<img height="1" width="1" style="display:none" src="https://q.quora.com/_/ad/bdd9d941ae754c498fe2d2326d029ffa/pixel?tag=ViewContent&amp;noscript=1">

How much should I budget for college?

Key Takeaways:

  • It is very important to find out how much you should budget in order to attend the school of your choice.
  • A comprehensive budget should include not only the cost of attendance, but also the fixed and variable expenses you will incur.
  • Fixed expenses include cell phone, health insurance, credit card debt, and other debt you may expect to pay.
  • Variable expenses include meal plan, travel, clothes/weather-related expenses, food, textbooks and supplies, transportation, and laundry, among others.
  • The golden rule of budgeting says that 50% of income should go towards fixed expenses; 20% towards goals; and 30% should be allocated towards variable expenses.
  • Download our budget template for an easy-to-use spreadsheet!

To make a fully informed decision about where you’ll be spending the next few years of your life, it is very important to find out how much you should budget in order to attend the school of your choice. However, gathering this information may actually be trickier than you think. First, you can certainly go to the school’s website to see tuition, room and board, and general cost of attendance information. But what about all the other expenses, fixed and variable, that you will incur?


What are fixed expenses?

An important part of your budget is a category called fixed expenses. This is where you will be listing all of your recurring bills and costs that are mandatory and stay relatively consistent each month. Some call this category “survival needs” because it includes things like rent, utilities, and transportation. Fixed expenses have to be paid by an individual each month regardless of the change in use. For example, your monthly transportation pass can be considered a fixed expense because even though you may choose to walk to school one week, your monthly train/bus pass does not change in price.

If you’re putting together a comprehensive college budget, your fixed expenses should include tuition, fees, and on-campus housing (if you choose to live on campus). Again, whether you stay on campus each weekend, choose to travel, or go home, your housing costs will remain the same. To figure out what exactly should go in this category, look at your bank statements for the last 3-4 months and find recurring expenses. Then, evaluate if you foresee having those costs moving forward. If you do, it’s a clear indication that they should be included in your budget as fixed expenses.  


Fixed expenses for college students

Tuition, fees, and room/board at your school are mandatory and are not likely to change month-to-month. 

If you will be living off-campus, you will need to budget for rent and utilities. We suggest researching average prices specific to the area in which your school is located. Don’t forget to leave space for internet in your budget, since it won’t necessarily be included in your on-campus housing bill. An average price for internet is $65 per month. Multiply monthly payments by 9 months to figure out your school-year budget.

When it comes to other mandatory expenses associated with moving out and attending school, here are a few line-items that seem to get forgotten, but are very important to consider:

What are variable expenses?

Variable expenses change in cost based on your use or volume. Examples of variable expenses include eating out at restaurants, clothing, and coffee. If you decide to buy coffee more often, your cost for that line-item (coffee) will increase for the month. Variable expenses as a category on your budget can be easily manipulated based on the lifestyle choices that you make each day or each month. The good news is that this is an area where you can reduce your expenses fairly easily by cutting down on frequency or volume of your activities. None of the variable expenses should be considered  “survival needs”, so sometimes this category is also called “fun money”.

Although this category can be a great source for cutting down costs, unfortunately this is also an area of the budget where students tend to overspend. It is important to be mindful of variable expenses and to track your spendings closely to make sure you don’t go above the allocated amounts. If you do go over, you can always move some money from another line-item to cover the deficit. This category can be flexible, yet needs a lot of maintenance and attention to make sure you stay on track.


Variable expenses for college students

In this section you may add line-items or take some away if they don’t pertain to you or your situation. This is why this portion of the budget is called “variable”, and should stay fluid and flexible, based on your personal circumstances.   

“Food” is always a highly contested line-item on a college student’s budget. Some students consider food a fixed expense because they have to purchase a meal plan and its cost doesn’t change month to month. Whether you choose to eat in the cafeteria or not, you are still going to get charged that semester fee if the meal plan is mandatory. Food can also be considered a fixed expense because it’s a “survival need”; you need to eat food to stay alive. Most students put groceries in their fixed expense category.

