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6 Tips for Creating a Student Budget (w/ Example)

College is an exciting time for any young person. For most, it represents their first experience with independence and financial freedom, which can be exhilarating while also presenting some challenges. 

At Addition Financial, we work with our members as they plan a college education for themselves or their children. One of the things we get asked about most often is creating a student budget .

Since even students who have learned about financial literacy at home may struggle with budgeting at college, we’ve created this guide with six tips to help you create a student budget. We’ve even included an example to help you out! Here’s what you need to know.

#1: Know What College Expenses to Expect

Let’s start with what the average college student should expect to see for expenses. Major expenses such as tuition, room & board and books may be covered by parents, but some students may need to budget for these things themselves.

Here are some of the line items that we would include on a college student budget:

• Tuition 
• Room and Board
• Utilities (may not be included in room & board)
• Transportation
• Entertainment

Depending on how a student is financing their tuition, room and board, they may not need to include these items on a budget. For example, a student who has a full ride or financial aid from a college or whose parents are taking care of those expenses can eliminate them and focus on the other expenses listed.

#2: Use the Average Cost of College as a Benchmark

Calculating average costs for college students can be tricky because tuition varies wildly depending on where you attend school. Tuition at a top-tier private university may be $60,000 per year or more, while attending a community college may cost less than $5,000 per year.

We still think it’s useful to look at national averages. According to EducationData.org , the average total cost of college in the United States as of 2022 can range from $25,487 per year for a four-year degree from an in-state college, all the way up to $43,161 per year for a four-year degree from an out-of-state college.

Here are some averages for expenses that should be included in your student budget:

• Tuition – The average cost per year for all four-year colleges is $28,775. For two-year colleges, the average annual cost for tuition is $3,621.
• Room & Board – The average cost at a four-year college ranges from $9,395 to $12,540. For two-year schools, it can be between $7,008 to $12,730. (Keep in mind these numbers include students who rent off-campus.)
• Books & Supplies – Costs typically range from $1,000 to $1,500 per year regardless of which type of school you attend.
• Additional Expenses – Additional annual costs may include food outside of school, entertainment, clothing, and transportation. Costs can vary greatly depending on where you attend school and whether you live on or off campus, but in most cases, you can expect to spend between $2,500 and $5,000 per year.

Keep in mind that these categories encompass both fixed expenses and variable expenses, so you should be prepared to build some wiggle room into your budget to ensure you have extra money to pay for the unexpected.

#3: Choose the Right Budgeting Tools

One of the best things about attending college in the 21st century is that students have access to an array of digital tools that they can use to create a budget. Of course, you can choose to keep your budgeting analog, but most people prefer the ease of using a budgeting app that they keep on their phone.

Parents and students may benefit from planning how much they need to save for college. You’ll need to know the current tuition at the school you want to attend, plus how many years it will take to get your degree and how much money you have saved now.

Here are some other tools that can be useful for creating a college student budget. Each of these can serve as a spending tracker to help you stick to your budget:

• Mint is a free budgeting app from Intuit, the same company that makes QuickBooks. You can connect the app to your bank account and view a spreadsheet of your spending, which is useful if you need to adjust your budget.
• EveryDollar is another free app that uses financial expert Dave Ramsey’s Baby Steps to create a zero dollar budget (meaning that it deducts spending until you reach zero.) The one thing we don’t love is that this app doesn’t link to your bank which means you’ll need to enter transactions manually.
• Goodbudget is an app with both free and paid versions. The paid version costs $7 per month or $60 per year if you pay in advance. It uses the envelope method where money in each category gets placed in a digital envelope. Once the envelope is empty, you can’t spend any more money in that category until the next month.

There are dozens of other apps to choose from. You can keep track using a Google sheet if you prefer not to install an app.

We also want to mention two Addition Financial resources that can help you with your college budget. We have written blog posts about finding an affordable college apartment and how to find a paid internship to help you with your expenses.

