college student budget

How to Manage Budget as a College Student

College students should manage their budget properly for financial stability during their undergraduate studies and also beyond. Degree-seeking students, particularly those with limited funds from their income and allowance, must learn to prioritize as well as make smart decisions to stay in college and minimize educational debt, too.

If you’re a college student, read on. We will discuss various budgeting strategies and also some tips and apps that can help save you from overspending and eventually paying off a lot of money after graduation.

Typical College Expenses

When choosing colleges, it’s not uncommon for high schoolers to consider the cost of attendance. To have a much better idea of the actual cost of working on an undergraduate degree, they subtract financial aid from the sticker price to obtain the net price, which college students actually pay instead of the published price.

However, there are many other things that college students have to spend money on. Besides tuition and fees and school supplies, there are also the likes of groceries, clothes and even booze.

Just take a look at the following breakdown of the average annual expenditures of an off-campus student:

ExpensesAnnual Cost
Tuition$19,806
One-bedroom apartment$16,596
Food$4,896
Entertainment$3,568
Transportation$3,540
Utility$3,060
Books and supplies$2,380
Groceries$2,000
Clothes$1,908
Coffee$1,116
Technology$980
Alcohol$500
Personal care$360
TOTAL$60,710

How Much Should a College Student Spend on Groceries Per Month?

The average cost of groceries for college students a month amounts to $250, according to the Education Data Initiative report. Off-campus eating is the largest monthly food expenditure of undergraduates without a campus meal plan — on average, they spend $102 per week or $408 per month eating off-campus.

How Much Does the Average College Student Spend on Laundry?

College students spend anywhere from $9 to $12 on laundry per week, or equivalent to $36 to $48 per month, according to the University Daily Kansan, an independent student newspaper of the University of Kansas. Since there are 32 weeks in an average school year, a college student’s laundry alone can cost $288 to $384 per year.

Budgeting Strategies for Students

In this part of the post, let’s talk about 8 different budgeting strategies that can work best for most students when preparing to go to college. Some of them may share the same or related principles, while others have a completely unique system.

Pay-Yourself-First Budget

The pay-yourself-first budget strategy, simply put, is all about saving college students themselves from experiencing a bleak future by making saving money and paying off debts a priority.

Every single time they get paid, undergraduates must immediately cast aside a certain percentage of it for savings and debt payment, getting these important financial responsibilities out of the way from the get-go.

Doing so allows them to devote the rest of their funds to other things, including the kinds they need to survive as well as those they need to feel happy and comfy.

Of course, it’s still important for any college student to budget their remaining money wisely.

After adding to their overall savings and warding off being neck-deep in debt, degree-seeking students should still be cautious as to where or how they spend their discretionary funds because, needless to say, they are not infinite.

Someone who is using the pay-yourself-first budget method may want to consider looking into other budgeting approaches (such as the ones we will talk about below, so keep reading!) and then see which of those makes it so much easier and more effective to budget the money remaining after taking care of their savings and debts.

Zero-Based Budget

The zero-based budget got its name from the fact that a college student’s monthly income should completely match what is going out of his wallet or bank account per month.

Needless to say, there needs to be justification for every spending done.

It’s true that this budgeting approach that college attendees may utilize usually comes with the tagline “give every dollar a job”.

However, it doesn’t necessarily mean that every dollar undergraduates have must be spent — other than needs and wants, portions of their income should also go to their savings account and/or retirement funds.

This means that the word “zero” in the name of the zero-based budget should not scare away degree-seeking students who want to put aside some money for rainy days.

It just means that there’s zero money unaccounted for — it’s just that every dollar is given a job to do.

Dave Ramsey Budgeting

At its core, the budgeting method designed by Dave Ramsey, who is a radio personality offering financial advice, is all about determining where every dollar a college student has should go.

Such needs to be done before the month (or all of the spending) begins.

The Dave Ramsey budgeting system all starts with writing down and adding one’s money from various sources such as a part-time job and freelance work.

Afterward, all expenses are itemized, including groceries, clothes, entertainment and travel as well as regular and irregular bills that need to be paid in the coming month.

When the total amount of expenses is subtracted from the total amount of funds is zero, it means that the individual knows where every dollar he or she makes goes. Otherwise, there is something wrong that needs to be rectified.

Due to the work involved, this strategy is more suited for students who have been budgeting for some time now.

Envelope Budget

College-level students who prefer to pay everything with cash rather than whip out their credit cards each time may find the envelope budget the ideal budgeting system for them.

So much so that it’s also sometimes referred to by some as cash-only budgeting.

