College Budgeting: How to Save Money in College

College is often the first time students manage their own money, and learning how to budget early can mean the difference between graduating debt-free or drowning in credit card bills.

A good budget doesn’t just cover rent and ramen – it sets you up for a lifetime of financial success.

Learning how to manage overspending, late rent, and unnecessary shopping sprees are learning experiences that will carry into life after graduation.

Budget Your Way Through School

A simple way to learn budgeting is to set a weekly budget and see how close you come to estimating expenses accurately. If you run out of cash midweek and end up eating cereal for dinner, you’ll get a glimpse of what happens when you mismanage money in the real world.

Everyone needs to eat, especially college kids, and whether you choose to dine in or eat out, find ways to get the best bang-for-your-buck. Same goes for what college you choose, how much you spend on rent, and whether you need things like a car or cable TV. Does it make sense to take out more student loans so you can indulge in those “necessities” of college life?

Or should you use better judgment and live within your budget? The benefits of learning that in college will make life a lot easier when you’re on your own and having to support yourself without student loans or a check from Mom and Dad.

It’s easy to forget about a budget when you live off a seemingly endless supply of loan money, but remember, a loan is not free money. It’s debt. Six months after graduation, you start paying that money back with interest. On average, it takes 21 years to pay off student loan debt.

Setting financial goals is one of the smartest moves you can make while you’re in college. Short-term goals might include saving up for textbooks next semester, paying off a credit card balance, or building a small emergency fund. Long-term goals help you look beyond graduation: think about saving for a big post-grad move, paying off student loans, or even starting to invest for the future. When you get clear on what you want to achieve, it’s easier to make a plan, stay motivated, and avoid the temptation to blow your budget on impulse buys.

Nine Easy Ways to Cut the Cost of College

When it comes to saving money in college, every little bit counts – and the good news is, you have more options than you might think. From scoring discounts just for flashing your student ID to taking advantage of free money through FAFSA and scholarships, there are plenty of ways to slash your expenses without missing out on the college experience. Before you resign yourself to living on ramen noodles alone, check out these nine easy ways to cut the cost of college and keep more cash in your pocket.

Choice of School

Tuition and fees account for the bulk of a college student’s budget. Cost of attendance should factor into your choice of college.

The average cost of in-state tuition for public universities is around $9,000 compared to about $19,000 for out-of-state schools and $28,000 for private universities. Grants and scholarships can help cover some costs, but don’t rely on student loans to pay for tuition. Go to an in-state school and save more than 50% on tuition and fees.

Textbooks

Renting used textbooks will save you money and ease the headache of shopping around for books after the semester. Chegg.com lets you rent or buy textbooks cheaper than shopping at your university bookstore.

Housing

Research the price of on-campus dorms versus off-campus apartments and houses. The general rule of thumb is that if the college is in a big city like New York or Los Angeles, where rent is notoriously high, then it will probably be cheaper to live on campus. But for a small town like Gainesville, FL, it was 46% cheaper to live off campus than in University of Florida dorms.

Roommates

The easiest way to cut costs in college is to share expenses. Living with roommates can save you money on rent, utilities, groceries, and much more. Splitting rent and utilities can easily save you $500–$700 a month depending on where you live, and shared grocery runs and meal prep can stretch your budget even further.

Cable and Streaming

able TV can easily run you over $120 a month, but you can stream nearly everything you want for much less. Stick with one or two streaming services or look for student discounts from Spotify, Hulu, or Paramount+.

Transportation

Owning a car can cost over $12,000 a year once you factor in gas, insurance, and maintenance. Luckily, most universities have a bus system you can hop on, in addition to the city’s public transportation system. If you need something to ride around town, scooters are the most economical option. You can find a decent ride for $500-$1,200, and parking will never be an issue. Look for name brands like Yamaha and Honda for a reliable bike that will keep maintenance to a minimum and hold its value over the years. If you live on or near campus, pedaling a bicycle is the way to go.

Food

Cooking for three or four people is just as easy as cooking for one … and a whole lot cheaper! Plan to cook meals with your roommates and share the cost of ingredients. When you do eat out, look for deals. Look for apps that offer discounts and coupons for cheap restaurant meals.

Coffee

You could try to do without coffee, but if you have 8 a.m. classes then at least brew your own. It costs 51 cents to make your own coffee compared to at least $2 at coffee shops. That’s a savings of almost $550 per year.

Party Fund

It’s college, so you are going to go out occasionally. Just make sure that when you do, you aren’t spending money that you might need for more important things. Set aside a few dollars here and there to use for a night out, and put it in a party fund basket on your nightstand. Leave your credit cards at home, and only use cash from the party basket when you get to the bar. This will ensure you only spend as much as you can afford. Use apps like Happy Hours, UConnection, and Party Tutor to find drink specials near you.

Sticking to a Budget while in College

The challenge for college students is not making a budget; it’s sticking to it. The basic principle of budgeting is to never spend more money than you make. Otherwise, you run the risk of getting buried in debt that might be difficult to fill. Start by figuring out how much money you have and which college costs are fixed. These are numbers that shouldn’t change much over the school year.

To begin, you will need to list all your sources of income, including:

• Income you make from a part-time job, summer employment, or work-study.
• Funds from your parents.
• Student loans, grants or other forms of financial aid, including miscellaneous gifts of cash.

Some of your costs are fixed, which means the amounts don’t vary much and you know their due dates. For example:

• Tuition and fees.
• Room and board if you live on campus (rent and utilities if you live off campus).
• Books, equipment, classroom supplies.
• Car loan.
• Credit card accounts.
• Car insurance or health insurance premiums.
• Cable TV.
• Phone bill.

Once you subtract your fixed costs from your total income, you will know how much disposable income you have left for flexible costs, including:

• Snacks, drinks, groceries and eating out.
• Social and recreation expenses, such as movies and sporting events.
• Transportation, including car maintenance and parking fees.
• Personal expenses, including laundry.
• Health care, including prescriptions and co-pays.

Emergency Fund a Must in College

Hopefully, your estimate of these flexible costs does not exceed your available income and still leaves some money to put into an emergency fund or savings account. As the semester progresses, you will have to track all of your expenses and determine where you may be over or under budget. Remember that sometimes you’ll spend more than at other times. But if you continually review and modify your plan, every week at first and then every month, you can find ways to reallocate spending so that everything balances out over time.

By the end of your first college semester, you should have a very good idea of how much you can spend in each category and where you have room to maneuver. There are many budget templates available online that you can utilize for planning purposes, or you can simply make your own form in a spreadsheet program.

Don’t make the mistake of being blasé about your finances. Write everything down, and take your budget seriously. This is one test that you can’t afford to fail.