Student working in dorm room

How To Create And Use A College Student Budget

Hanna Kielar7-minute read
UPDATED: July 08, 2021

There’s no doubt about it: Earning a college degree is expensive. In fact, according to, in-state tuition and fees at public 4-year schools averaged $10,560 during the 2020 – 2021 school year, while average out-of-state tuition and fees at public 4-year institutions rose to $27,020 during the 2020 – 2021 school year. Private schools can soar higher.

Add housing, food, books, entertainment and what’s commonly known as “incidentals,” and the price tag shoots up to be anything but incidental. That’s why money-saving advice for university students is more important now than ever before. Check out our useful tips on how to create a college student budget that earns the degree without sacrificing fun along the way.

Why Is It Important To Save Money In College?

Well, most college kids can understand that a money-saving plan for students will put you on the right financial path. Whether you’re paying for college yourself or you have some help, most college students find themselves strapped for extra cash.

And while taking out student loans to finance your education might be a smart long-term strategy, it means that you’ll have an extra obligation when you graduate. That’s why the more you can save while you’re in college, the better off you’ll be when you enter the “real world.”

And let’s be honest, acclimating to a stricter lifestyle (even if your parents are generously financing part of it) will help in the future when you contemplate an entry-level salary and a stack of monthly bills.

Unfortunately, many college students don’t have the skills they need to understand how their college spending situation might affect them. The need for better financial knowledge has not gone unnoticed. Just recently, the U.S. Department of the Treasury released a report on behalf of the Financial Literacy and Education Commission recommending mandatory financial literacy courses for college students. But until that comes to pass, it’s up to students to fully understand the answer to the question, “Why is it important to save money in college?”

How To Make A College Budget

As you start on your path to “adulting,” you’re learning a lot of life skills for the first time including how to do laundry, how to manage your time and how to budget your money.

Building a standard money-saving plan for students can be challenging given that most families handle tuition and college-related expenses differently. However, these general guidelines can be adapted to specific situations and represent a good start to budgeting even after college.

  • List out all your fixed bills: These are things like your tuition, housing, insurance, cell phone bills, car payments and any other costs that recur month after month.
  • Track your discretionary spending: These are all the “other” categories that include items such as clothing, entertainment, health and beauty, food and the like.
  • Use an app or spreadsheet to find opportunities to cut back: The best budgeting apps for students, like Mint and Wally, help you effortlessly track your budget and expenses on your phone. Otherwise, you can use an old-fashioned notebook or spreadsheet. Don’t forget to check your Venmo or any other peer-to-peer payment apps each month to see how those few slices of pizza can add up fast. The goal is to see where your money is going so you can identify areas ripe for cutbacks.
  • Create a savings goal: It’s hard to imagine actually saving money while in college, but it’s a smart habit to start. And you can make the goals more short-term, such as saving for a new laptop or even a spring break trip, even though it’s never too early to start contemplating a home purchase or even retirement. It’s also wise to start an emergency fund so you can swing an expense like an unexpected plane ticket home or a textbook that you didn’t know you needed.
  • Monitor regularly: You can’t just expect to set a budget and then forget about it. Make a date with yourself to sit down weekly (or at least monthly) to dig into the details and make sure you’re on track with your budget.

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How To Save Money In College

There are some college students who don't seem to have enough money to pay for food, and yet it seems that some others have all their bills covered. In most situations, the truth is somewhere in between.

But the fact of the matter is that every college student can find places where they can cut back. Here are 10 money-saving tips for students for you to read through and find the ones most applicable to you and your budget.

1. Use Student Discounts

From J. Crew to Apple, many retailers will offer a discount just for showing your student ID. Others might need a college email address (that ends in .edu) for online shopping. One popular program is Amazon’s Prime Student, which gives you a 6-month free trial and then future discounts. Just make sure not to let the bills pile up as you take advantage of free shipping.

2. Find Free Entertainment On Campus

If your school is a football powerhouse, you might need to part with some dough to get into the games. But most schools offer free admission to the majority of other sports, including gymnastics and baseball.

Your campus probably also offers a wide variety of speakers such as authors, political figures and comedians. It’s also worthwhile to check for on-campus movies or theater productions. Usually all it takes to gain free admission for these types of events is a student ID.