However, most call it the envelope budget because it literally involves the use of envelopes: one’s money on hand is divided into all sorts of spending categories, and each one is placed in its own envelope.

For instance, there can be a grocery envelope, clothes envelope, school supplies envelope, dining out envelope, etc.

If one envelope runs out of cash, that’s the end of a college student’s spending for that particular category. However, he or she may choose to dip into another envelope and use some cash in it for an essential that has run out of budget.

The goal is to avoid raiding other envelopes as much as possible.

What happens to the remaining funds? Well, students can add them to the next batch of envelopes the following month or immediately put them in the bank to keep them out of harm’s way.

50/20/30 Budget Rule

The rules of the 50/20/30 budget rule are simple, and college students simply have to allot their money according to an order of importance, and the percentages are as follows:

  • 50% – needs
  • 20% – savings
  • 30% – wants

What’s really nice about the 50/20/30 budget rule is that it’s a pretty straightforward budgeting strategy.

As a result, it’s the go-to method of many college students who wish to keep their educational debt and the amount of time they will have to pay it off after graduation to a minimum.

But it’s important for any degree-seeking individual who likes to give the 50/20/30 budget rule a try to know the differences between needs and wants.

It’s a good thing that telling them apart is easy: needs are things one must have in order to live, such as food, room and clothes, while wants are things one wishes to have for comfort or out of desire.

70/20/10 Budget Rule

One look and it’s easy to tell that the 70/20/10 budget rule follows the same approach as the 50/20/30 budget rule — only that the percentages are different and it leads to slightly different results.

Additionally, it’s for certain types of college students.

Those who are into volunteering and doing charity works and donations could benefit the most from the 70/20/10 budget rule.

It’s because it takes into account the donations they make on a regular basis, and it’s made up of the 10% in the name of this particular budgeting strategy.

The 20%, meanwhile, is the same as the 50/20/30 budget rule: savings. The 70%, this time around, consists of both needs and wants, which warrants the student to make the necessary allotment of money and stick to the plan, too.

The 60% Solution

College students who find the 50/20/30 budget rule a little too restrictive and the 70/20/10 budget rule, on the other hand, a little too slack may consider giving the 60% solution a try.

The 60% in the name of this budgeting strategy is the central figure.

Simply put, the 60% refers to the amount of a college student’s money that should go into the needs. They include monthly bills — even bills for wants such as a costly phone plan or cable TV.

So, in other words, a little more than half of one’s budget ends up being used to pay for all the essentials and some wants, the kinds that have to be paid each month.

The remaining 40%, meanwhile, is divided equally into retirement, long-term savings, short-term savings and fun money, which means that each of them gets 10% of the remaining 40% of the funds.

With that, it’s obvious for whom the 60% solution is best: undergraduates who are already gearing up for retirement.

The “No Budget” Budget

Lastly, there’s the “no budget” budgeting strategy.

As the name suggests, this method requires no budgeting in a technical sense — a degree-seeking student spends money that he or she has on needs and wants as well as doesn’t spend money that he or she doesn’t have.

However, an important component of the “no budget” budget method is to keep an eye on one’s bank account balance.

This means that people who are counting on this particular system must make sure that there’s enough money in their savings and none of the money they have in the bank will be withdrawn to pay for needs and wants.

Even though the premise of the “no budget” budget is rather simple, it can be challenging for some college students to stick to, particularly those who have a hard time saying “no” to heading to the ATM to get some money.

But it can work to the advantage of those who are not fond of budgeting their money in the first place.

How to Budget Allowance for Students

College costs can be intimidating. Budgeting allowance for college-related expenditures to make ends meet can be more nerve-racking for any college student, especially someone who seems not to get enough funds regularly.

But by following some foolproof tips and tricks on how to budget one’s allowance, individuals who are working on an undergraduate degree can save themselves from the stress and anxiety of running out of spending money, thus allowing them to focus more on their studies and worry less on what to do should they go penniless.

