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College Budgeting: How to Save Money in College

Home > Students & Debt > College Budgeting: How to Save Money in College

The college years typically are a student’s first steps into adulthood and if you don’t want to stumble directly into debt as you work toward a diploma, learn how to create a budget.

More importantly, stick to it!

College budgets include the same things adults deal with after graduation – how much do I spend on food, rent, utilities, clothes, entertainment, etc.? – but the punishment for mistakes is typically much lower. Students can experiment with where their money goes and not worry about paying too high a price for mistakes.

How to deal with things like overspending on food and entertainment; being late with rent; and wasting money on clothes-shopping sprees are learning experiences that you can take and apply directly to life after graduation.

Budget Your Way Through School

College is supposed to be about learning and there are lots of things to learn about money through budgeting. Start off small. Give yourself a weekly budget and see how close you come to accurately estimating expenses. If you run out of cash on Wednesday and are forced to live off a box of cereal the rest of the week, you’ll get a taste of what happens in adult life when you mismanage money.

And speaking of food, that might be the one place where more money gets mismanaged than any item on your budget. Everyone needs to eat, especially college kids and whether you choose to dine in or eat out, find ways to get the best bang-for-your-buck.

Same goes for what college you choose, how much you spend on rent and whether you really need things like a car, cable TV and a $5 cup of coffee every morning. Does it really make sense to take out more student loans so you can indulge in those “necessities” of college life?

Or should you use better judgment and live within your budget? The benefits of learning that in college will make life a lot easier when you’re on your own and having to support yourself without student loans or a check from Mom and Dad.

Ramen noodles and PB&Js can get you through the day, but inevitably you know a restaurant or bar that serves hot wings, is going to call your name and you will eat out. That’s going to cost you a bundle unless you use smartphone apps like Hooked and Pocket Points that will save you money on your food budget, helping you to avoid (or at least limit) the need to borrow from your parents or take out more student loans.

It’s easy to forget about a budget when you can live off an endless supply of loan money, but keep in mind, a loan is not free money.  It’s debt.  Six months after graduation, you start paying that money back with interest. On average, it takes 21 years to pay off student loan debt, and by then, you could be 43 years-old and still trying to figure out how to put your kids through college.

Nine Easy Ways To Cut Cost of College

It’s best to limit student loans at all cost. Start by creating a budget that is realistic. Then, devise a game-plan to save money on each budget item. Here are some tips college kids use to save money.

Choice of school – Tuition and fees account for the bulk of a college student’s budget. Cost of attendance should factor into your choice of college. The average cost of an in-state public university was $9,410 in 2015-16. Compare that to $23,893 for out-of-state universities and $32,405 for private universities. Grants and scholarships can help cover some costs, but don’t rely on student loans to pay for tuition. Go to an in-state school and save at least 150% on tuition and fees.

Textbooks – Renting used textbooks will save you money and ease the headache of shopping around for books after the semester. In high school, it’s common to purchase textbooks and sell them to classmates a year below you. In college, it isn’t as easy. Not everyone takes the same courses, and finding a buyer can be difficult before the book becomes obsolete. The best place to go is where you can either rent or buy textbooks cheaper than shopping at your university bookstore. The textbook Microbiology: An Introduction 12th Edition, one of the most popular textbooks on , costs $156 to buy used. You’ll only get $49 to sell the same book to Amazon. That’s a loss of $107 for a book that only costs $30 to rent.

Housing – Research the price of on-campus dorms versus off-campus apartments and houses. A 2015 study by Trulia found that it was cheaper to live off campus in 15-out-of-20 colleges. The general rule of thumb is that if the college is in a big city like New York or Los Angeles, where rent is notoriously high, then it will probably be cheaper to live on campus. But for a small town like Gainesville, FL, it was 46% cheaper to live off campus than in University of Florida dorms.

Roommates – The easiest way to cut costs in college is to share expenses. Living with roommates can save you money on rent, utilities, groceries and much more. Rent alone can cost $693 a month more to live by yourself at a school in Philadelphia or $600 more in Denver.