#4: Create a Budget Spreadsheet

Even if you intend to use an app for budgeting, it may be useful to create a spreadsheet first to figure out your spending categories and play with the numbers.

The spreadsheet you create should include any income you have from employment and other sources, such as an allowance provided by your parents. We’re going to give you an example. For this example, we'll use a student whose tuition is covered by their parents and/or financial aid, and who lives off campus. 

As you can see, your total outgoing should equal your total incoming, accounting for any money you might put into savings. You may choose to add additional categories. For example, you might want to invest some of your money or donate some to charity. You might also want to budget for travel on your break.

It is important to budget for unexpected expenses. If you don’t incur any, you can always move that money into savings at the end of the month.

#5: Create an Emergency Fund

We believe that everybody should have an emergency fund. It’s particularly important for college students, who may be relying on a job or parental support to pay their expenses. If you should lose your job or one of your parents does, you may find yourself short. We recommend having six months’ worth of expenses saved.

As a student, your monthly expenses may be low or high depending on where you go to school and what your living situation is. Many college students share an apartment with several people, which can help to keep rent costs low. However, you should still have an emergency fund on hand in case something unexpected happens.

Our hypothetical student would need a minimum of $9,600 in savings (we’ve excluded the line item for savings to calculate the amount needed) to be safe. 

#6: Make a Detailed Spending Plan

Your budget will help you understand how much you have to spend in each category, but we also suggest making a detailed spending plan that will help you save money wherever possible.

For example, most college students can expect a student discount on certain things. You might get a discount at local restaurants or on entertainment items such as movie and theater tickets. Finding out where those discounts are available can help you save money every month.

You can save money on books by buying used ones or renting textbooks instead of buying them. New textbooks are expensive and you may be surprised by how much you can save if you’re willing to consider alternatives. You can also sell your textbooks when you’re done using them to put a little money back into your pocket.

It’s also worthwhile to scope out the local grocery stores and transportation options to save money on those line items. The grocery store that’s the closest to your dorm or apartment may not be the most affordable. You may want to consider sharing a Costco membership with your roommates or friends, so you can buy staple items in bulk.

Many colleges offer free transportation on and off campus. If you don’t have a car, you may want to check out the cost of monthly passes for public transit or have a plan for sharing Ubers and Lyfts whenever possible.

Finally, if you have roommates who share expenses for utilities, you should talk about how to minimize your expenses. Your power company may offer a lower rate for off-peak usage and that can save you money every month.

Budgeting for college can help you make sense of your spending habits and avoid overspending and getting into debt. The six tips and sample budget we have included here can serve as a jumping-off point for you to create a student budget and spending plan that works for you.

Are you looking for a checking account that’s designed for college students? Addition Financial’s Aspire Checking is just what you need to manage your finances throughout your college career. Click here to learn more .

Posted on Aug 1, 2022

College , Money Management

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Everyone deserves to succeed. But today, for too many Canadians, especially Millennials and Gen Z, your hard work isn’t paying off like it did for previous generations. Your paycheque doesn’t go as far as costs go up, and saving enough seems harder and harder. It doesn’t have to be this way. Every generation should get a fair chance to get ahead.

One of the biggest pressures on people right now is housing. Young Canadians are renting more than ever and being priced out of their communities. Families are finding it difficult to get a good place to settle down. The cost to build homes is too high, and the time it takes to finish projects is too long. We need to build more homes in Canada, and we need to build them by the millions.

The Prime Minister, Justin Trudeau, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, and the Minister of Housing, Infrastructure and Communities, Sean Fraser, today unveiled the federal government’s ambitious housing plan, Solving the housing crisis: Canada’s Housing Plan , supported by new investments from the upcoming Budget 2024. At the heart of this plan lies a commitment to make housing affordable. No hard-working Canadian should have to spend more than 30 per cent of their income on housing costs. No Canadian should have to live without knowing they have a safe and affordable place to live.

