It’s important to create a budget even outside of college. The way you spend money will impact your current financial well-being but also may impact your future if you don’t budget accordingly. This includes if you’ve applied for any student loans.

If you stay financially literate you can create a budget that helps you accomplish important goals on your journey to financial freedom.

Why Budget in College?

The average student leaves college with around $30,000 in student loan debt. The cost of college and total loan debt is increasing each year while other means of paying for college (grants, scholarships, etc.) are not increasing along with it.


Not only that but most college kids juggle credit cards while in college to pay for all the “little things” like food and leisure. According to EverFi, nearly 50% of college students have two or more credit cards with at least $1,000 of credit card debt by the time they leave college.

It’s important to start budgeting in college, and even before, as you’ll leave college with a large debt to your name that will likely take years to pay off. This debt can hinder personal growth, financial decisions like buying a car and can even hold you back from trying to get a high paying job as you settle for something that can just pay your bills.

When to Start Budgeting

It’s always best if you start budgeting before you go off to college. This will not only build good habits but it affords you the time to figure out the best way to budget. It may seem daunting but if you budget while in college you can set yourself up pretty well once you leave college.


The key to building a budget is to track everything. You should look to keep a ledger or download the latest mobile application to track your spending and saving habits. If you’re obedient with tracking then you can easily forecast your spending habits and make sure you have money when you need it.


Before you even begin creating your budget, you need to understand income and where you’re getting it from. As a college student, your income will most likely change based on these scenarios:

  1. Total loans accepted.
  2. Total scholarships/grants you used towards tuition and fees.
  3. Hours worked at a work-study or part-time job.

If you’ve accepted more aid than what your school bill costs then you’ll most likely get a refund check back with the surplus. This isn’t always the best and can drive people into tons of student loan debt but it is still income. Just because you get a refund it doesn’t mean you should always spend it. You can use the refund to pay for books or other education-related expenses to help save down the road.


As we review how to create a budget, some common terms to understand:

  • Total Income – includes any money you have or will receive while attending school.
  • Monthly Income – includes any recurring funds you receive each month.
  • Fixed Expenses – necessities that have the same price each month.
  • Variable Expenses – necessities or wants that do not have the same price each month.
  • Emergency Fund – money you’ve saved in the event a large bill or need comes.

Creating a Budget for College

As a college student, your goal should be to minimize the spending that isn’t necessary by also maximizing your savings. In order to do any of this you need to review your finances.


You can create a budget by following these four steps:

  1. Review your finances – you’ll want to access a bank statement for the last full month and create a list of all of your purchases.
  2. Categorize – you’ll want to identify each purchase as a necessity or want.
  3. Calculate Discretionary Income – you’ll take all of your necessary purchases and add up the total cost to you each month. You’ll take that value and subtract it from your monthly income, not total income. This number is how much you have to spend or save after you’ve paid all your bills.
  4. Create a Budget – Take the discretionary income you calculated in step 3 and use that to decide how you want to spend your money. If the number is negative then you need to cut back on some spending. If the number is positive then you have extra money to spend or save.

The above step plan is a very easy method to follow to manage your finances. You’ll want to do this each month to make sure you’re staying on track. You don’t want to add any more fixed expenses if you don’t have to. The goal is to make sure you end the month with a positive amount of discretionary income.


If you find that you are spending more than you earn it’s time to go through the want list and cut back on some spending. For example, if you’re spending $50 a month on video games that you don’t play or don’t need, that is an easy $50 to get back in your budget that you could use to help pay for college or even start building savings.

Sample Budget for College Students

Below you will find a sample budget for college students. Everyone’s budget will look different and may have more fixed expenses or less.

MonthlySemester (4.5 Months)
Part-Time Job$1,500$6,750
Grants/Scholarships (Refund)$125
Student Loans (Refund)$200
Misc. Income$50
Total Income$1,875$8,437.5
Fixed Expenses
Books & Supplies$25$112.5
Total Fixed Expenses$925$4,162.5
Variable Expenses
Eating Out$150$675
Misc. Expenses$50$225
Total Variable Expenses$375$1,687.5
Total Income$1,875$8,437.5
Total Expenses$1,300$5,850
Emergency Fund Contribution$100$400
Total Left (Savings)$475$2,187.5