. Following budgeting tips can be especially helpful when deciding to make a larger purchase, like buying a car or home. But it also helps now, in day-to-day college life. 

Save for emergencies

It’s important to have an emergency fund in college because unexpected expenses can pop up all the time. Maybe your car breaks down the week before finals or you crack your phone screen (again). Perhaps you have dental expenses that your student insurance doesn’t fully cover. Whatever the emergency, setting aside $10-20 a month can add up and save you stress in the long run. 

Set financial goals

Goals give your budget purpose and make it more fun. Whether it’s purchasing a new laptop or tablet, reducing your student loan balance, or saving up for a move after graduation, having something to work towards makes budgeting feel more rewarding. When you know what you’re working toward, it’s easier to say no to the things that won’t serve you in the future. 

Celebrate your achievements

Every time you stick to your budget or make progress with your money management, you should celebrate. Some examples of financial achievements to recognize are successfully staying within your food budget for the month, avoiding a trendy impulse buy, or finishing a fun savings challenge. Treating yourself in a budget-friendly way, like a chill movie night or favorite snack, can keep you motivated. Small wins build confidence and momentum on your financial journey.

Budgeting might not be a class on your schedule, but it’s one of the most valuable lessons you’ll learn in college. Getting in the habit of managing your money now will make adulthood less overwhelming later. Remember, you don’t have to be perfect, and you definitely don’t need a finance degree to make smart money moves in college. You just need to start with a budget and take it one step at a time. Your future self will thank you!