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College Student Budget: Tips for Students and Their Parents

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What we’ll cover:

  • Why budgeting for college students is important and how parents can help encourage good habits
  • A three step approach to budgeting as a college student
  • Extra credit: establishing credit

College students have a lot going on: Perfecting a class schedule, moving into a new place and trying to become more independent. It’s easy to see why budgeting may not be top of mind. 

On top of that, students might not understand some fundamental financial concepts. For example, according to a recent study between RTI International and the RAND Corporation, only 28% of undergraduate students understood the concepts of inflation, interest and diversification. 

For students, becoming more financially independent could seem like adding another course to your schedule. But learning how to budget may ease the stress of college life – once you have your expenses nailed down, it’s one less thing to worry about. Budgeting can also help you build solid financial habits that will set you up for success as an adult.

And if you’re a parent reading this, sharing your own experiences with finances – both the wins and setbacks – can be an invaluable lesson for your kids. 

Why budgeting can help college students

Budgeting can help students manage expenses (expected or not) and can help them set and track against short and long-term saving goals. 

Creating a budget involves planning, decision-making and adjusting your habits over time. These are all valuable skills that can translate to other aspects of your life: maintaining a healthy diet, for example.


While budgeting for the whole school year is a challenge, it may be easier to break it down into smaller timeframes.


Being consistent with a college budget plan can also help you avoid getting into debt and start your post-grad financial life confidently. 

Remember that budgeting is an ongoing skill. Parents can help by reinforcing healthy habits and helping their kids think about long-term financial goals. 

College budgeting – a three step approach

Anticipate your expenses.

While there are many tips for how to make a budget, most lack highlighting the hardest part about budgeting in college: the unstable yearly income. 

At its core, budgeting depends on balancing your income and expenses. This is tricky as a college student since you don’t necessarily have a steady income to base your spending money off of.

For example, you may start the school year with savings from a summer internship. But then you have to wait out the pay gap between the money from your internship and starting a campus job. Throughout the school year, there are many times where studying takes priority over earning a paycheck.

Something to keep in mind: While budgeting for the whole school year is a challenge, it may be easier to break it down into smaller timeframes. One way of doing this would be creating a weekly budget. A weekly budget gives you more flexibility in tracking your expenses, and may be more likely to align with your spending. 

Here’s how you could do this:  

  • Start with projecting approximately how much money you’ll have available each month. This may be a combination of income and money from other sources. Even a ballpark estimate is fine.
  • Determine your monthly fixed expenses (like car payments). 
  • Look at your variable expenses for the upcoming week. This could include things like groceries, gas, social activities…you get it.
  • Add up all of those expenses and then subtract that amount from your expected monthly income. 
  • If there’s anything left over, try and pay yourself first: set aside a percentage of your income to go toward a savings account for an emergency fund.

Another way to control expenses: Dedicate a checking account for the items in your budget so you don’t mix these items up with what you have set for savings. 

After you’ve accounted for everything in your budget, hopefully there’s enough left to have a little fun. If not, weekends may be laundry and Netflix in your apartment. Now that we think about it…that sounds pretty good! 

Understand needs versus wants and prioritize

Determining needs and wants is a key when it comes to setting a budget. 

How do you do this? Try making a need versus want list. Start with saving for only your top three wants, writing out the benefits of each to determine which is a priority.

Here’s an example of how you could do this:

Let’s say you’ve identified three big purchases you’re saving for: a new laptop, a spring break trip and a down payment on car.

Be realistic about which are needs versus wants. Everyone says they need a vacation (and we hear you!), but the reality is, vacations are usually wants when it comes to money. 

Depending on the current condition of your old laptop or car, those two things might very well be needs, but which is the more pressing need? Parents can help students weigh these priorities.

The costs of attending college can be expensive enough for students, so it’s important to be realistic when you’re setting your budget.

The big takeaway with budgeting is this: Plan out your expenses in a way that works for you. Above all else, don’t spend more than you make (in whatever forms of income you might receive). This line of thinking can set you up for success as an adult. 


For students, college is a great time to start building your credit and boosting your credit knowledge. 


Track spending regularly

How do you keep track of everything? With the mix of extracurricular activities, exams and group project meetings, you’re probably not thinking about updating an excel spreadsheet because you spontaneously swiped your card to buy lunch.

Luckily, some tools do most of the work for you. A personal finance app can connect directly to your bank accounts and help you budget to understand your spending habits. 

Extra credit: establish a credit history

College students might be wary of opening a credit card for a couple of reasons: They may want to avoid debt (this is a valid reason) or may think they don’t need one. 

This is where mom or dad can be a great guide to credit card basics. As parents know, creditworthiness is an important factor in determining whether you qualify for things like an apartment lease or loan to start a business.

For students, college is a great time to start building your credit and boosting your credit knowledge. 

Some credit agencies suggest that you should use no more than 30% of your credit limit. This means if you have a credit card with a $1,000 limit, using no more than $300 in a billing cycle. Start by just using your credit card for basics like gas and groceries. If your credit line increases, stick to using the amount you can pay in full the following month. 

Managing a credit card is a new responsibility and it’s critical to avoid credit card debt. Using credit without having the means to pay it back can lead to serious consequences, potentially leaving you with debt for years to come.

If you tend to spend more than you can cover monthly, really consider if it’s the right time to get a credit card. Credit card debt could damage credit score you’re trying to build for your future.

All this may feel overwhelming, and we get it. Managing your money can do that, especially if you’re just starting out.

Just remember to take advantage of your resources, including your parents. Even though it can be a sensitive topic to discuss, financial wisdom from your parents is loaded with real-life experience. Not to mention, it’s free. 

Saving for the future starts today. See how Marcus can help.

This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes and nothing communicated to you herein should be considered tax advice. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of Goldman Sachs Bank USA, Goldman Sachs Group, Inc. or any of their affiliates, subsidiaries or division. Goldman Sachs Bank USA does not provide any financial, economic, legal, accounting, tax or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.  Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA or any its affiliates. Neither Goldman Sachs Bank USA nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.