How to budget in college in 2023 – Forbes Advisor

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College often presents students with financial challenges. Aside from tuition, students have to pay for necessities like food and rent. Individuals should plan for their future by regularly evaluating their finances and setting achievable goals. If you’re looking to rein in your spending and increase your savings in the new year, a budget can help you achieve your financial goals.

If you’re wondering how to budget for school, this guide offers tips on avoiding overspending, tracking spending habits, and saving money for emergencies. We also provide an overview of useful budgeting apps.

Benefits of creating a budget

Achieve your financial goals

Financial goals vary from person to person. Some people plan for long-term savings like buying a house and getting a mortgage, and others may just be trying to curb spending on unnecessary things in the short-term. Many people do both.

A budget allows you to set realistic goals and manifest them by sticking with spending regardless of your specific goals.

Avoid overspending

A budget usually sets a limited amount for monthly expenses. Without a plan, consumers can go beyond their means and, over time, end up in debt. These costs may increase as interest rates and monthly minimums increase.

By sticking to a budget, you can use your credit responsibly and pay off every month.

Prepare for emergencies

In addition to preparing for regular expenses like bills and groceries, budgets can help you plan for emergencies. Although you can’t predict exactly when a car breakdown or medical problem will occur, you can avoid financial hardship when these events occur by explicitly saving for emergencies.

Understand your spending habits

Tracking expenses with a budget puts your purchases in one convenient place. Without a budget, you might forget about some of your more impulsive purchases. Recording each purchase in a budget can help identify areas for spending improvement.

A budget gives a clear view of your income and the savings you need, and in turn sets a spending limit for each month.

How to budget in college

When documenting your budget, use the method that best suits your organizational techniques. Whether it’s a budgeting app, a Wordpad document, or a spreadsheet, it just has to make sense to you.

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Calculate your total income

Start tracking your income from employment, loans, grants, or family contributions. Break it down into sections by month, semester, and year. If those numbers are inconsistent or fluctuating, adjust your budget each month as needed.

Categorize your expenses

Assign a category to each purchase or expense, and go into as much detail as you see fit—a category could be as broad as “necessities” to include groceries, rent, and insurance, or you could classify expenses more specifically , like “food” and “eating”. Organizing purchases under “Needs” and “Wants” is another helpful budgeting technique. Make sure you put any expenses that don’t fall into a neat category in a catch-all section (e.g., “Other” ).

Calculate income vs. expenses

Compare your income and expenses after one month. Consider spending beyond your income. Look for unnecessary purchases and try to recall them over the next month. Is there a remainder every month? Take that excess and apply it to your savings.

Create a spending plan

After comparing your income and expenses, you should have a clear idea of ​​what you have to spend each month. Make sure you cover basic needs before making any unnecessary purchases. Do you eat out five days a week? Your budget may show this eating away at your potential savings.

Use your budget to set spending quotas — people commonly use a “50/30/20” breakdown, where 50% covers basic needs, 30% goes to unnecessary items, and 20% goes to savings. These ratios can vary with your income each month, but make sure you’re broadly consistent.

Seven budgeting apps to consider


Costs: $3 per month for individuals; $5 per month for families

App overview: In addition to accessible financial tracking features in the app, Acorn’s website offers budgeting guides with helpful information. Acorn can also help students save for the future with its popular “round up” feature, which brings the rest of each purchase down to the nearest dollar and invests it in a portfolio of the user’s choice.

Every Dollar

Costs: $12.99 per month; $79.99 per year

App overview: This app provides easy categorization for each issue. EveryDollar allows users to tag purchases to group them and visualize their spending habits. EveryDollar encourages individuals to set savings aside for unexpected expenses as well.

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good budget

Costs: $8 per month; $70 per year

App overview: Goodbudget uses the “envelope method” to help users spend and track expenses wisely. This technique divides each paycheck into virtual envelopes, each with its own intent, such as “pay off debt,” “buy groceries,” and “eat out.” This method provides users with an overview of their spending, and at the end of each month, the rest of each envelope becomes savings.


Costs: $0.99 per month ad-free; $4.99 per month for Mint Premium

App overview: Mint allows users to combine all financial savings and expenses – including loans, investments, and checks – in one convenient place. Individuals can receive notifications before bills are due and before subscription fees are increased. Mint also offers Billshark, an automated bill negotiation service that communicates with service providers like cable and internet to keep payments low.


Costs: $7.99 per month; $34.99 per year; $79.99 for a lifetime subscription

App overview: PocketGuard helps users categorize their expenses to provide insight into the amount of money they have to spend after covering necessary expenses. Visualizations like pie charts provide useful insights and make spending habits clear and understandable. Its “SMART” goal setting strategy – specific, measurable, attainable, relevant and timely – helps users stick to realistic spending and savings goals.


Costs: $8.99 per month with optional $2.99 ​​for bank account linking; $39.99 per year; $99.99 for a lifetime subscription

App overview: Wally allows users to set goals and create budgets to achieve their goals. The app’s handy tracking feature provides real-time information that allows users to adjust their budgets as needed. It also includes family and household budgeting tools that provide insight into the spending habits of multiple users.


Costs: $14.99 per month; $99 per year

App overview: YNAB’s app securely connects to your bank account and brings all purchases and deposits together in one place. Users can set goals to prioritize savings and achieve specific goals. For example, if you plan to go on vacation in a year, you can slowly save up for the trip each month. However, as your need for groceries, education, or other necessities grows, YNAB shifts your budget away from lower-priority savings toward these short-term goals.

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Budgeting tips and tricks for students

Make it a habit

Research has shown that people benefit from establishing habits and sticking to them. While forming a new habit can be difficult, sticking with your budget and seeing positive results can motivate you to stick with your routine.

Reconsider the small expenses

While it can be convenient to stop by the coffee shop or have lunch with your co-workers on your commute, those expenses can add up. Try to reduce these purchases instead of stopping them entirely. Making a pot of coffee at home, planning meals, and packing your lunch can go a long way toward reaching your monthly budget goals.

Be careful with credit cards

Many credit cards offer low or 0% interest rates to attract new customers, but these rates often increase significantly after a year. Be sure to stay on top of your monthly payments and avoid letting large purchases linger on credit. Otherwise, you may just end up paying a significant amount in interest before saving on the actual upfront cost.

Understand your needs vs. wants

Categorize your expenses into things you need and things you want. Although the details vary from person to person, students often view expenses like food, education, and rent as “needs.” Conversely, you may be able to work with an aging computer for a few more years or semesters before buying a new one, making that purchase a “wish.”

Prioritize your needs and make sure necessities are covered. By reducing unnecessary purchases, you can more easily reach your budget goals.

Prepare for the unexpected

Some payments are consistent and recurring while others are unpredictable. Improve your budget by preparing for the unexpected. You may not know exactly when you will have a medical or car problem, but for the most part these events are inevitable. Set aside a specific fund for unexpected events and you can cover those expenses as they arise without messing up your budget.

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