If you’re in college, you’re probably tired of hearing how it’s the “first step into adulthood.” Yeah, yeah, yeah. Except—it’s true. You are an adult now. So we’re going to treat you like one: It’s time to budget.
That word can bring up a lot of different reactions. But you’ve totally got this, and we’ve totally got your back in the process. Yes, budgeting is hard, but college is harder. And in the long run, budgeting well in college will make you smarter with your money, which is is key to success in all areas of life.
We’ve got tips for a successful college budget—like Budgeting 101, if you will. But first, we know you may be raising your hand with a preliminary question:
Why Should I Budget?
You may think to yourself, I’m in college. I don’t need to budget yet. That’s for after—when I’m rolling in the dough at my dream job. Right? Wrong.
First of all, you might not be “rolling in the dough” at your “dream job” right after graduation. Unless you get hired at a bakery. Most likely, you’ll have to work your way up in income and career status. And that’s okay.
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Secondly, if you have any money flow at all (money coming in and going out), you need to budget. The budget will tell your money where to go—so you don’t wonder where it went. That’s why you budget. Because you’re in charge of your money. So tell it what to do.
How Do I Make a College Budget?
We’re going to walk you through the steps to build your budget. Since we don’t know your exact financial situation, we’ll give a lot of possible incomes and expenses. You personalize your budget to your actual needs.
1. Write down your income.
- Are your parents helping? If they contribute monthly cash, put it down as income.
- Do you have a part-time job? List that income as well.
2. List your expenses.
- Food: We all eat. It’s a biological human need. And whether or not you’re good at science, you need to budget for food.
- Textbooks: Here’s a pro tip. Buy used textbooks. You don’t get better grades just by having new books. Maybe you’ll luck out and get a used copy from someone who took helpful notes in the margins. In any case, you need to budget for your textbooks.
- Tuition and Fees: This is a big one. If you pay on a monthly plan, the “amount due” each month is exactly what you put in your budget. If you make one big payment each semester, divide that total by the number of months before it’s due, and save that amount every month.
- Transportation: If you pay for gas or public transportation, you need a budget line for that.
- Housing: Your housing may be lumped in with tuition and fees if you’re dorm-living. Or you may live at home and have zero rent. (Genius, money-saving move there.) But if you do pay a monthly rent, you need a budget line for this.
- Utilities: Same as above—this may not apply to you. However, if you’re splitting utilities with roommates or carrying that yourself, budget for it.
- Entertainment: College is a time for serious study and hard work. But—it’s also a time for some fun. If your budget allows, make a line for entertainment. This would include movies, dates, concerts and extreme mini-golf experiences. Just remember: Having fun in college doesn’t have to be expensive.
3. Do the math (income – expenses = zero).
You need to use the zero-based budgeting method—this is the best way to make sure you don’t accidentally waste your money. Because college life is expensive, and every dollar needs to work as hard for you as you’re working for that degree.
Simply put, a zero-based budget is when all your income minus all your expenses equals zero. So, if there’s still money left after you’ve got all your expenses listed, stash that cash into savings for an emergency or next semester’s bills!
4. Track your spending.
Your budget isn’t a goldfish. It’s a puppy. (And if you have a puppy, budget for that too.) You need to give it lots of attention and training. In other words, you need to track your spending. Every. Single. Day. But just like a puppy, there’s a positive side—it’s totally worth the work. When you track your spending, you get a true view of all your money habits IRL. It’s not as good as a friendly muzzle nuzzle, but it is an insight that helps you break bad money habits and encourage good ones.
5. Become an A+ budgeter.
If you really want to get your budget-puppy in line, you’re going to have to track—and then adjust.
You know how you had to adjust literally your entire life when you started college? Luckily, adjusting your budget isn’t that extreme! It just means that when you underspend or overspend in one budget line, you make up for it in another.
But never stop paying your bills to cover front-row tickets to your fav boy band’s reunion tour. Wants come after needs. Always. Learn this balance, and you’ll ace Budgeting 101.
How Can I Cut Expenses in College?
Okay, friends. Now it’s time to learn how to cut back on your expenses. This will free up cash so you can tell student loans to kiss your budget. Because we don’t play that debt game.
