Budgeting 101 for college students

College is a time of independence, and for many, includes learning how to manage money on their own. A budget plays a vital role in avoid debt and aspire to the things you want to do in life. College students new to budgeting can check out these do’s and don’ts to get started.


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  • set some goals
  • budget around the goals
  • get down to business
  • determine bottom-line cash flow
  • set up a system to help you stick to the budget

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  • make it complicated
  • overlook the small stuff
  • neglect automated pay options
  • spend without keeping track
  • blow windfalls

[publishpress_authors_data]'s recommendation to ExpertBeacon readers: Do

Do set some goals

Students and parents can do this together. Whether goals are to study abroad, save to pay for the next term’s textbooks or grocery bills, or take a graduation trip, write them down.

Do budget around the goals

Instead of starting with dollars and cents, start with what you need and want to do. Then build around those. You’ll have a much better idea of what’s possible (maybe the planned graduation trip becomes one to Colorado instead of Switzerland, for instance) and a good idea of how to prioritize.

Do get down to business

Tally income and expenses. Add up all monthly net income (the amount left after taxes and other paycheck deductions such as health insurance) to determine how much you have to spend. Income may include part-time job income and/or allowances from parents.

Next, categorize your ongoing monthly expenses into fixed expenses (like rent), variable expenses that are “must-buys” (food, gas, medicine), savings, and finally, spending money.

Do determine bottom-line cash flow

Subtract expenses from income. If that number (your bottom-line cash flow) is negative or does not help your goals, do a “gut check” and find a way to either increase your income or reduce your expenses – no matter how hard it is. Then, at the beginning of the month, map out how you will spend your money in the coming month. That’s a budget.

Do set up a system to help you stick to the budget

Deposit all cash or checks as you receive them. Open all mail – including bills – as soon as it arrives. Pay each bill immediately upon opening, or use a bill-paying filing system. That might be a folder that sits on a certain spot of your desk, a basket on a counter or an online calendar. Choose what works best for you and then use it consistently.

[publishpress_authors_data]'s professional advice to ExpertBeacon readers: Don't

Do not make it complicated

Budgeting need not be complex. While computer programs are available (many free), an Excel spreadsheet or pencil and paper can work just as well.

Do not overlook the small stuff

Once you have a budget, take a close look to find out where your money goes and where you can cut back. It is very cliché to ask if the question, “Can I do without that expensive cup of coffee, and replace it with the free coffee at the student center (or part-time job location)?” But this is just the type of disciplined act that will get someone on the right track.

Do not neglect automated pay options

If responsible for monthly bills such as phone, utility or rent, check into automatic-pay options including online bill payment, often offered free today at many banks or credit unions (maybe including those on campus), and automated deduction plans. Many utility and other companies now have arrangements where they will withdraw funds directly from your bank account; this way, you can’t pay late. Some utility companies will provide a reduced interest rate or other rebate for use of their automated payment services.

Do not spend without keeping track

Now that you have a budget, start keeping receipts and a spending journal or log. Most college students are surprised to find just how much they spend each day and week on small items. Writing it down – just as writing down everything you eat when you are watching your weight – opens your eyes to your real spending patterns, helps you start to see where you can save, and helps you avoid getting into debt.

Do not blow windfalls

If and when you receive extra money (from unexpected overtime or a gift, for example), get in the habit of saving instead of spending the excess money. If you save it – in addition to the regular pre-determined amount – you’ll see your savings take off.


Learning to create and use a simple budget will help college students learn to differentiate between needs and wants, and in the process, learn lifelong skills that will ultimately lead to financial freedom.

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