How To Build A College Budget (2024)

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After months of filling out applications and writing essays, you’ve finally done it: You’ve been accepted into college and will be attending school in the fall.

Besides classes and schoolwork, you have some other big responsibilities ahead—you’ll have to manage your expenses and spending. To make it easier on yourself, one of the best things you can do before school is create a budget.

From textbooks to transportation, here’s what you should consider when developing a college student budget.

Get Clear on Your Financing Options

When it comes to figuring out how to pay for college—taking into account tuition, fees, room, board, books, equipment, transportation and personal expenses—the cost of your education can be high.

According to The College Board, in 2020-21 the average total estimated budget for full-time undergraduate students ranged from $26,820 for those attending public four-year schools in-state to $54,880 for those attending private nonprofit four-year schools.

However, you won’t have to cover that cost entirely on your own; 86% of first-time, full-time undergraduate students receive some form of financial aid, according to the National Center for Education Statistics. For the expenses that aren’t covered by financial aid, you’ll have to find other financing options.
Family Contributions
If you’re lucky, your parents or other relatives can help you with your college expenses. Depending on your situation, your family can contribute to your education with one or more of the following:

  • 529 college savings plans or custodial accounts. 529 accounts and custodial accounts are savings tools family members can use to set aside money and invest it to pay for your college tuition and other fees.
  • Savings. Your family may have set aside money in a traditional savings account that they can use to cover some of your costs.
  • Parent student loans. If you need to borrow money to pay for school, your family may be willing to take out parent student loans for you. These can, however, come with higher interest rates and fees and/or less flexible repayment options than federal student loans taken out by undergraduates.

Scholarships

Scholarships—which are typically merit-based awards—can be a valuable resource since they don’t have to be repaid.

Scholarships can be awarded by colleges, nonprofit organizations, companies and even individuals. They can range in value from a few hundred dollars to the full cost of your tuition.

Grants

Like scholarships, grants don’t have to be repaid as long as you meet the program’s criteria. Grants are usually awarded based on financial need, and they can be issued by the federal or state government and nonprofit organizations.

Work-Study

If your school participates in the federal work-study program, you may be able to get a job on campus and use the money you earn to pay for some of your college costs. Work-study is need-based, so the results of your Free Application for Federal Student Aid (FAFSA) will determine your eligibility.

Earnings from Jobs

If you had a part-time job in high school or worked during the summers, you may have saved some of your money for college. Tapping into that money can reduce how much you need to borrow in student loans throughout your time in school. If you choose to work while you’re in college, that can also help offset your expenses.

Student Loans

If you’re like most college students, you’ll use student loans for at least some of your costs. In fact, more than half of graduating college students leave school with student loan debt, according to The College Board.

If that’s the case, it’s wise to start with federal student loans since they usually have lower interest rates and more repayment options than private loans. If you use up all of the federal loan money available to you, private student loans can help pay for the remaining amount.

Understand Your College Expenses

Once you know what money you can put toward your college budget, you can take a look at your expenses. When creating a budget, think about the following costs:

  1. Tuition and school fees. The average cost of tuition and school-mandatory fees is dependent on the type of school you choose. At a public four-year school, the average cost for an in-state student is $10,560, according to The College Board. If you opt for a private school, the average cost is $37,650.
  2. Room and board. Your room and board is what you pay for housing, utilities and your meals. A college student food budget can get expensive quickly, so make sure you evaluate whether you need your school’s meal plan or if it would be cheaper to purchase your own groceries. On average, room and board costs $11,620 at a public four-year school and $13,120 at a private school.
  3. Books and supplies. Textbooks, computers, and other supplies can be expensive. The average cost for the past academic year was $1,240.
  4. Transportation. Depending on where you go to school, you may need to pay for transportation. You may have to pay for your car’s insurance, gas and upkeep, or you may need to purchase a bus or train pass. Typically, students spend $1,230 per year on transportation at public schools and $1,060 at private colleges.
  5. Personal expenses. As a college student, you also should plan for extra costs like clothing or entertainment. On average, college students spend $2,170 per year on personal expenses at public universities and $1,810 at private colleges.

Create a College Student Budget in 5 Steps

Now that you know what expenses to expect and what money you’ll have coming in, create a budget using these steps.

1. Calculate How Much Money is Available Per Month and Per Semester

Add up all of the money you have available from different sources, including your parents’ contributions, your own income and savings, scholarships, grants and student loans. That money is how much you have to spend each year.

You may find it helpful to divide that amount by semester or by month. By working with shorter increments, it may be easier to track your spending.

2. List All of Your Expenses

Make a list of all of your school-related expenses, including tuition, rent, groceries, insurance, utilities and textbooks. Ideally, there should be a little extra money after your fixed expenses are paid to cover additional costs or emergencies that pop up.

3. Identify Areas to Cut Back On

If money is tight—or if you’re looking to minimize the need for student loans—look for areas where you can cut back. Even small adjustments can pay off over four or more years of school.

For example, let’s say you currently subscribe to three streaming services for entertainment at the cost of $10 each. By canceling all but one, you’ll save $20 per month—that’s $240 per year, and $960 over four years.

Other things you can do to reduce your expenses include:

  • Get a roommate to split housing and utility costs
  • Cook your own meals
  • Rent textbooks instead of buying them
  • Downgrade your cell phone plan

4. Think About Goals

When creating your college student budget, make sure you think about your educational and financial goals. For example, you may want to study abroad for a semester or buy a car once you graduate. To make your goals a reality, set aside a little money each month so that you’ll have the cash you need.

5. Repeat

After creating a budget, make sure you check it often. It’s a good idea to review your budget weekly or monthly to help you stay on track. By making it a habit, you can minimize excess spending and stay within your limits.

College Student Budget Template

Use this sample college student budget worksheet to create your own budget that you can update during all four years of school. In this example, the student is living on campus and attending a public in-state university.

AVAILABLE FUNDS

Source

Per Month

Per Semester

Per Academic Year

Parent contributions

$625

$2,500

$5,000

Scholarships

$312

$1,250

$2,500

Grants

$125

$500

$1,000

Work earnings

$375

$1,500

$3,000

Student loans

$2,000

$8,000

$16,000

Total

$3,437

$13,750

$27,500

SCHOOL EXPENSES

Source

Per Month

Per Semester

Per Academic Year

Tuition

$1,320

$5,280

$10,560

Rent/dorm fees

$1,452

$5,810

$11,620

Meal plan or groceries

$125

$500

$1,000

Health insurance

$50

$300

$600 (Per calendar year)

Phone

$50

$300

$600 (Per calendar year)

Textbooks

$155

$620

$1,240

Clothing

$125

$500

$1,000

Entertainment

$75

$300

$600

Study abroad fund

$50

$200

$400

Additional expenses

$75

$300

$600

Total

$3,477

$14,110

$27,020

REMAINING FUNDS

Total Funds Available ($27,500) – Total Expenses ($27,020): $480 excess for savings or unexpected costs

Tracking Your Spending

As an incoming college student, it’s important to know how much money you have and how much your education will cost. Developing a budget will help keep your spending in check and reduce the need for student loans, meaning you’ll have less or no debt to pay off after graduation

Once you have a college student budget in place, you can use budgeting apps to track your spending and see how much progress you’re making toward your goals. Mobile banking apps like LearnVest, Mint, Albert and PocketGuard allow you to manage your budget and your finances directly from your phone.

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How To Build A College Budget (2024)
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