Back-to-school budgeting 101 for college students

Published on

Establishing and sticking to a budget is an important life skill to learn, even for college students who are focused on keeping up their grades and getting a good job when they graduate. Budgeting may help them understand how much money they need to cover necessary monthly expenses.

Living within your means at a young age may lead to good credit scores and allow you to save money for your future, including your retirement, even though it may seem far away. It may also allow you to build more wealth over time. You may make a budget using several tools, including a budget app or a spreadsheet. However, your chosen method only works if you are disciplined and stick to your budget.

Here are some steps to creating your college budget.

Calculate your income

The first step is calculating your net income, which is the amount you receive after taxes. Your net income may include full- or part-time pay, money you receive from family or friends, and financial aid, such as grants and student loans.

If you work a set number of hours weekly, your monthly net income is easy to calculate. If your hours vary, determine your average income and use that as your budgeting base. If you are not sure, use a lower number to avoid overspending.1 If you make more than you spend, you may be able to save more or treat yourself to something special.

List your expenses

The next step is to list your monthly expenses, including housing, food, tuition, books, entertainment, and transportation. To get yourself in the habit of saving, create a savings expense on your monthly list. Then determine whether your other expenses are fixed (stay the same each month) or variable. Also, choose a priority for each cost. For example, food and rent would be critically important, while entertainment would be discretionary and a lower priority.

Once you list and categorize your expenses, determine the average monthly cost for each payment. Reviewing your bank and credit card statements may help you determine the correct figures to use.

Make changes as necessary

Total your average monthly expenses and compare them with your net income. If you make less than you spend, you may need to make some adjustments. Consider whether you might work more hours and still maintain your grades, but also pay attention to what expenses you may cut. For example, you might use coupons to save money on food or transportation, and you might consider borrowing books or buying used books instead of purchasing new ones.

Review your budget often

Once you develop your budget, you want to review it from time to time to ensure it still works for you. Update it regularly when your expenses change and every time you get a raise or scholarship.2

It is never too early to speak to a financial professional about your short-term and long-term financial goals after college. A financial professional can help you pursue paying off your student loans, set up your first 401k, plan for your future, and work towards building your wealth.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking # 1-05298171.


1 The go-to money guide for cash-strapped college students, CNBC,

2 Creating a Budget, Bank of America,

You may also like


10 practical home-buying tips to write home about

Thinking of purchasing your first home? Or finding a new house with more space? With inflation on the rise, market conditions are evolving which could impact your home purchasing decisions.

Interest rates are likely to increase


Mortgage shopping tips

If you're shopping for a mortgage, we'd love to help. Here are some tips we've compiled to get you started:

1. Know the difference between a mortgage lender (like Webster) and a mortgage broker

Mortgage brokers do not lend money;…


Know before you owe: mortgage and home equity key drivers

When applying for a mortgage or home equity loan or line, there are some equations that come into play. Here are the most common factors that will be calculated to determine your credit worthiness. 

Loan to Value

Loan to…

General Disclosures

The opinions and views in this blog post are those of the authors, and are not intended to provide specific advice or recommendations for any individual. Please consult professional advisors with regard to your individual situation.


Securities and insurance offered through LPL or its affiliates are:

Not Insured by FDIC or Any Other Government Agency

Not Bank Guaranteed

Not Bank Deposits or Obligations

May Lose Value

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Webster Bank and Webster Investments are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Webster Investments, and may also be employees of Webster Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Webster Bank or Webster Investments.

The LPL Financial registered representatives associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.

The Webster Symbol is a registered trademark in the U.S.