Budgeting for College Students: How to Make a Student Budget

Posted: August 03, 2021 | Author: Kierstin Pitcher-Holloway | Read Time: 5 minutes

Budgeting for college studentsThe college experience is about education and growth, but not just academically. New students are required to learn many skills outside the classroom, like living with different roommates, meal planning and managing complicated school, work and study schedules. One of the most important skills a student can learn is how to make a student budget in college.

There is no age requirement for learning how to manage your money, and you don’t have to wait until you’re graduated with a career-sized income. The financial decisions you make, and habits you build in college can affect your whole life. So, here are three simple steps to start budgeting for beginners.

Three Steps to Start Budgeting as a College Student

1. Familiarize Yourself with your Finances

Make sure you are acutely aware of your income. It is critical to know just how much money you will have coming in each month. As a college student, this includes any scholarships, grants, stipends or family assistance you may have. Once you know this, it’s important to be familiar/aware of your spending habits, and understand the expenses you will have to cover with your allotted income.

Before you can accurately examine your spending habits, it helps to know the difference between discretionary spending and non-discretionary spending.

Discretionary spending is the spending that you can control and is largely dependent on your lifestyle. For example, you control how much you spend on groceries based on your diet, how many non-essential foods you buy, brands you purchase and types of grocery stores you frequent.

Non-Discretionary spending is spending that you have little to no control over. Expenses like medication, debt payments, and emergency repairs are considered non-discretionary.

Once you understand discretionary spending it is easier to understand the different types of expenses found within a budget. There are many different types of expenses, but a basic individual budget usually focuses on two main types of expenses: fixed and variable expenses.

Fixed Expenses are constant, meaning they don’t increase or decrease according to the payment period. Fixed expenses include things like rent, car insurance, debt payments etc. Most fixed expenses are considered necessary expenses, leaving very little wiggle room within the budget. However, some fixed expenses like monthly subscriptions or memberships, are discretionary, leaving the spender (you) with slightly more control over that portion of the budget.

Variable Expenses are things that can change payment-to-payment or month-to-month, like a hospital bill or gas/travel budget. Some variable expenses are necessities, some are not. For example, eating out isn’t a necessity, but the amount of money you spend eating out can change based on where and how frequently you eat out, making it a variable expense. Your electricity or heating bills can also vary depending on things like the weather and time spent at home but these bills are still necessities of life.

When first familiarizing yourself with your finances it can help to go through bank and credit statements from the previous month and sort the charges into different categories. These categories can be detailed or basic based on your needs as an individual. Basic categories might include two simple lists of discretionary or non-discretionary expenses, while more detailed categories can include entertainment, clothing, eating out, grocery and household expenses.

2. Set the Numbers

Remember Your Goals. Now that you are aware of your income and expenses it’s time to set the numbers for your student budget. When making this decision be sure to keep your personal financial goals in mind. Will you need to pay for an upcoming semester or a study abroad trip? Perhaps you’re hoping to build an emergency savings fund? Whatever your goals are, setting the right budget can help you reach them.

Decide what works for you. A popular practice is to budget by the 50, 30, 20 rule. In this rule 50 percent of your income is dedicated to necessities including most of your fixed expenses; 30 percent is then made available for leisure spending, leaving 20 percent for savings. However, as a student, you might find it necessary to dedicate a greater portion of your income to savings so you can pay for the upcoming semester’s expenses. Decide what numbers work best for you based on your individual needs and goals.

Write it Down. Once you’ve decided how you are going to divvy up your income, make sure to write it down somewhere. This can be in a notebook, your phone, on a refrigerator whiteboard or in an Excel spreadsheet. As long as it is somewhere you can easily use for reference.

3. Follow Through and Adjust

Track Your Spending. This is key to maintaining a budget. Tracking your savings and fixed expenses is pretty straightforward, but your variable expenses take a little more attention. At the end of the month review your spending to see where you were able to stay within the budget and where you weren’t.

Adjust. Changing your spending habits can be hard, but adjusting your lifestyle to better fit your budget is a great way to set yourself up for lifelong financial success. Take baby steps focusing on changing spending habits in the areas where you went over budget in the previous period.

Trial and Error. Don’t expect to find the perfect budget on your first attempt. Budgeting is a process of trial and error, and a budget that works great for one month might not be reasonable for the next. Don’t be afraid to adjust the numbers, or try new techniques.

You might find that you do better when using a pen and paper to track your spending rather than an app, or that you need to increase the amount you allot to grocery money. Whatever the situation, remember that your budget is yours and yours alone so don’t be afraid to make mistakes and do what works for you as a student.


Budgeting for college students is easier said than done, but hopefully these steps can give you the tools you need to create a successful budget. By developing simple budgeting skills while in college you’re setting the groundwork for lifelong financial success. For more financial information or personal financial counseling visit SUU’s Financial Wellness Office.

Tags: Financial Wellness Student Life

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