3. Dine On A Budget

The first place to start is by making the most of your meal plan if you have one. Even if your friends are all going out for pizza later, make a stop at the dining hall to fill up on salad or beverages. You can still indulge in a slice at the restaurant, but you’ll save money by not making a meal of it.

If you have an apartment, you should also learn to make a few simple, cheap meals like pasta or an egg frittata. You can even whip up dishes for your friends rather than meeting at a restaurant. And when you do go out, find places that offer discounts or that have a happy hour. Even if you don’t have a drink, the food is often offered at a great price.

4. Avoid Interest Charges

This is just money down the drain, and the sooner you learn that, the more money-savvy you will be. Avoid making charges on your credit cards that you can’t cover each billing cycle, and always pay your bills on time. Setting them up for automatic payment can help when finals time rolls around and your mind is elsewhere. As a bonus, responsible use of credit and timely payments can help boost your credit score, too.

5. Borrow What You Can

No, we’re not talking about money. But with anything else, don’t ever buy what you can borrow. Some dorms might provide cleaning supplies and outdoor equipment for rent from the front desk, but in other living situations, you could check with a neighbor before making a large purchase for an item you’ll only use sporadically. For transportation, look into services like Zipcar for times when public transportation won’t work for you.

6. Join Student Discussion Boards

Most schools have an online group (like Facebook) where you are liable to find free or cheap household items or even reduced concert tickets. Check it vigilantly and jump on a great deal when it shows up.

7. Watch Textbook Costs

Textbooks can be expensive, and the worst part is that sometimes a professor won’t even use the book listed in the course catalog. That’s why it can be smart to wait until class starts to buy books, as the instructor might mention that they won’t be using a specific text or that the information will be available online. If you do need to buy textbooks, consider renting or buying used books (and then, of course, reselling them when the course is over).

8. Ditch Gym Expenses

Avoid shelling out money for a gym or for fitness classes at a boutique studio. Many colleges have an on-campus facility that offers a wide range of equipment and group fitness options. Or, you can start a walking, biking or hiking club with fellow classmates.

9. Cut Back On Laundry Costs

Sure, you want to wear those black pants to the party tonight, but when you realize that you’re paying for a whole load of laundry just to wash that one item, you might think twice and plan a little better. Aim to only wash full loads, but also make sure you’re washing them correctly so you don’t inadvertently shrink or discolor a whole load of clothes. That can be a very expensive mistake.

10. Adopt A Minimalist Lifestyle

What do we mean by this? Try out the “less is more” aesthetic. The great news is that it’s very on-trend given current concerns about sustainability. Whether it’s dorm decor or an outrageous costume for a one-time party, think before you buy anything. Your wallet – and the planet – will be happy.

What Should I Do With My Savings?

If your college student budget has paid off, you might find that not only are you not spending as much, but you have extra money set aside for your savings. This is a great time to start practicing good financial decisions. Here are four smart options for your savings.

Create An Emergency Fund

As mentioned earlier, it’s always wise to have extra cash available in an emergency fund for unexpected expenses, such as medical expenses or a last-minute trip home. When you have a stash of money around, you won’t have to use your credit card and risk racking up interest charges.

Start Paying Off Your Student Loans

Check with your servicer, but you may be able to start paying a portion of your student loans while you’re still in college. That will not only put a dent in what you eventually owe, but it will keep interest from accruing.

Invest Your Savings

It’s never too early to start learning the basics of investing. Whether you choose to open a Roth IRA or buy stocks, make sure to do your research so you know you are making a wise long-term investment.

Save For A Down Payment On A House

You’ll be wanting to buy a house sooner than you can imagine, and every penny you put toward your down payment is less debt you’ll incur in the long run. The earlier you start saving for a future down payment, the easier it will be to put down 20% when you find your dream starter home.

The Bottom Line: Stick To Your College Student Budget

Feeling smart? You should! But real knowledge is about much more than book smarts. It entails making smart choices with your health, your time and of course, your finances.

Wondering how your current financial situation stacks up? Find out when you review your free Rocket Homes® credit report.

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Hanna Kielar

Hanna Kielar is a Section Editor for Rocket Auto℠, RocketHQ℠, and Rocket Loans® with a focus on personal finance, automotive, and personal loans. She has a B.A. in Professional Writing from Michigan State University.