Cable – The average cable bill was $103.10 a month in 2016 and that’s a budget killer. Still, you’ll need something to help you procrastinate during finals week. Netflix will run you $10/month, but if you really want live TV, there are plenty of cheaper alternatives to cable like SlingTV, PlayStation Vue and DirecTV Now for $20-$40/month.

Transportation – The average cost of owning and operating a car in 2016 was $8,558/year according to a study by the American Automobile Association. Luckily, most universities have a bus system you can hop on, in addition to the city’s public transportation system. If you really need something to ride around town, scooters are the most economical option. You can find a decent ride for $500-$1,200, and parking will never be an issue. Look for name brands like Yamaha and Honda for a reliable bike that will keep maintenance to a minimum and hold its value over the years. If you live on or near campus, pedaling a bicycle is the way to go.

Food – Cooking for three or four people is just as easy as cooking for one … and a whole lot cheaper! Plan to cook meals with your roommates and share the cost of ingredients. A study by Cheapism found that an average chicken entrée with a vegetable side cost $13.41 at a restaurant. The same meal could be made at home for $6.41. When you do eat out, look for deals. I’ve already mentioned Hooked and Pocket Points that offer discounts at restaurants, but there are plenty more apps like GroupOn and Rovertown that basically function as coupon apps for cheap restaurant meals.

Coffee – You could try to do without coffee, but if you have 8 a.m. classes then at least brew your own. It costs 51 cents to make your own coffee compared to at least $2 for a cup at Starbucks. That’s a savings of almost $550 per year.

Party fund – It’s college, so you are going to go out occasionally. Just make sure that when you do, you aren’t spending money that you might need for more important things. Set aside a few dollars here and there to use for a night out, and put it in a party fund basket on your nightstand. Leave your credit cards at home, and only use cash from the party basket when you get to the bar. This will ensure you only spend as much as you can afford. Use apps like Happy Hours, UConnection and Party Tutor to find drink specials near you.

Sticking to a Budget while in College

The challenge for college students is not making a budget; it’s sticking to it. The basic principle of budgeting is to never spend more money than you make. Otherwise, you run the risk of getting buried in debt that might be difficult to fill. Start by figuring out how much money you have and which college costs are fixed. These are numbers that shouldn’t change much over the span of the school year.

To begin, you will need to list all your sources of income, including:
  • Income you make from a part-time job, summer employment, or work-study.
  • Funds from your parents.
  • Student loans, grants or other forms of financial aid, including miscellaneous gifts of cash.
Some of your costs are fixed, which means the amounts don’t vary much and you know their due dates. For example:
  • Tuition and fees.
  • Room and board if you live on campus (rent and utilities if you live off campus).
  • Books, equipment, classroom supplies.
  • Car loan.
  • Credit card accounts.
  • Car insurance or health insurance premiums.
  • Cable TV.
  • Phone bill.
Once you subtract your fixed costs from your total income, you will know how much disposable income you have left over for flexible costs that are irregular in nature, including:
  • Snacks, drinks, groceries and eating out.
  • Social and recreation expenses, such as movies and sporting events.
  • Transportation, including car maintenance and parking fees.
  • Personal expenses, including laundry.
  • Health care, including prescriptions and co-pays.

Emergency Fund a Must in College

Hopefully, your estimate of these flexible costs does not exceed your available income and still leaves some money to put into an emergency fund or savings account. As the semester progresses, you will have to track all of your expenses and determine where you may be over or under budget. Remember that sometimes you’ll spend more than at other times. But if you continually review and modify your plan, every week at first and then every month, you can find ways to re-allocate spending so that everything balances out over time.

By the end of your first college semester, you should have a very good idea of how much you can spend in each category and where you have room to maneuver. There are many budget templates available online that you can utilize for planning purposes, or you can simply make your own form in a spreadsheet program.

Don’t make the mistake of being blasé about your finances. Write everything down, and take your budget seriously. This is one test that you can’t afford to fail.

About The Author

Max Fay

Max Fay has been writing about personal finance for for the past five years. His expertise is in student loans, credit cards and mortgages. Max inherited a genetic predisposition to being tight with his money and free with financial advice. He was published in every major newspaper in Florida while working his way through Florida State University. He can be reached at [email protected].


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