Save money on food.
Couponing isn’t just for grandmas, and the dollar menu is your new BFF. Hello, 20 nuggets for $5! Don’t eat extravagantly. This is the time for food frugality. Work those grocery store sales, eat at restaurants less, and you can save big on your food budget.
Save money on textbooks.
Buy them used. Rent them (yes, that’s a thing). Do a book swap with other students. Don’t buy any books this semester and just hope for the best. No—don’t do that. Just don’t pay full price for your books if you can avoid it at all.
Save money on transportation.
Carpool, walk or bike. Check in on student discounts on bus passes or auto insurance. See if your school offers free transportation programs. It may take some effort, but you can save money in the automobile area of your budget.
Save money on entertainment.
Of course you want to have fun in college. That’s not a bad thing—if you budget for it. Budgets aren’t killjoys, but priorities have to come first. Your number one priority right now is paying for college—and not letting your future become strangled by the chokehold of student loan debt.
Hunt down economical amusements. Check out free entertainment offered on campus, enjoy the discounts at places like movie theatres with your college ID, and don’t forget some of the best fun is on the school quad with a $1 frisbee and some friends.
Save money on housing.
If the dorm is the cheapest option, just suck it up and live there for a few years. If you get an apartment, share the costs by finding roommates. And don’t look down on the option of living at home, if that’s possible for you. You can still enjoy the college experience—without the college debt!
How Do I Pay for College Without Student Loans?
We’ll rant in a moment about how important it is to make this critical life choice—aka going to school without student loans. But first, let’s get practical and talk about how to make it happen.
Apply for grants and scholarships.
Step one is to fill out that FASFA every year! Yes, every year! It’s how you get aid through federal grants, work-study programs, state aid, and school aid. It’s also how you get loans—but don’t get loans. We’ll tell you why in a moment.
Get to work!
We’ve heard all the excuses people make so they can ignore this tip: I should just focus on my studies, or I should just enjoy the college experience. Question: Is that “enjoyable college experience” really worth paying off school loans until you’re 52 years old? Because grads can be making payments on that debt for up to 30 years!1 Um. Gross.
Also, guess what? Research shows that students who work part time (less than 20 hours a week) often have better grades than those who don’t work at all.2 You’re going to learn so many time-management skills, it’s not even funny. You’ll be more desirable to potential employers and debt-free. That’s how you do college well.
Take fewer credit hours if you need to.
If you can’t afford to be a full-time college student, there’s no shame in the slow-roll game. What we mean is—it’s fine to keep working your day job and move through those courses slowly. Just be mindful because some scholarships and grants require that you are a full-time student.
You Can Go to College Without Debt.
People will tell you that you can’t go to college without taking out school loans. That’s crazy talk. And completely false.
Right now, the total amount of student loan debt in the U.S. is about $1.55 trillion.3 Yes. Trillion. With a T. And in italics for emphasis—as if a number that big needs emphasis.
What are we doing when we take out school loans? We’re sucking the life out of our future dreams. We’re holding ourselves back. Remember how you could still be paying on them when you’re 50?
Don’t. Don’t do that.
Will you have to work harder in college to make it through debt-free? Yes. Will you be better set up for success afterwards? Yes.
While your recently-graduated friends are scraping dried spaghetti sauce from their pots because they can’t make rent without annoying roommates who never do the dishes, you’ll be able to live on your own while saving up for a down payment on a home.
It sounds like a lot to take in, so if you want even more info and a step-by-step guide to making this college-without-debt thing happen, grab yourself a copy of Debt-Free Degree: The Step-by-Step Guide to Getting Your Kid Through College Without Student Loans. Written by Anthony ONeal—a bestselling author, Ramsey Personality, and our good friend—we can’t recommend it enough.
Plan for Your Future—With E$
Planning for your future starts now. With a budget. With an EveryDollar budget, to be exact. And just for you, since you’re pinching all your pennies and eating all the off-brand PB&J to save money, we’ve made EveryDollar free to use! (Okay, you got us—anyone can get this budgeting tool for free. But you’ll be our favorite users.)
Download the free EveryDollar budget app onto your phone today. That way you can take your budget and your future into your own hands—both figuratively and literally.