Money Saving Tips When Budgeting for College Students

Learn some of the best tips for budgeting and saving money when you're a college student.

Money Saving Tips When Budgeting for College Students

College is the perfect time to start practicing smart spending, not only because most college students live on a rather tight budget, but also because it will prepare you for the “real world” afterward. Whether your parents are paying for most of your college expenses, you’re getting a job to pay for them yourself, or you’re planning to fund your experience with loans and scholarships, you’ll soon learn that even the little stuff counts. 

Here are some money-saving tips for how to budget in college so you can avoid going broke when you’ve got plenty of other things to deal with as a student.

Table of Contents

Why a College Student Budget is Essential

It is very important for every college student to follow some kind of budget. Whether you’ve taken out student loans or not, having a budget plan is key for all college students, both undergraduate and graduate. The cost of tuition and required fees for four-year colleges has continuously risen, nearly unbroken, year after year. According to the National Center of Education Statistics (NCES), the cost of tuition (in constant 2021-2022 dollars to account for inflation) for the academic year 2021-2022 was:

  • $9,596 at a four-year public college/university
  • $37,222 at a four-year private not-for-profit college/university

Another major expense college students must anticipate is the cost of textbooks. College textbooks can run the gamut from cheap to triple-digits. The real annoyance is that often one class will require you to buy several books for the course; so, even if each one of these individual books isn’t too expensive, they’ll add up. That’s why an essential part of budgeting for college students is to search for cheap places to buy textbooks online.

Luckily, by implementing a well-thought-out college budget, college students can stave off the financial pressures of going to college and help their parents as well in the process.

How to Budget in College by Creating a Spending Plan

Before heading off to school, create a budget worksheet. In order to create this budget worksheet, you’ll need to sift through and break down your sources of income. According to the Federal Student Aid Office, the sources of college students’ income are impacted by three factors:

  • Income from sources such as your pay from work, such as a part-time job or work-study job.

  • Income from financial contributions from family members.

  • Income from financial aid, such as scholarships, grants, work-study, and loans.

Once you have the sources of income broken down, make sure you organize it on a monthly basis. You can also do it on a semester basis, but monthly is especially useful if you receive income from a job or from your parents contributing since they likely get paid weekly or biweekly each month. If you understand how much income or college savings you have available, then you can subtract all college expenses from this income per semester. Make sure you leave some room for miscellaneous expenses and emergencies.

Categorize Your Expenses in Your College Budget

Categorizing your expenses is a key part of effectively budgeting for college students. When you can actually see where your money is going — perhaps, too much is going to take-out food or buying coffee in the morning, or a lot is going towards buying textbooks — it makes creating a college budget much easier to put together. 

To get started on categorizing your expenses, log into your bank account and download your account activity or bank statements. You can usually download this in the form of a spreadsheet, which is especially useful. From here, you can review your spending and income over the course of a month.

When reviewing your bank statements, you can then see a list of all the things you spend money on in a typical month and the average cost of each item. In a spreadsheet, label each expense in accordance with whether it is a “necessity” or a “want.” Also be sure to track each source of income and label them as well. This relatively simple process can do wonders for students trying to figure out how to budget in college.

When your expenses and deposits in your account are laid out before you in a spreadsheet, it becomes very clear where your money is going. Thus, categorizing your expenses is one of the best budgeting tips for college students to follow. With all your expenses categorized and added up, you can then create a spending plan that enables you to maintain a college budget in which your expenses don’t exceed your income.

Don’t Buy New Textbooks

College textbooks are very expensive and can add up to over $400 per semester, if not more. To cut these costs in almost half, find out early which books you’ll need for a class by contacting your professor. Then find out if the campus library carries it, or if the campus bookstore has the used version. If they do not, then you have time to search for the used version online, where you can find popular textbooks for a fraction of the cost of new ones, especially new textbooks from the designated college bookstore (which often is more expensive than regular bookstores).

One of the best budgeting tips for college students is to utilize textbook rental websites. Some popular websites for renting books are Chegg, TextbookRush, and BiggerBooks, along with many more. When you’re done with the class, you may even choose to sell your book back to the university. This is a wise choice if you feel you’re never going to need it again, and it’ll give more students the opportunity to save money as well. Another great way to deal with unneeded textbooks is to sell them online, which is very easy nowadays since so many of the cheap textbook websites that both allow you to buy and rent books also allow you to sell them.

