A college budget doesn’t have to be complicated to work. In fact, the simpler it is, the better.
Here’s how to create a basic college student budget that will help you accomplish two things: One, you’ll be able to afford everything you need in school, and two, you’ll be ahead of the curve when you graduate, ready to budget for what you want in the working world.
Figure your projected income
Make a list of all of the income you expect to receive over the course of one academic year (for example, the 9 months you are in school during the fall and spring semesters). Include things like:
- Student aid (loans, grants, scholarships)
- Work-study income
- Wages from a regular job
- Support from your parents
If you saved up money the summer prior to the academic year and you plan to use it for college expenses, then include this in your projected income total, too.
Add up all of this income and divide by 9 (or however many months you will be in school). This figure represents your monthly income for the academic year.
Of course, if you don’t move home during the summer and support yourself all year long, then you’ll need to budget for the entire year. If that’s the case, you’ll need to divide your total income by 12.
Figure your estimated expenses by category
Make a list of all of the fixed and variable expenses you expect to incur over the course of one academic year. Below is a sample list of categories when considering budgeting for college students.
You’ll see suggestions for what percentage of your budget to spend in each category — keep in mind that these are suggested caps. Depending on what you need to spend in one category, you may need to spend less in another.
Tuition and fees
Look at your school’s cost of attendance for this figure. The average at a 4-year in-state school during the 2015-16 academic year was $9,410. (If you have student aid, you can expect funds to go directly toward tuition and fees before you receive your disbursement.)
- On-campus room and board
Look at your school’s cost of attendance for this figure, too. The average cost of room and board at a 4-year in-state school during the 2016-17 academic year is $10,440.
(If you have student aid, you can expect funds to go directly toward room and board before you receive your disbursement.)
- Off-campus housing
Ideally, you don’t want more than 30 percent of your income going toward rent or more than 10 percent going toward utilities and other household expenses.
Books and supplies
This figure will vary by class and major. The average at a 4-year in-state school during the 2016-17 academic year is $1,250.
This figure will vary depending on whether you have a car payment or not. Ideally, your car payment should represent no more than 10 percent of your income, and your car insurance and related expenses no more than 5 percent.
This figure will vary depending on your plan. The average monthly cell phone bill is $73.
Emergency savings fund
Aim to save 10 percent of your income for unexpected expenses.
If you live on-campus, meals are covered in room and board. That said, you should have a small budget for snacks, ordering in, and going out to eat now and then.
If you live off-campus, you’ll need to keep track of a full food budget, which should represent no more than 15 percent of your income.
This category should represent no more than 5 percent of your budget and include any fun you plan to pay for that’s not already covered under food (such as movies or concerts).
While you won’t be able to swing a new wardrobe, you can splurge on something new now and then. Just make sure it represents no more than 5 percent of your income.
This figure will depend on your mode of travel and how far.
Add up all of these expenses. If you used figures for the academic year, be sure to divide by 9 (or 12, if you are budgeting for a full calendar year). This will give you your monthly expense total.
Subtract your expenses from your income
Every month, you need to do one of two things — spend less than you earn or break even. Subtract your total estimated expenses from your projected income. If you’re in the negative, that’s how much you need to deduct from your college budget. Go through your variable expenses and cut where you can.
If you’re in the negative, that’s how much you need to deduct from your college budget. Go through your variable expenses and cut where you can.
Put your college student budget to the test
Now it’s time to see how workable your budget really is. For a full 30 days, track your spending in each category. Do the math at the end of the month and see how close you came to your target figures.
If you came up short, it’s time to tweak those numbers. In fact, if you broke even, there’s no reason not to try and do better so that you have some wiggle room. Revisit those variable expenses and rework what you can.
Of course, if you find yourself coming in way under budget, you might be getting more student aid than you need, and that’s only going to cost you in the long run. Here’s how to return student loans if realize you’ve borrowed too much.
Getting the basics of college budgeting down is one of the most important things you can learn before you graduate. Doing it on your own — in a spreadsheet or with pen and paper — is a great way to immerse yourself in it. But you can also be plenty hands-on with budgeting apps.
Your college budget is a work in progress
If your college budget doesn’t work the first time, that’s okay. (In fact, it’s normal.) Budgeting for colleges students is a work in progress. It takes time to create a budget that works just right for you. And even when you do, it won’t last forever.
Depending on how your life and priorities change, what works this year might not work the next. Be flexible enough to change it, disciplined enough to try it, and mindful enough to have fun.
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