How to Budget and Save Money in College

Heading off to college can be incredibly exciting — but it can also be incredibly expensive. You’ll have to think about paying for tuition fees, room and board, textbooks, travel, and everything in between.

Unfortunately, all of those things can add up pretty quickly. That’s why you’ve got to do your best to save money and live on a tight budget.

Not only will budgeting help you ensure you’ve always got enough money to pay your big expenses, but it can also help you save money in college and spend what you have responsibly. By doing so, you’ll be able to avoid the “broke student” stereotype and live comfortably while earning your degree.

This guide will explain why you need to budget, which expenses you have to include in your college budget, and how to save money in college.

Why do you need to budget in college?

A lot of students already have some work experience by the time they get to college.

You may have worked after school in a store or waited tables during the summer and saved up a reasonable amount of your own money. But once you start college, you’re going to have a whole lot of new and exciting responsibilities and opportunities you’ll want to take advantage of.

There are going to be loads of clubs and socials to meet new people and try new things. You’ll have regular lectures and seminars, and you’ll have the added life admin of looking after yourself. That’s what college is all about, and it’s a fantastic experience.

But all of these new experiences and responsibilities mean you’re likely not going to be able to work full-time. In fact, you may not have a whole lot of extra hours to be working part-time, either. Meanwhile, you’re probably going to have new living expenses like grocery shopping, travel, and utilities that you’ve never had to deal with before.

Then there are loans to consider.

If you have to make student loan repayments while you’re still at school, you’re going to have to focus on your outgoings. If you start missing loan payments, it could start to affect your credit score. With bad credit, you could struggle to get a car loan or mortgage after graduating, or you may end up paying higher premiums to cell phone providers.

Translation: as a college student, you’re probably not going to be diving into a pool of money every day. You’re going to need to really watch your spending, and you may need to consider cutting back in some areas.

That’s where budgeting comes in — as a college student, budgeting is going to be your biggest financial lifesaver.

No matter how old you are, you’ve probably already had to budget at some point in your life. It’s all about taking stock of your income and then distributing that income in a responsible way to make sure that all of your outgoing costs are going to be fully covered.

But how much should a college student’s budget be?

According to researchers at the College Board, it depends a lot on where you’re going to school. The average student budget at a four-year public college was $27,330 per year during the 2021–22 academic year. But if you go out of state, we’re talking an average budget of $44,150 per year.

Illustration showing average student budget numbers

Don’t panic — these numbers include your annual college tuition fees. Most of the time, these costs are covered by financial aid like student loans, grants, and scholarships — so you might not have to worry about these in the short term.

Instead, you’ll need to focus on more day-to-day expenses. But if you’re new to this, don’t worry. We’ll spell out the basic expenses that you’ve got to include in your student budget (and how to keep on top of those expenses).

What expenses need to be included in a college budget?

No two students are 100% alike — which means that no two budgets are going to be totally identical either.

That being said, most student budgets are composed of these seven expenses:

  • Tuition fees
  • Additional fees
  • Accommodation
  • Books and supplies
  • Transport
  • Technology
  • Personal expenses

To help you understand how each one of these expenses fits into your overall budget picture, let’s quickly break down what (and how much) each expense looks like.

1. Tuition fees

This is the big one. The average college tuition price tag is currently sitting at $27,437 per year if you’re going to a four-year out-of-state college. Multiply that by four years, and you’re easily talking over $100,000 worth of tuition fees.

That’s why the first consideration in your budget should always be tuition fees. This is going to be the lion’s share of your student budget — and as the biggest expense, that means tuition fees need to be the first thing you’re making sure gets paid. Your student budget can then be built around those fees.

Illustration of average tuition fee expense

As a disclaimer, it’s important to note that almost nobody pays tuition expenses out of pocket.

These are likely going to be covered by a funding mix of student loans, grants, or scholarships. But in some cases, the funding you’re receiving might need to pay off both your fees as well as other bills or expenses. You’ve got to understand the implications of each funding source, how it can be used, and how it needs to be used.