Be Wary About Credit Cards

Many college students get bombarded with credit card offers and accepting them can be very tempting. While it is important to establish credit while in college, choose your card wisely, and try to limit credit card spending to emergencies only.

Choose the card with a lowest APR (annualized percentage rate, essentially the interest rate). Many companies advertise a 0% APR for the first 6 months to a year, but there is usually some fine print. In addition, interest rates after the introductory period may be very high. Make sure you understand the rules before accepting.

Limit your credit card spending to emergencies. This is perhaps the most difficult test of self-restraint – but frivolous spending is a big problem for students who graduate with thousands of dollars of credit card debt.

Don’t spend more than you can pay off each month. In fact, one of the better budgeting tips for college students is to treat your credit card spending like a debit card. Don’t spend more on your credit card than you have in your bank account. Your balance will continue to grow unless you pay the entire balance monthly. If you cannot pay the entire balance, stop using your card until you do – and make sure you pay the minimum amount on time to avoid bad credit. Don’t apply for store credit cards. Store credit cards usually have an unreasonably high APR rate and are unnecessary if you already own a regular credit card.

Research on what benefits the credit card you choose offers – with many credit cards offered by airlines you can earn frequent flyer miles. Some credit cards even offer cash back on purchases.

Eating Out Too Much Can Ruin a College Budget

If your social calendar includes going out to eat on a regular basis, beware of the costs. Going out to eat a lot can really burn a hole in your pocket, depending on how often and which types of restaurants you’re going to. If you feel that going out to restaurants with friends is unavoidable, there are a few ways to save some money. 

  • Instead of ordering a meal, have an appetizer and a drink. You can still enjoy the company of friends without ordering a full course meal. Have a snack before you go out if you have to.

  • Encourage your friends to eat cheaply. Some of the best restaurants are hard to find and are often less expensive than popular ones. Have some fun exploring new places and trying new foods. Most cities will have ‘best cheap eats’ listings.

  • Try to buy groceries and cook/eat-in as much as possible. It can be difficult to cook or eat-in when you live in a dorm room, but if you buy cereal foods at the local grocery store rather than eating at Starbucks each morning, you can save a significant amount of money.

Going back to your spending plan in your college budget, be sure to label expenses from eating out as “wants”. Getting take-out food is not a “necessity” unlike groceries and cooking them. With your spending on eating-out labeled and added up, it can really open your eyes to how much money it takes up.

Take Advantage of Student Discounts

One of the most overlooked perks of being a college student is the plethora of student discounts available at a variety of retailers, service providers, and entertainment venues. From software and tech companies to local eateries, many establishments recognize the financial constraints students face and offer special discounted rates upon presentation of a valid student ID. Students can save significantly on essentials like laptops, software suites, textbooks, as well as enjoy discounted cinema tickets, public transportation fares, and even gym memberships. Some retailers even offer student-exclusive promotions during back-to-school seasons, making it a perfect time to purchase necessities.

However, to fully capitalize on these savings, students must be proactive. Regularly inquire about student discounts in places you frequently shop or wish to visit. Join student-oriented discount platforms and apps that consolidate deals for easy access. Not only will these discounts lighten the financial burden, but they can also provide opportunities to explore, learn, and enjoy your college years without breaking the bank. Always keep your student ID handy, and never hesitate to ask if a discount is available; you might be surprised at just how much you can save.

The Bottom Line on Budgeting for College Students

While college is an exciting time for going out with friends, traveling, and enjoying the freedom to do whatever you want, understand that you’re living on a college budget. While you should enjoy yourself, you probably can’t do everything you’d like to. It’s OK to live like a student now, so that you don’t have to live like a student after you graduate.

Andrew DePietro

Author: Andrew DePietro

Senior Researcher, and Content Strategist

Andrew DePietro is a finance writer covering topics such as entrepreneurship, investing, real estate and college for BrokeScholar, Forbes, CreditKarma, and more.