Beginning college is exciting. Not only are you starting the next chapter of your life, but you may also be moving out on your own. This may also be the first time you will be responsible for your finances, and knowing how to budget in college is an important first step.
Read on to find out more about budgeting in college, as well as to learn some great budgeting tools for college students.
Why is Having a Budget in College Important?
When you think of college, you may think about what major you will pursue and how your social life will unfold. It’s also important, however, to think about creating a monthly budget for your college expenses.
A budget can give you peace of mind knowing that you have enough money to cover your expenses. This is especially true if you are living on a finite amount of money, such as a scholarship, with no additional income.
Having a budget can also set you up for a strong financial future. 40% of college students carry a balance on their credit cards. If you are able to live within your means, you may not need to rely on credit cards to cover your expenses. You might even be able to graduate without credit card debt.
How to Budget in College
Ready to start tracking your spending and saving, but not sure how to start? Here’s how to write your first college budget:
- Review your financial situation
- Anticipate college expenses
- Keep track of spending and cut expenses where you can
- Think about the future
Review Your Financial Situation
Before you write your budget it’s important to understand your finances. You need to account for your income, any scholarships and any financial support from your family. If you’re planning ahead, here are a few questions to ask your parents before making your college budget:
- Do I have a college fund? Will we be taking out student loans?
- Will funds be provided monthly, every semester or once a year?
- Are there specific restrictions on how we can spend the educational funds?
- Are there any stipulations, for example, maintaining a high GPA?
- Does the money have to be repaid?
Once you have a good grasp on how much money you will be budgeting with, you can then think about how you will spend it.
Anticipate College Expenses
Budgeting in college will look different depending on different scenarios. Here are a few budget categories you should expect to cover while in school:
- Tuition and fees
- Housing and utilities
- Textbooks and school supplies
- Dining – either at home or with a meal plan
- Entertainment
- Clothes – both purchasing new clothes and washing machine fees if you won’t have a unit in your living quarters
- Personal care, for example, haircuts and toiletries
- Transportation and vehicle maintenance
- Miscellaneous – pet expenses, emergencies, etc.
Keep Track of Spending & Cut Expenses Where You Can
Once you have created your budget it’s important to track your spending. This will not only ensure that you have enough money to make it through the semester, but it will also help you figure out if there are budget cuts you should make.
You may realize after a few months that you under-budgeted for certain categories or have services you are paying for but no longer use.
Tracking your spending may also help you see you have extra money at the end of the month that can be saved up for the Spring Break trip you have been dreaming about. If you find yourself going over-budget each month, try some of the tips below:
Think About the Future
When you are budgeting in college, if student loans help cover your expenses, keep in mind that after graduation you will be paying off student loans. Only borrow the amount you need to cover your basic needs. If you have a job, try to save wisely so your loan repayment will be easier after graduation.
Budgeting Tools for College Students
There are many different budgeting tools for college students! Here are a few ways to track your spending and saving. Be sure to use the method that works best for you.
- Paper and pen: If you prefer to track your budget manually, then write it out! For many people, writing down savings and spending makes it easier to stay accountable.
- Excel or Google Sheets: If spreadsheets are more your style, create your budget for college in Excel or Google Sheets. This can be particularly beneficial because you can ensure that no math mistakes are made.
- Budgeting Apps: If you want some help with creating your budget and tracking your expenses, a budgeting app can be helpful. Some will also give you an overview of all your finances, including credit cards, so you can be more aware of all your spending.
Tips to Help You Save Money in College
If you are trying to cut expenses in college these tips could help you save money:
- Live with roommates: Housing will be one of your largest expenses aside from tuition. If you can live with roommates, it will help to lower your rent expenses.
- Buy used textbooks or rent them: Most school book stores offer used books to buy for classes, and others may allow you to rent books. There are also websites that allow you to rent and buy used textbooks. Either option could save you hundreds of dollars.
- Take advantage of your student ID: Using your ID is a great way to save money. Not only could it get you into events on campus for free, but you may also be able to score discounts at local restaurants or stores.
- Use cash: If you are trying to lower your expenses and not go over budget, try using cash for a month instead of reaching for your debit or credit card. Once the cash is gone, then your spending is done. This method can help you see how quickly you’re spending. Just be sure to keep track of your expenses so you can analyze which budget categories need improvement.
- Refinancing student loans: If you are using student loans while in college, it’s beneficial to think about ways to save on your loan payment. Once graduation comes, you will have to start budgeting for loan payments. Refinancing student loans could help lower your interest rate and your monthly payment.
Student Loan Refinancing with ELFI
If the burden of your student loan payments is too great, student loan refinancing with ELFI may help. To see how much you could save, use our Student Loan Refinancing Calculator.* On average, ELFI customers save $286 per month or will see $22,500 in total savings over the life of the loan.1
With ELFI, you can also prequalify in minutes to receive a personalized rate quote. If you’re ready to get started, you can begin the process here.
1Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 11/01/2021 and 12/15/2021. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.