Even if you don’t have to pay your tuition fees out of pocket, it’s worth remembering that they can affect your student budget while you’re still in school.

For example, let’s say you go for a private student loan rather than a federal loan. You may then need to start making monthly payments before you graduate as a result. That means your tuition fees are going to be covered by the loan, but you need to fit loan repayments into your monthly student budget.

2. Additional fees

With most majors at most colleges or universities, you’re going to be expected to pay some additional fees on top of your tuition fees and your room and board.

This “additional fees” category includes stuff like parking stickers, gym memberships, utility bills if you’re living on campus, and participation fees for taking part in clubs or sports. Your courses might even have extra required fees for things like field trips and buying or renting lab equipment.

None of these extra fees are going to send you to the poorhouse. But when you add them all up, that amount can quickly get out of hand. Grants, loans, or scholarships may cover certain admin fees — but for other things like sports club memberships, you’ll probably be on your own.

3. Accommodation

The second greatest expense you’ll need to budget for is your accommodation (or “room and board”). Just how much your accommodation is going to cost will depend mostly on whether you’re planning to live on-campus or off-campus.

At present, the average annual cost of room and board at a four-year college ranges from $10,216–$11,945. But again, this will vary depending on what type of school you’re going to.

For example, students living on-campus at a public college pay an average of $11,451 per year for room and board. Meanwhile, students enrolled in a public college living off-campus average $10,781 per year.

As always, you should budget for higher costs if you’re going to a smaller private college. The average annual room and board cost at a private four-year college is currently $12,682. If you were to go off-campus, you’d be looking at $9,762 per year.

Illustration of average accommodation expense

Like tuition fees, a lot of students aren’t going to end up paying for accommodation out of pocket. Student loans, grants, or scholarships can often be applied to room and board — meaning you won’t typically have to worry about paying this cost upfront if you live on campus. You may also be able to apply financial aid towards a meal plan at your dorm's dining hall.

But if you rent privately off-campus, your accommodation is going to be a monthly expense that you’ll need to budget for and stay on top of.

4. Books and supplies

We might be living in a digital world, but that doesn’t mean you’ll be able to escape traditional textbook costs at your campus bookstore.

The average cost of textbooks and course supplies at a public four-year college is currently sitting at $1,334 per year. The cost of books for private college degrees and community college degrees is about the same.

Illustration of average textbook expense

We’ll talk about ways to save money in just a minute, but one great way to cut expenses is to try and find secondhand textbooks or borrow textbooks from your university library.

5. Transport

Transport is another key budget expense you’ve got to consider — especially because this isn’t an area you can typically use grants or scholarships to help you out.

If you’re living off-campus, you’ll need to budget for your commute to classes. That might mean public transportation, Ubers, or the costs associated with owning a car (like monthly car payments, gas, and insurance)

Transport is another area where expenses can spiral out of control if you’re not careful. The average college student spends up to $1,800 on transportation costs annually.

6. Technology

If you want to maximize your productivity at school, you’ll probably need some tech. That could mean getting a new laptop, phone, headphones, and more — and because a lot of tech items don’t have a long lifespan, this is an annual cost.

On average, students spend about $306 annually to ensure all their technology is up to date. For some students, that cost may feel a bit out of reach. But again, this is one expense that you have control over.

Take a look at what you can realistically afford, and balance that against what you actually need. Going a bit more practical is a great way to save money in college if you can live without the newest and coolest gadgets.

7. Personal expenses

Personal expenses cover all the other stuff you need to (or want to) spend money on. That means eating out, clothes, tailgating, going to the movies, toiletries, and everything else.

Just how much you need to budget for in terms of personal expenses depends on your lifestyle. But if you can exercise some self-control, it’s totally possible to cover all your personal expenses on a tight budget.

How to save money in college

We’ve covered why it’s important to budget in college, as well as the expenses that you’ve got to budget for.

Now, let’s break down exactly how you can save money by budgeting, cutting costs, and sourcing some additional income. There are a few really useful strategies you can deploy to save money in college — and they’re all pretty straightforward.

