How to Create a Student Budget: A Step-by-Step Guide

Track your monthly income and expenses, dividing them into essentials (like rent and food) and non-essentials (like entertainment), to manage your money better.
Save money by using student discounts, buying second-hand items, and purchasing in bulk.
Cook your own meals to cut costs and reduce spending on unnecessary things like subscriptions.
Take advantage of free or cheap entertainment options such as campus events, outdoor activities, and student clubs.
Use budget-friendly transportation like public transport or biking, and consider part-time jobs to earn extra money and gain experience.

The easiest way to budget as a college student to understand your income’s true worth and how to prioritise your expenses. Tuition fees are not the only costs you have to worry about during your studies abroad; there are other mandatory expenses such as accommodation and food. All of these tighten your budget and limit your options when it comes to the fun stuff. Worry not, we have you covered with a lot of tips and ideas on how to save money as a student.

How to make a budget plan, for college students in 4 easy steps

Why do you need a budget plan? It helps you stay in charge of your own money: based on your monthly income, how much do you need to spend and what do you do with the rest? With a monthly plan, you will become more aware of your finances and how to spend or save them.

How do you do that? You break the process into four clear steps:

Budget plan

Step 1. Write down your monthly income

Simply write on a piece of paper how much money you have available each month.

Step 2. Understand what you spend your money on

This is the second step you must take in order to learn how to budget as a student because it’s important to understand what you spend your money on before you can start making cuts or budget-friendly choices. The easiest way to start is with a list of all your potential expenses.

For example:

Tuition fees – probably your largest expenses;
Accommodation – is usually the second biggest expense students have to cover; also, the type of accommodation you pick influences how much you pay – staying in a dorm or sharing a flat is typically cheaper than renting an apartment on your own;
Utilities – very likely you’ll have to cover the cost of water, electricity, internet, and heating;
Transport – think about how you’ll go to uni, whether you’ll be walking, biking, driving, or using public transport and how much each option costs;
Food – can you cook or do you prefer eating out? The first option is of course much cheaper;
Books and supplies – depending on your field of study, you might have to buy certain supplies and books;
Personal items – things like toiletries, clothes, and shoes;
Entertainment – as a student, you’ll have plenty of opportunities to spend your money on movies, hanging out with friends in bars or pubs, or any other fun activities;
Emergencies – it’s always a good idea to have some money set aside for any unexpected events.

Divide your list into essentials (e.g. accommodation, utilities, food) and non-essentials (books, entertainment, etc).

Step 3. Do the Math

This is the part where you subtract expenses from income until you reach a near-zero point. What it means is to find a purpose for every dollar so no money remains unaccounted for. It doesn’t mean, however, that you will spend everything you have that month!

You can use several methods to organise your budget, but one of the most popular is the 50/30/20 method. Allocate your income like this:

50% for Needs
30% for Wants
20% for Goals

Needs include all the expenses you must pay every month such as rent, food, and utilities.

Wants are extra things you want but can live without like a Netflix subscription, a new pair of shoes, or a night out. Goals are your savings for particular purposes like buying a house or going on vacation as well as general savings for unforeseen situations.

The 50/30/20 method can really work, but it should be used more like a rule of thumb because your specific situation might not work well with these percentages, especially if you live on a very low income. There are also some alternative methods which might work better for you: the 80/20 Rule and the 70/20/10 Rule.

The 80/20 Rule means you set aside 20% of your income for savings and the remaining 80%you spend however you want.

The 70/20/10 Rule allocates 70% of your income to living expenses, 20% to paying debt, and 10% to savings.

If you find it challenging to do this budget plan on your own, you can try using an app like Mint or YNAB to help you with it.

Step 4. Track what you spend

Now that you have a good plan, you can start tracking your money. Throughout the month, take note of everything you spend and refer back to your plan. Don’t just buy a coffee, but cut that budget off from your Wants allowance. Doing this, you will notice your habits and see if you’re about to spend more than you planned on optional things like entertainment.

Before the new month, you can adjust your budget plan in accordance with any observations or changes that occurred the month before.

8 key tips to save money while studying

Once you’ve done the groundwork, it’s time to look into some ideas of how to save money easily as a student. Many of these ideas are very simple things you can do, but when you put them all together they add up, and you will see your budget improving.

1. Shop smart

Shopping is something you can’t avoid, but you can certainly be smart about it and save money:

Take advantage of student discounts, there will be plenty: a lot of places offer student discounts, from public transport to cinemas and sometimes even restaurants. Have a look for student deals or ask the staff about it. Also, you can get a student card like ISIC (International Student Identity Card) for a small cost and enjoy even more discounts.
Buy Second-Hand: there are a lot of things you can buy second-hand and help more than your own pocket; you get a chance to help the environment as well. You can find second-hand books, clothes, bikes, furniture, and a lot more. You’ll find them in local shops or sites like eBay.
Bulk Purchases: there are some things you can buy in bulk and save money, for example, food items like cans or essentials like toilet paper.