Below are some smart allowance budgeting steps to take:

  • Write down the numbers – College students should be aware of just how much allowance they are getting per month as well as just how much money they spend per month. The goal is to determine whether or not more money is going out than going in. Without knowing the numbers, it can be easy for any student to go off-budget.
  • Separate needs and wants – It’s not just the numbers that matter but also the things that make those numbers go down. Since needs are must-haves, college students must prioritize them over their wants, which won’t really harm their dream of becoming bachelor’s degree holders in case they’re put on hold for the time being.
  • Plan ahead – College-related expenses tend to vary from month to month. Students who need to tighten the purse strings should set a budget plan before the month begins. They should consider activities or commitments that can have a considerable impact on their spending such as internships or going back home during special occasions.
  • Be with budget-conscious people – Nothing could drain a student’s allowance more than peer pressure coming from impulsive and careless spenders. So, one should choose his or her friends very well. While there’s nothing wrong with having some fun, a college student’s priorities should always be his or her studies as well as the future.
  • Develop self-control – Sometimes, it’s not the peers of college students that can influence them to spend more than they can afford but their lack of discipline and restraint. Knowing the differences between rewarding oneself and wasting money on non-essentials that can only bring temporary happiness is of utmost importance.
  • Have a savings account – It’s a good idea for undergraduates, especially those who know that college life is full of surprises, to have a portion of their allowance automatically go to the bank. Any extra money they have after considering all needs and even some wants counts, letting them have something to count on during emergencies.

Best Budgeting Apps for College Students

College students these days can install on their smartphones all sorts of apps that can help them stay organized, focused and productive.

They range anywhere from note-takers to PDF readers and from meditation guides to white noise apps. Then there are also all kinds of budgeting apps available for college students to take advantage of.

The following are some of the top apps for budgeting they may download to help them with money matters:

  • Goodbudget – Available for free but some in-app purchases are necessary, Goodbudget is a great companion app for college students who like the system that the envelope budget method discussed earlier. That’s because it replaces physical envelopes with digital ones, thus making for more secure and clutter-free budgeting.
  • Money Manager – The star feature of Money Manager is its spending tracker and budget planner, which can generate reports and inform users about their daily, weekly and monthly financial activities. Students can also upload pictures of the things they spend on. The app can be downloaded for free although some features have a price tag.
  • Pocketguard – Available for free although some of the top features are paid, Pocketguard is designed to keep track of bills and expenditures. It also alerts users of missed payments as well as suspicious spending trends. It’s great for students using the “no budget” method as it gives notifications on any leftover funds.
  • Wallet – One of the nicest things about Wallet is that certain features can be shared with family members, thus allowing for a collaborative approach to budgeting. It also has automatic bank synchronization. Like numerous other budgeting apps suited for college students, Wallet comes for free but certain features of it aren’t.
  • YNAB – Short for you need a budget, YNAB allows students to allocate their income to various expenses, from different needs to an assortment of wants. Due to this, it’s ideal for those who are confident with using the zero-based budget approach talked about earlier. It’s free but, as expected, users must pay to unlock certain tools.

Budgeting Tips for College Students

Other than getting good grades, it’s also essential that college students aim to succeed in their financial independence.

But with so many things to balance on and off campus, it’s something that’s commonly easier said than done. Different college students have different spending needs, which is why one budget may look different from the next.

Regardless, there are certain steps students can take to help them manage their finances better, such as:

  • Tracking spending – As far as budgeting goes, nothing is as important as determining all the things that all a college’s student money goes to. This way, he or she can have an idea of which expenses should be prioritized and which ones can be removed from the to-do list to avoid having zero budget and ending up with more debt than needed.
  • Spending below one’s means – While having total spending that’s completely equivalent to the income or fund is good, it’s always nice for it to be less than the amount of money a college student gets monthly. Looking for every single way to reduce spending is the key to having money left over at the end of every month.
  • Getting a job – College students who solely live off their monthly allowance should consider entering the workforce as they complete their academic programs — more than 40% of full-time students have jobs. Of course, like their funds, it’s also a must for students with jobs to balance their studies and work very well.
  • Using student ID or coupons – They may not be the coolest, but discounts through being college students and handing in coupons can help any undergraduate to stretch their budget. Needless to say, keeping the eyes peeled for deals, offers and specials is a wonderful way for college students to economize and save some money for the future.
  • Avoiding overbuying food – Nothing can flush money down the drain faster than buying perishables that may go bad before degree-seeking students get to enjoy them. Other than buying just about enough items each time, one should also stick to those with longer shelf lives. Taking leftovers when eating out with classmates is also wise.

Importance of Budgeting for Students

College students have to pay for a lot of things, from tuition and fees to room and board and from travel costs to personal expenses. According to a report by the College Board, the average undergraduate student attending a college in the US spends anywhere from 1,518 to 2,266 per month on living expenses alone.

Due to this, it’s important for college students to budget to be able to manage their finances better.

Proper budgeting allows undergraduates to stay in school as well as keep their educational debts to a minimum. Also, it helps them develop good financial habits that can prove to be beneficial for them during their postsecondary careers and beyond.


Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily represent those of the College Reality Check.

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