College Budget Guide

As a teaching student, learning to manage your expenses while still enrolled in college is important. Students usually possess relatively limited funds and must sometimes adopt frugal spending habits to make their money stretch. Additionally, because life tends to grow more complicated financially after graduation, developing good spending habits as a student can make it easier to transition into supporting a family or buying a house later in life.

A budget represents one of the most effective ways to keep track of your spending; however, a recent study found that only 41% of Americans use a budget. – CNN

Although you likely have a good idea of how much money you have to spend, the best way to know for sure is to keep track of it by creating a budget. Budgeting forces you to tally up your income and expenses, helping you precisely monitor your spending habits and identify areas where you can cut back. Making budget cuts can help you better live within your means and save money for emergencies and future purchases.

Fortunately, creating a budget can be fairly simple. The following guide discusses helpful budgeting tips for college students, including some basic budget terms, the importance of tracking your spending, and ways to make sticking to your budget easier.

Getting Started

Budgeting Terminology

  • Total Income

    This amount represents the sum of all the money you receive during a year, including everything you earn and any financial aid you receive.

  • Monthly Income

    This figure corresponds to the amount of money you earn each month from working. If you don’t have a steady work schedule and your hours change from month to month, this amount can vary

  • Discretionary Income

    After deducting taxes, mandatory school-related expenses, and essential living expenses from your total income, your discretionary income is the remaining amount that you can spend or save.

  • Essentials

    These expenses relate to items and services you need in your daily life as a teaching student. This includes food, housing, books, internet access, and tuition.

  • Nonessentials

    Nonessential expenses relate to things you might want but that you can live without. Examples include movie and concert tickets, eating out, and fraternity or sorority dues.

  • Fixed Expenses

    These recurring living expenses cost the same amount each month. Examples include your rent, cell phone bill, and car insurance.

  • Variable Expenses

    These monthly expenses vary from month to month depending on what you do or purchase. Typical examples include dining out, entertainment, and gasoline.

  • Emergency Funds

    These funds consist of the money you set aside for unexpected financial needs, such as medical emergencies, repairs, or unplanned travel.

Track Your Spending


Assess Current Financial SpendingThe first step in creating a budget is to analyze your current spending habits. You can do this by logging in to your bank account online and getting copies of your last few monthly statements. Using these statements, make a list of everything you spend money on in an average month as well as the amounts you pay.
Categorize ExpensesCategorize the items you listed as “essentials” or “nonessentials.” Things you can’t change or do without represent essentials and typically include fixed expenses like housing payments, car payments, insurance, tuition, and/or student loan payments. They may also include necessities like utilities, transportation-related costs, and your meal plan or grocery bills. As a student, books, internet, and class materials may also count as essentials.
Do the MathAdd up the cost of your essential items for an average month and subtract this figure from your monthly income. This remaining amount equals your discretionary income, which is the money you can spend on nonessentials, put into your savings account, or use to pay off debts.
Create Your BudgetAs you create your monthly budget, consider how much discretionary income you have to work with. If this figure is a negative number, it means that you regularly spend more than you make in a month. To avoid going into debt, you can pick from two options: increase your income or decrease your spending. While you may be able to work a few more hours every week, you probably can’t increase your income significantly if you already rely on student loans. Thus, you should look carefully at your expenses. Examine each item and think about less expensive ways to get what you need. Even essential costs can be reduced. For example, can you find a less expensive phone or internet plan? Could meal planning help you save money on food? Refer to the “tips for cutting costs” section below for more ideas. Once you figure out what you should spend each month, this list of expenses becomes your budget. When creating your budget, consider the 50/20/30 rule recommended by budget planners. Half of your income should go toward essentials, 20% should go into savings, and the remaining 30% can go toward nonessential personal expenses. However, this framework serves as a general rule of thumb; your budget may not meet these guidelines exactly, especially while living as a student.

Maintaining Your Budget

Think of your budget as a tool you can use over the course of a semester or for the school year — a period of time when your income and expenses shouldn’t change significantly. Do your best to avoid revising your budget too drastically, although you may need to make some adjustments at first to make sure your plan is realistic. Also remember to continue tracking your spending habits and review your budget each month, totaling your income and expenses and checking that they fall in line with your budget. If not, think about what other changes you could make, either to your budget or to your spending. Because your budget is a living document that reflects your current financial circumstances, consider updating it once or twice a year.