2. Save on food

If this is your first time away from home, you may be tempted to eat out a lot, but that will have a big impact on your finances. Instead, you should start cooking at home. Not only is it cheaper but also healthier. There are plenty of easy recipes, and you can find everything you need to know with a quick internet search. You can also share your meals if you live with one or more roommates. Cooking larger meals costs less, and if you all share in the expenses, you’ll save money further. Plus, cooking together is fun.

3. Limit luxuries

If you start to think about it, you may realise that a lot of things we are used to are something of a luxury, and you can actually live without them. At least for a while. Here are some examples:

Cut unnecessary subscriptions; for instance, maybe you have a premium music streaming service like Spotify, but the free version works just fine;
Borrow books from the Library instead of buying them;
Make your own coffee, it may not taste like Starbucks, but it will make your wallet thicker.

4. Take advantage of some free entertainment

Going to the movies or the theatre is certainly great, but it can cost a lot. So, why not enjoy some free stuff while you’re a student?

You can attend campus events: look it up, and you’ll see that your university probably organises quite a few free events where you have the chance to meet more students like you;
Choose to relax in nature: a walk in the park, hiking, or a day at the beach is still free and great for your well-being.
Join student clubs: this is another great way to meet people and attend all sorts of events and activities for free or at a very small cost.

7. Use Public Transport

If you already have a car or are thinking about buying one, first consider the alternatives which are a lot more budget and environmentally friendly. Public transport always comes with some discounts for students (and in some countries, it can even be free). Buying a bike is much cheaper than a car and gives you a good exercise session every day on your way to uni. And you can even walk for no cost at all if your accommodation is close enough to campus (keep this in mind when you choose where to live!).

8. Work Part-Time

If your visa allows, consider a part-time job. There are plenty of opportunities for students from waitressing and dog walking to remote jobs like translating or managing social media accounts. Have a look at this article to learn more about the kind of jobs you can get as a student. And meanwhile, keep in mind that working as a student has other benefits as well such as gaining work experience and networking, both of which will be a gold mine when you graduate and need to find a full-time job.

Some extra financial advice for university students

The money management tips for students we discussed already are great ways to save and live a comfortable but affordable life as a student. However, there are still a couple more things you shouldn’t forget about.

Open a Student Bank Account. Many banks offer accounts specially designed for students, with no (or minimal) fees. Do your research well and be sure to open your account at a bank that offers these benefits.

Have a plan for big expenses. No one wants them, but sometimes unexpected situations occur that come with significant costs. For example, you might need to take an urgent trip home, or you might have a medical emergency. In certain situations, having student insurance can be of great help. Have a look at what it covers. It's good to be prepared.
Our final tip on how to budget at uni is to keep educating yourself on the subject. Many universities have workshops about financial literacy which can be a great help in understanding your money and learning how to use them in your best interest.

In conclusion...

Managing your finances as a student can be challenging, but with the right strategies, it's definitely possible. By tracking your income and expenses, using discounts, cooking at home, enjoying affordable entertainment, and choosing budget-friendly transportation, you can save money and stay within your budget. Additionally, working part-time can provide extra income and valuable experience. With careful planning and smart choices, you can enjoy your student life without financial stress.

Being away from home in a new country doesn’t have to be scary. If you’re prepared and plan your budget well, you will have financial security during your studies.

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Frequently Asked Questions (FAQs)

1. How can I learn how to budget as a student?

Start by understanding your monthly income and listing all your expenses. Divide these expenses into essentials, like rent and food, and non-essentials, like entertainment. Use budgeting methods such as the 50/30/20 rule, where you allocate 50% of your income to needs, 30% to wants, and 20% to savings. Track your spending regularly and adjust your budget as needed. There are also apps and online tools that can help you create and manage your budget easily. Additionally, many universities offer workshops on financial literacy that can provide valuable budgeting tips and strategies.

2. How do I start creating a budget plan?

Start by listing all your sources of income and all your expenses. Divide your expenses into essentials like rent, utilities, and food, and non-essentials like entertainment. Allocate your income accordingly and use a budgeting method that works for you, such as the 50/30/20 rule.

3. What are some ways to save money on groceries?

Cook at home instead of eating out, buy in bulk, and take advantage of sales and discounts. Plan your meals in advance to avoid impulse buying and reduce food waste. Shopping at local markets can also help you save money.

4. Is it worth getting a part-time job while studying?

Yes, a part-time job can help you earn extra money and gain valuable work experience. Just make sure it doesn't interfere with your studies. Look for flexible jobs like tutoring, working in a café, or remote work that you can fit around your class schedule.

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