Developing a College Budget: A Simple Guide for Students

Developing a college budget might seem like an overwhelming task, but with just a little time and organization, it can be a game-changer for your financial future. Whether you’re an incoming freshman or a continuing student, budgeting helps you stay on top of your finances, avoid unnecessary debt, and even save for fun stuff! Here’s a step-by-step guide to help you develop a solid college budget—no matter how much experience you have.

Developing a College Budget

Step 1: Decide on a Time Span for Your Budget

Do you want to budget for a month, semester, or academic year? A monthly budget is a great place to start because it allows you to adjust for fluctuating income and expenses, like a bigger utility bill in the summer or travel costs during the holidays. Keep in mind, some costs (like tuition or textbooks) are predictable, but others can catch you off guard. It’s important to build a budget that includes room for these seasonal or one-time expenses. Here’s a template you can use to start your budget from Going Merry.

Step 2: Talk About Money (Yes, Really)

Before college starts, have an open conversation with your parents or guardians about who’s paying for what. Are your parents helping out with tuition? Do you have a college savings plan or scholarships? Knowing where your money is coming from helps you get a clear picture of how much you’ll need to cover on your own. The sooner you know this, the easier it will be to plan your budget. You can also plan to sit down and review this great checklist template with your parents outlining your own family’s budget.

Pro Tip: Make sure you also understand how much your student loans (if you’re using them) will cost you in the long run, including interest rates. Curious about how much your monthly student loan¹ payments could be? Check out Earnest’s Monthly Student Loan Payment Calculator to find out!

Step 3: Estimate Your Income

Do you plan to work while in school? Many colleges offer flexible on-campus jobs that fit around your class schedule. (Get more information on work-study and how to find jobs while in school with this great article.) Or, if working during the school year feels overwhelming, consider saving up from a summer job to help cover expenses during the academic year. Even if you don’t think you need the extra cash now, it’s always helpful to have a cushion for unexpected costs.

Step 4: Know Your Expenses

College comes with more expenses than just tuition. Here are a few categories you should plan for:

Tuition & Fees: Always the biggest ticket item, but make sure to account for additional fees like orientation, tech, and graduation fees.
Housing & Food: Whether you’re living on-campus with a meal plan or off-campus with roommates, housing and food costs need to be accounted for. Some schools even require freshmen to live on-campus, so treat this as a fixed cost in your first year.
Books & Supplies: Expect to spend around $1,000 – $1,200 per year on textbooks. Want to save on textbooks? Consider renting textbooks or buying used to save money. Bonus tip: Ask your professors if older editions of the textbook are still OK to use.
Transportation: Commuting to campus? Factor in gas, public transit, or parking fees. If you need to travel home during the holidays, budget for plane, train or bus tickets.
Discretionary Spending: Dining out, social activities, or weekend trips will add up quickly. Be honest with yourself about what you plan to spend on non-essentials.

Step 5: Choose a Tool to Manage Your Budget

You don’t have to go at it alone! There are plenty of free budgeting tools to help you track your spending. Whether it’s a spreadsheet, pen and paper, or checklist like the one Going Merry provides, find a method that works for you. Some banks even offer budgeting tools through their mobile apps, which can automatically track your transactions.

Step 6: Create Your College Budget in 3 Easy Steps

1. Track Your Spending

Before school starts, get in the habit of tracking what you’re spending now. This gives you a sense of where your money is going and helps you spot areas where you can cut back. Budgeting apps are great because they link to your bank account, making it easy to see everything in one place.

2. Cut Back Where You Can

Once you’ve tracked your spending for a bit, review your habits. Are you spending too much on takeout when you already have a meal plan? Could you cut back on subscription services? The goal is to adjust your lifestyle so you’re living within your means—and maybe even saving a little.

3. Build an Emergency Fund

An emergency fund is key to financial peace of mind. Ideally, you want to have some money set aside for surprise expenses like car repairs or a sudden change in living arrangements. Just make sure you don’t dip into this fund for things that aren’t true emergencies (like an impromptu weekend trip).

Final Thoughts

Budgeting might feel tricky at first, but it’s all about building a habit. Start small, adjust as you go, and be mindful of your spending. The more control you have over your finances, the less stress you’ll feel—and that means more time to focus on what really matters: crushing it in college!

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

¹ Before applying for private student loans, it’s best to maximize your other sources of financial aid first. It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grants, and work-study opportunities. 2) Next, fill out a FAFSA(R) form to apply for federal student loans. Federal Direct subsidized and unsubsidized loans, excluding PLUS Loan for Parents and PLUS Loan for Graduate and Professional Students which require a credit check and a credit worthy endorser if the parent or graduate or professional student has adverse credit, do not require a credit check or cosigner, and offer various protections if you’re struggling with your payments. 3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2. For more information, visit the Department of Education website at https://studentaid.gov.

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Daniel Bod

Writer at Going Merry

Daniel Bod is a seasoned higher education professional with two decades of expertise in financial aid. He began his career at Hofstra University in 2004, after completing his Bachelor's degree from Stony Brook University in 2000, where he provided comprehensive financial aid support to families from diverse backgrounds. In 2007, he transitioned to LIU Post and advanced to Senior Assistant Director of Enrollment Services, dedicating over ten years to assisting students and families in various capacities. During his tenure at LIU Post, Daniel also earned a Master's degree in Childhood Education. Transitioning to St. George's University in 2019, he spent over four years focusing on the financial needs of medical students. Daniel excels in advising on loan options and empowering students and families to make informed decisions about educational finances.