Budgeting Tools

  • Left to Spend This simple budgeting app allows users to enter data and establish a daily spending limit. The app keeps a running total of outgoing expenses; whenever you spend money, you open the app and enter the expense.
  • Microsoft Excel Blank spreadsheets in Microsoft Excel (or Google Sheets) can be used to easily create a budget for college students. You can set up formulas to track your income and expenses. Rather than creating a budget spreadsheet from scratch, many online sources — such as — offer budgeting spreadsheets for free. You can tailor these flexible spreadsheets to fit your specific needs.
  • Mint This powerful financial app is available for free and works on many different devices. It allows users to track spending, establish savings goals, create budgets, and set up automatic links to most financial institutions. Once you set up, sync, and categorize expenses in your account, Mint notes your transactions and correctly categorizes future repeat transactions.
  • Personal Capital This tech-based company offers software to help manage your financial portfolio as well as personal advising on how to best handle your money. Advisers can help build a useful budget, allowing users to track their spending habits by date, merchant, and category.
  • Simple provides users a no-fee checking account that contains tools for budget planning. After entering your bills and scheduled expenses into the system, you can track how much money you have left to spend over a give time period. You can also put money into a digital envelope to save for something special.
  • Wally Wally is a free budgeting app that lets you compare your income to your expenses. It helps you better understand your spending habits. Wally does not link up to any of your actual financial accounts.
  • YNAB This personal budgeting software offers new users a 34-day free trial period. Individuals can import all of their financial data to track their budget.

Tips for Cutting Costs in College

Adopt Healthy Spending Habits

College is an important time to develop healthy spending habits as you gain more financial responsibility. Having a credit card and paying off your balance each month helps build your credit. Additionally, tracking your finances tells you where your money is going so you can make changes to avoid getting into financial trouble. Budgeting apps for college students and online resources such as Spending Tracker and Habitica can help you track your spending and develop better habits.

At-Home Meal Preparation

Eating out can be fun and convenient, but it tends to be more expensive than cooking at home. Planning your meals weekly and making them at home is a relatively simple way to save money. For example, those who pay $10 going out to lunch daily spend an average of $2,500 a year on lunches, while those who bring lunch from home spend only about $6.30 per meal. Meal planning apps can make grocery shopping and cooking easier. Additionally, when you do go out to eat with friends, apps like CheckPlease Lite can help you split the bill and avoid paying more than you should.

Use Student Discounts

Many businesses, services, and events offer discounts for students. Carry your student ID and ask about discounts whenever possible. Many stores and online retailers offer discounts, although they may not advertise these opportunities. Some places may require you to register for a student discount program. Additionally, student organizations on campus may offer discounts or information about which local businesses provide student discounts. Finally, look around on campus for free and inexpensive activities, like movies, concerts, and sporting events to reduce discretionary spending.

Find Inexpensive Textbooks

Books represent a significant expense for many college students; fortunately, you can find several ways to save on textbooks. For example, you can look for used books in your college bookstore or through online textbook exchanges. Additionally, ebooks can sometimes be less expensive than print books. You could also try sharing books with a classmate or see if your college library or any student organizations on campus offer book rentals. Compare prices and look for deals through online sources like StudentRate Textbooks and Textbook Me.

Graduate Earlier

Another way to avoid spending excess money on college is to complete your degree on time or early. College credits earned in high school can help you finish sooner and at a lower cost, as can credits earned through community college or online classes. Take your time to find the major that best suits you; switching majors midway through your undergraduate education can mean additional course requirements. Whenever possible, maximize the number of credits you sign up for, and try to take more than 12 credits each term, which is the minimum number to qualify as a full-time student.

Additional Resources

  • Tiller Users link their financial accounts with one of Tiller’s pre-designed spreadsheets. Information automatically updates every day, giving users an accurate picture of their finances.
  • Better Money Habits Bank of America, in partnership with Khan Academy, put together this website to teach individuals how to create a budget. The site also provides links to additional budgeting and financial information.
  • Federal Student Aid This government website provides detailed instructions on how to create a budget for college students. It also suggests example expense types students should consider when budgeting.
  • Pocket Guard After you enter your income and expenses, this app automatically builds your personalized budget based on goals you set. Users can then see how much money they have left to spend in a given time period.
  • Good Budget This budgeting app updates the envelope method of saving for expenses, allowing users to categorize, fund, and track categories of spending.
  • Toshl Finance This basic budgeting app is free and lets users track up to two financial accounts. Users can also upgrade the app to track unlimited accounts and turn on automatic synchronization.