The 50-30-20 budget rule

There are a lot of different ways you can budget, but one of the most useful budgeting strategies for college students is the “50-30-20 budget rule.”

Illustration of 50-30-20 rule

The rule is pretty simple.

It states you should be spending 50% of your income on things you need. This will be all your essential expenses like paying for college tuition fees, accommodation, utilities, transportation, and trips to the grocery store.

The next 30% of your income should go toward stuff you want (but could live without). That could be going out with roommates, shopping, a spring break trip, eating out, or subscriptions to streaming services.

Your final 20% should either go toward your savings or any outstanding debt you’d like to pay off. In practice, that could mean working to pay off your loans or your bills beyond the minimum monthly payment alone. On the flip side, you may just want to stash away 20% of your monthly income into a savings account or high-interest bank account.

Use a budgeting app

Whether or not you’re using the 50-30-20 budget rule, you’ll need to sit down and crunch the numbers to figure out what your outgoings actually are.

You’ll need to factor in all of your income sources and pair that against your expenses. You can do that on just about any app with a spreadsheet function. But there are also a few handy budgeting apps that offer dynamic budgeting templates specifically designed for college students.

If you need help getting started, apps like Mint and YNAB offer a lot of great resources.

That being said, it’s also worth getting in touch with the student support services at your college or university. Most schools have a money advice service with professionals who can help you set out a model budget or conduct a one-on-one consultation to help you start saving smarter.

Cut back on your costs

As part of your budgeting exercise, you’re probably going to locate quite a few places where you’re spending money you don't need to spend. Developing a budget model will show you what you’ve got money for and what you don’t.

From there, you’ll need to sit down and make a few tough decisions about what you don’t need.

For example, you might find that you’re spending way too much money going to the coffee shop with roommates. A simple way to take out those costs would be to start making your own sandwiches for lunch or switching to frozen meals for dinner.

On the flip side, maybe you’ve been paying for a monthly gym membership that you've never used. Or you've got a Netflix and Spotify subscription that's being wasted. If that’s the case, you’re probably going to want to go ahead and just cancel them.

Instead of paying for concerts, you could also check out free events instead. Likewise, you could think about joining a carpool and ditching your bus pass.

Let’s face it — cutting back on college costs isn’t fun. But if you need to save money in college, you need to spend less money. You’ll be shocked at how much you could be saving just by trimming away all of the unnecessary expenses in your life.

Get a part-time job

Another great solution to save money in college is to start earning more. That means getting a part-time job to earn extra cash.

You’ll need to focus your energy to get a job that will be easy to fit around your college education and classes during the school year. But there are bound to be quite a few vacancies both on and off-campus.

You might lose out on a few social outings by taking on part-time work. But you’ll be able to get extra money you can use to meet all of your financial responsibilities. It’s also going to boost your CV and give you more work experience — which will probably help you get a better job after you graduate.

Conclusion

When it comes to saving money in college, the key is to think smart and budget. When you’re able to keep tabs on your spending, it’s a whole lot easier to figure out what you can realistically afford — which will ensure that you’re living a lifestyle that matches your income.

But if you need help budgeting or learning how to save money in college, there are quite a few useful strategies and tools you can utilize to reach your financial goals.

It’s worth checking out the 50-30-20 budget rule or using a budgeting app to make sure you’re constantly in the know on what you’re spending. But it’s also worth cutting back on your costs and getting a part-time job too.

If you start using these strategies, you’ll be completely shocked at how easy it is to live on a tight budget in college.

Want to find out how you can start saving for college now?

Check out our Ultimate Saving Guide For High School Seniors Going Into College — and be sure to keep an eye on CouponFollow for specific college coupon codes you can take advantage of.

about the author

Marc Mezzacca
Marc Mezzacca is CEO of CouponFollow, a consumer savings engine that surfaces popular coupons. He has been in the coupon and deals industry for over a decade with a deep interest in evolving e-commerce technologies.