College Budget Guide
For a college student, budgeting might seem daunting — after all, only 41% of Americans do it — but a budget should be a part of a student’s life. Not only do students need to budget for big expenses like tuition, fees, and textbooks, but also for costs like housing, food, and transportation. Creating a budget while in college provides you with the opportunity to establish good spending habits and to put away money for unexpected expenses.
Students in social work must plan to take on those transportation costs, and budgeting offers a way to do so responsibly.
Most social work programs require students to complete in-person practicum hours through internships that generally do not pay and may require commuting. Students in social work must plan to take on those transportation costs, and budgeting offers a way to do so responsibly.
This guide will help you understand the basics of creating and sticking to a budget in college. You’ll learn more about financial terminology, tracking spending, budgeting apps, and tips for cutting costs while in school.
Featured Programs in Social Work
Getting Started
Budgeting Terminology
Total Income
Your total income includes the amount of money you have when you begin school; that means any financial aid you receive and funds you might earn from a paycheck.
Monthly Income
Your monthly income includes recurring funds you might receive, like from a regular job. This amount might vary or fluctuate depending on how much you work.
Discretionary Income
When calculating a budget, consider your discretionary income to be your spending money, or any money not saved or spent on bills or essentials.
Essentials
Essentials include anything you need to live and to succeed in school (e.g., groceries, housing costs, tuition, and school fees).
Nonessentials
Nonessentials include goods and services you can live without, and other kinds of personal expenses (e.g., subscriptions to streaming services, and concert tickets).
Fixed Expenses
Fixed expenses — like rent, car insurance, and cable/internet — cost the same amount each month.
Variable Expenses
Variable expenses may fluctuate or change from month to month. They might be nonessential or essential, like the amount you spend eating out or the amount you spend on groceries.
Emergency Funds
Keeping a savings or “rainy day” fund provides the security you need should an emergency arise (e.g, hospital bills and ar insurance deductibles).
Track Your Spending
Experts recommend a 50/20/30 rule when planning a budget. This means 50% of income should go towards essentials, 20% to savings, and 30% towards personal expenses and nonessentials. This rule should act more as a framework than a strict guideline since many people, students especially, might find it difficult to stick to these proportions.
Maintaining Your Budget
Even once you establish your budget, you’ll want to keep it updated and reassess it now and then. After all, your financial needs, goals, and strains will change and shift over time. When adjusting your budget, go back through the same steps you took to create it: Look over bank statements, categorize your spending, and total your amount of discretionary income. Compare this new list to the one you made previously, and see where any changes might have arisen.
If you notice your discretionary income is lower than before, consider reevaluating your budget and thinking about where you can cut expenses to balance out your spending. Also update your budget whenever a financial change occurs in your life (like a new job or starting a new academic year), or every six months.
Budgeting Tools
- Left to Spend This app lets you know how much you have left to spend as you make purchases. It provides a way to monitor daily spending of discretionary income.
- Microsoft Excel Microsoft Excel offers spreadsheets to track different types of spending. Fortunately, pre-built spreadsheet templates exist to help those who do not know the program very well.
- Mint Mint allows users to connect their actual bank accounts from just about any bank or financial institution in the United States. The app then offers all kinds of financial monitoring tools, including bill tracking, budgeting, credit score monitor, and alerts on spending.
- Personal Capital Personal Capital provides an easy-to-use interface that allows users to monitor their finances in one place, set budgets, plan for retirement, and set up and manage investments.
- Simple.com Simple offers FDIC-insured checking accounts that come with a number of useful and free financial tools. The accounts cost nothing, and have no hidden fees. Customers have access to budget planning, spending alerts, and a tool that lets customers know if it is “safe to spend” based on their normal cash flow.
- Wally Wally provides a simple way to examine your incoming cash and outgoing expenses. Users can store photos of receipts, monitor spending, and evaluate and establish a budget that works for them. The app aims to help users better understand where their money goes.
- YNAB YNAB or “You Need a Budget” offers a unique and detailed interface for users to track finances and spending. YNAB allows users to link bank accounts, track saving goals, and even pay down debts. YNAB offers both a desktop and mobile version for users to track on-the-go.
Tips for Cutting Costs in College
Adopt Healthy Spending Habits
Adopting healthy spending habits in college can provide a strong financial foundation for your life after school ends. While in school, stay mindful of your spending. Use tracking apps and bank alerts to let you know when you have spent too much. Use credit cards responsibly, i.e., for building credit. Fortunately, resources exist for spending and habit tracking, like Spending Tracker, Habitica, and Slice.
At-Home Meal Preparation
Did you know that those who eat out for lunch spend about $10 per day, amounting to an average of $2,500 per year, while those who bring lunch from home only spend about $6.30 per meal? Preparing your meals at home is an easy way to save money and cut costs. Many people even choose to prep meals for the entire week, making every morning a breeze. A number of great meal-planning apps exist to help you save time and money when planning and preparing your meals. For occasions when you do go out to eat, apps like CheckPlease Lite offer a simple way to split a bill and calculate a tip.
Use Student Discounts
While being in college certainly comes with its costs, it also comes with a few budget-friendly benefits. Students can take advantage of student discounts; some colleges and universities provide a list of available discounts for students with student IDs. Check with student organizations and campus resources to find out more information on these discounts.
Find Inexpensive Textbooks
Textbooks often incur pretty high costs. Rather than buying new books, look for used books, e-books, or rental options through the school library or bookstore. Take advantage of the growing number of online used book retailers, including StudentRate Textbooks and Textbook Me.
Graduate Earlier
The less time you spend in college, the less money you’ll have to spend on things like tuition, fees, and textbooks. Also, the quicker you graduate, the sooner you can enter your chosen job field and potentially begin earning more money with your degree. If possible, consider increasing your credit load each semester. This can put you on the path to earlier graduation, which can save you money in the long run.
Additional Resources
- NerdWallet NerdWallet provides a range of useful resources, from choosing the right credit card to setting up a budget.
- Debt.org College Budget Debt.org offers a number of methods for budgeting and saving while in college, as well as links to scholarship opportunities to help you save even more.
- Federal Student Aid – Creating Your Budget The FAFSA website provides useful tools for college students, including budgeting guidelines designed specifically for them.
- Consumer Reports – Money 101 for College Students Consumer Reports offers useful and easy-to-follow tips and tricks for creating and maintaining a budget in college.
- PocketBudget Another useful budgeting app, PocketBudget displays your budget in the form of a pie chart, as well as a list of your daily transactions, allowing you to keep track of your budget a quick glance.
- Venmo Venmo, powered by PayPal, provides a simple way to send and request funds from anyone, regardless of their financial institution. It also tracks your transactions and sends a monthly statement.