On the flip side, many other students consider food a variable expense. If you’re talking about going out to eat at restaurants, getting take-out, or doing an occasional run to a cafe, food can be considered a variable expense. And although you need to eat in order to survive, going out to dinner with your friends is not necessarily a “survival need”, it’s just something fun to do. Therefore, those kinds of expenses need to be carefully considered and allocated properly in your budget. Keep in mind, it is perfectly fine to have food-related line items in both fixed and variable expense categories.

If you choose to have a car while at school, don’t forget to budget for the following line-items:

  • Car payments
  • Parking
  • Gas/Car Insurance

Your social life will depend solely on you and your preferences, so the final few line-items you will have to consider carefully and allocate what YOU think you will spend in one school year. We are giving you averages, just as a head start, but this section should really be customized based on your preferences:

  • Clubs/Sports/Greek Life
  • Entertainment/Social Activities
  • Gifts
  • Personal products/salon services
  • Miscellaneous/Emergency

[How much does the average college student spend on living expenses?]

When it comes to budgeting, what is considered “income”?

One of the first things you’ll want to do when creating a budget is to figure out your income. For budgeting purposes, income can be considered any in-flow of funds on a consistent or an inconsistent basis. For example, a consistent income flow is your weekly paycheck from a part-time job or work-study. (Make sure to only put down an after-tax amount so that your budget accurately reflects what gets deposited to your bank account). If you saved for college and plan to use that money on a regular basis, your withdrawals from a savings account can be considered income. If your parents give you a weekly or a monthly allowance - that’s your income. If every year your grandparents give you a check for your birthday and you can estimate how much it’s going to be - that’s your income. If you played a lottery and won some money (even though you couldn't predict that and it’s a totally inconsistent inflow of funds), the winnings should go in your income category for that month. If you’re taking out loans or have scholarships/grants to help cover the cost of tuition - that’s your income. So the point is, for budgeting purposes, your income can be considered any money that you have or will have an easy access to help cover your college and living expenses.


What is a golden rule of budgeting?

You may have heard or seen the “golden rule” of budgeting: 50/20/30. But what does that actually mean? The three numbers represent the percentages of your income that should be allocated to different categories. 50% of income should go towards fixed expenses; 20% towards goals; and 30% should be allocated towards variable expenses. Of course, for some students these numbers will differ a little, depending on their geographical location, living arrangements, and other personal circumstances. For example, if you’re renting an apartment in the city, your housing cost (fixed expense) will be a lot higher than for someone living at home and commuting to school. So take the golden rule of budgeting with a grain of salt, but also remember that it’s not a bad idea to try to adjust your budget to get as close to 50/20/30 as you can.


Should I have savings and financial goals as a college student?

Yes, whether you’re a college student or not, everyone should at least try to have savings and financial goals. You probably have heard that your savings should reflect at least 6 months of your monthly living expenses. For a college student this number may seem astronomically high, especially if you include tuition. For this reason many college students don’t even try to have savings. This is not a good approach because having savings, ANY savings, is still better than having nothing to fall back on at all. Your savings, often called “emergency fund” or a “buffer”, doesn’t have to be 6 months of living expenses. Try to start small - putting away $100 a month will get you to $1,200 in one year. That’s not a bad cushion to have if you find yourself in a pinch.

In general, your budget should include 3 financial goals to work towards. Your short-term goal is something that you’ll be saving for for less than a year, such as an emergency fund or an item that you would like to have. Your medium-term goal is 2-3 years out. This can be a savings for a car down-payment or a trip. A long-term goal is something more substantial, like a downpayment on a house, and should take you more than 5 years to get to.

If this all seems overwhelming, start with something simple. Try to save for 3 or 6 months for something specific, and once you get there, reward yourself with that gift for yourself. You will feel accomplished and this process will give you a glimpse into the type of budgeting and goal setting that is useful and attainable.  


Make your budget!

Now that you have a comprehensive budget list, you’re on your way to make a financially educated decision about the school that you are going to attend. Feel free to use these budget categories to create your own budget, or to share with your family members. 

Download Edmit's college student budget template to get an easy-to-use spreadsheet that you can download and customize, with the most common income and expense categories, and averages for cost of living categories like insurance, meals, entertainment, and transportation.

Download budget template