College Student Budgeting 101

Jun 15, 2016


How to Make Sure Spending Money Lasts through the School Year

College students are heading back to campus, their bank accounts replenished with summer job money or some other source of funds. Will it be enough to last all year? There are ways to improve the odds, say the experts from the Pennsylvania Institute of Certified Public Accountants (PICPA). 

College students face a lot of expenditures on campus, not only for books, meals, and rent, but also probably for a pizza or two. Careful planning can increase the likelihood that students won’t run out of money by spring break.

Banishing the Budget Blues

Mention the word “budget” and most students roll their eyes with dread. But being on a budget doesn’t mean giving up everything. In fact, creating a budget and sticking to it means creating options so money is available to enjoy a splurge or two over the long haul. The best part is anyone can create an easy-to-follow budget.

Top Budget Tips

  • Start now. 
    Develop a budget at the end of the summer while the coffers are full. If family is contributing to college expenses, make them part of the planning process. Make sure everyone is on the same page as to who is paying for what and when.
  • List income. 
    Write down all sources of income, including scholarships, money from parents or grandparents, and jobs. Will the money be received all at once at the start of the fall semester or over the course of the school year? How often the money comes in will affect cash flow.
  • Calculate fixed expenses. 
    Expenses such as phone, rent, car payments, and utilities fall in this category.
  • Calculate variable expenses. 
    Food, laundry, entertainment, gas, and clothes may be higher one month versus another. Look at past receipts to create an estimate for these variable monthly expenditures. 
  • Allow for emergencies. 
    It’s important to include a sum each month to help cover unexpected costs, such as a computer crash or trip to the doctor.
  • Compare. 
    How do income and expenses add up? If projected expenses exceed projected income, it’s time to reevaluate the spending plan. Look for ways to cut costs by eating at home more often, getting a roommate, making coffee at home rather than grabbing a cup on the way to school, or taking public transit instead of driving.
  • Track. 
    Once the school year kicks off, track expenses for a few months. You will then be able to determine if adjustments need to be made. Are there overages affecting the budget? Make corrections immediately. Don’t let a small deficit this month become a huge deficit over the course of the year.
  • Reward.
    The best way to resent a budget is to never have any flexibility in it. Set aside a small amount each month for a special treat.
  • Don’t quit. 
    Some months may be easier to navigate than others, but don’t give up. Keep the long-term goal in sight.

Dealing with a Shortfall

Sometimes budget shortfalls happen. Here are a few ways to get back in the black:

  • Part-time job. 
    Campuses offer students many choices for part-time work, including the bookstore, student center, fitness center, and library, The local community can also be a source of part-time employment. Many jobs offer flexible hours around class schedules.
  • Parental guidance. 
    Before you go anywhere else, talk to your parents about your short-term cash flow needs. Perhaps they can provide a loan until the next payday.
  • Emergency loan. 
    Emergency short-term loans may be an option if a student doesn't already face repaying a lot of student loans. Be wary of high interest rates on short-term loan options and piling more debt on top of existing loans.

Ultimately, it’s wise to avoid things like cash advances on credit cards, which may seem like a quick short-term solution, but may carry high interest rates or fees. Use credit cards wisely. Don’t rack up balances that will be a struggle to pay off when the bill arrives. Worse yet, don’t amass credit card debt that will haunt you long after graduation.

A CPA Can Help

By creating a budget and sticking to it, college students will develop healthy money habits that will benefit them not only while they’re in college, but also for years to come. If someone in your house is heading off to college soon, consider working with a CPA. A CPA can help you develop a plan to pay for higher education by analyzing your current situation and determining the best course of action with regard to your personal financial situation.

If you have questions about your personal financial planning or need help finding someone to assist you, talk to your CPA. To find a CPA in Pennsylvania by location or area of expertise, visit to CPA Locator

Original publication date: Sept. 2, 2013

The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premiere statewide association of more than 22,000 members working in public accounting, industry, government, and education. Founded in 1897, the PICPA is the second-oldest state CPA organization in the United States.

Money & Life Tips are a joint effort of the AICPA and the Pennsylvania Institute of Certified Public Accountants (PICPA), as part of the profession’s nationwide 360 Degrees of Financial Literacy program.