Mastering the Art of Student Budgeting: Tips for Financial Success

Did you know that the average monthly cost of food alone is 670 dollars per college student? The total estimated living expenses college students have to cover are about 14,435 dollars per year. This amount includes food, housing, clothes, subscriptions, and other expenses. If you add an emergency fund and unexpected expenses to the picture, the numbers start getting even more troublesome.

So, is there anything you can do to handle expenses in an effective manner and even save some cash while in college? The answer is yes, you can start budgeting in order to be more aware of your financial habits and errors.

In this guide, you’ll learn the biggest budgeting essentials like:

1. Why managing student finances effectively is so important
2. The spending habits and mistakes that cost you the most
3. The best budgeting strategies that will help you stay on top of the money game
4. The most useful tools, apps, and resources you can count on

The Importance of Budgeting as a Student

Until now, you’ve probably counted on your parents to handle finances at home. As a result, you probably have a very unrealistic idea about the amount required to cover essential expenses.

Budgeting as a student is important for numerous reasons:

• You’ll find out how much you’re actually spending per month and which living costs add up to the biggest sum
• You’ll get to cut unnecessary expenditures that are putting you in a precarious situation
• Students who budget find it much easier to meet their financial goals
• Many students actually find it easy to start saving and even investing in their future by adopting financially responsible practices

Common Financial Hardships Students Face

Students face various challenges that can lead to financial struggles and even the accumulation of debt:

• Dealing with overwhelming student debt (the average student borrower has 28,950 dollars in debt, as per 2023 statistics)
• Lacking financial literacy, hence making irresponsible choices
• Not thinking about saving or even investing at such an early age
• Being impulsive with purchases
• Having no idea about all education-related expenses (like textbooks, additional supplies, additional costs of attendance)
• Being overly reliant on a credit card

Surveys suggest that about 74 percent of college students are facing financial challenges. So, you’re not alone but there are numerous things you can do to get out of this not-ideal situation.

The Best Budgeting Tips for College Students

Having a good spending plan, knowing how to manage student loan debt, knowing how to thoroughly check a bank statement, cutting down recreational spending, and being realistic about your current money situation are all important budgeting steps that will help you out in the long run.

Let’s dig deeper and examine the best financial advice for college students.

Setting Financial Goals

Start out by setting realistic financial goals. This is the most important step to budgeting like an adult and making sense of all the financial information.

What would you like to accomplish in the short run? How about the long run? Pay off your student loans fast? Generate some extra savings? Start paying your bills on time? All of these goals are important, even if they seem like baby steps. Conquering one challenge will give you the confidence required to tackle the next and be braver with your financial goals.

Putting Together a Monthly Budget

The first step towards coming up with a budget is tracking your current expenses over the course of one month. Grab a notebook and record every single dollar you spend. Chances are that you’ll be shocked by the amount dedicated to non-essentials.

You should also list your monthly income and calculate the balance at the end of the month. If it’s negative, you’re in trouble.

In order to come up with a manageable budget, you’ll need to do the following:

• Separate your essential costs (loan installments, food, textbooks, commuting, tuition fees, dorm expenses) from the non-essential expenses (entertainment, gym membership, social activities);
• Make sure you have enough money to cover the essentials first;
• Student budgeting should then focus on what to do with the remainder of your money (if there’s any). Will you be spending on non-essentials, will you be saving or investing?
• If you don’t have enough to cover essentials and have a bit of extra in your monthly budget, you’ll either have to start thinking about cutting expenses or finding an extra income source.

Managing Expenses

If you come to the conclusion that you have to lower your expenses, you can employ the following strategies to achieve good results:

• Make all your monthly payments on time to avoid late fees
• Consider buying used textbooks, as course materials can add up to one of the biggest college essential expenses
• Take advantage of student discounts whenever available
• Consider alternative transportation methods (ditch your car and opt for public transport instead)
• Try coupons and cashback (various apps can be used for this purpose)
• Opt for free activities and entertainment options (there are lots of cool and free things available on campus, including a college gym)
• Choose shared living space options so that you share housing costs

Coming Up with Ways to Maximize Income

Even if you’re studying full-time, there are ways to enjoy financial stability without being solely dependent on a parental contribution:

• Make sure you have excellent grades and apply for merit-based scholarships
• Look for additional scholarship, grants, or financial aid opportunities
• Consider a summer job or a work-study program
• Tutor other students
• Become a residence advisor (RA)
• Look for opportunities to become a teaching assistant
• Find an off-campus gig (in a café or a restaurant, consider freelance writing, delivering food, babysitting, etc.)

Some Cool Budgeting Apps for Students

Having a budget in college can improve your living situation significantly. Luckily, there are various tools and apps you can count on to make sense of the numbers and translate that information into actionable steps.

• Goodbudget: a great app for students making their first steps in the world of budgeting. It helps you keep track of expenses, pay off debt in time, and identify important monthly trends.
• Mint: a complex tool that allows you to connect your credit cards, bank accounts, investment accounts, and any other financial instruments to help you stay on top of both spending and saving.
• Ibotta: an excellent cashback app.
• Mint: a great tool to help you centralize your student budget.

You Can Always Count on Morzep College Coaches

The transition from at-home living to being a college student is a major one. You may end up needing some assistance to make sense of all the new things in your life. Our college coaching professionals will be there to guide you every step of the way.

Morzep is focused on getting you ready for college, as well as understanding every possibility and challenge that will result from a great academic opportunity. Acquiring financial literacy is one of the essentials that the Morzep coaches will focus on.

We can help you plan, execute and accomplish your goals in a way that surpasses your expectations. Based on the knowledge and the experience we’ve acquired through the years, we’re confident in our ability to make the dream come true in the most optimal way.