The plan lays out a bold strategy to unlock 3.87 million new homes by 2031. This includes a minimum of 2 million net new homes, on top of the Canada Mortgage and Housing Corporation’s forecast of 1.87 million being built anyway by 2031. Federal actions in this plan, in Budget 2024, and taken in fall 2023 will support at least 1.2 million new homes, and we call on all orders of government to build at least 800,000 more homes by 2031.

Here’s what we’re doing:

Building more homes by bringing down the costs of homebuilding, helping cities make it easier to build homes at a faster pace, changing the way Canadian homebuilders manufacture homes, and growing the workforce to ensure we get the job done. This includes:

• A Public Lands for Homes Plan to lead a national effort to build affordable housing on federal, provincial, territorial, and municipal lands across the country. We will partner with homebuilders and housing providers to build homes on every possible site across the public portfolio and ensure long-term affordability.
• $15 billion in additional loans for the Apartment Construction Loan Program to build a minimum of 30,000 new rental apartments, in big cities, small towns, and rural communities alike, will be proposed in Budget 2024. With this additional financing, the program is on track to build over 131,000 new apartments by 2031-32.
• Launching Canada Builds, a Team Canada approach to building affordable homes for the middle class on under-utilized lands across the country. Canada Builds combines federal low-cost loans with provincial and territorial investments to scale up construction on rental homes for the middle class, from coast to coast to coast.
• Supporting Indigenous Peoples in urban, rural, and northern areas . We will also provide additional distinctions-based investments for Indigenous housing to be delivered by Indigenous governments, organizations, housing, and service providers.

Making it easier to own or rent a home by ensuring that every renter or homeowner has a home that suits their needs, and the stability to retain it. We’re putting measures to protect tenants against unfairly rising rent payments, leverage rental payment history to improve credit scores, increase the Home Buyers’ Plan withdrawal limit, extend mortgage amortizations for first-time home buyers buying newly built homes, and more:

• Launching a Tenant Protection Fund to provide funding to legal services and tenants’ rights advocacy organizations to better protect tenants against unfairly rising rent payments, renovictions, or bad landlords.
• Leveraging rental payment history to improve credit scores, helping you qualify for a mortgage and better rates.
• Increasing the Home Buyers’ Plan withdrawal limit by $25,000 and extending the grace period to repay by an additional three years.
• Extending mortgage amortizations for first-time buyers buying newly built homes . Mortgage insurance rules will be amended to allow 30-year mortgage amortizations exclusively for first-time home buyers purchasing new builds.

Helping Canadians who can’t afford a home by creating more affordable and rental housing – including for students, seniors, persons with disabilities, and equity-deserving communities – and eliminating chronic homelessness in Canada. This includes:

• Providing $1 billion for the Affordable Housing Fund to build affordable homes and launching a permanent Rapid Housing Stream to build on the success of the previous three rounds of the Rapid Housing Initiative.
• Launching a $1.5 billion Canada Rental Protection Fund to protect and expand affordable housing.

The Prime Minister also announced new measures included in Canada’s Housing Plan to attract, train, and hire the skilled-trade workers Canada needs to build more homes.

• $90 million for the Apprenticeship Service , creating apprenticeship opportunities to train and recruit the next generation of skilled trades workers.
• $10 million for the Skilled Trades Awareness and Readiness program to encourage high school students to enter the skilled trades – creating more jobs and opportunities for the next generation of workers to build Canada up.
• $50 million in the Foreign Credential Recognition Program , with a focus on residential construction to help skilled trades workers get more homes built. Like our previous $115 million investment, this funding will remove barriers to credential recognition, so workers spend less time dealing with red-tape and more time getting shovels in the ground.

Transforming our housing system and solving the housing crisis will take a Team Canada effort. No one level of government, home builder, not-for-profit, or community can do it alone. We need every partner pulling in the same direction to build the homes Canadians need.

This is about realizing Canada’s promise of affordable housing for every generation – and it’s just one of the things that we are going to be doing in Budget 2024. Alongside these measures, we’re getting healthy food on kids’ plates, delivering stronger public health care, making life more affordable, and creating good jobs to make sure every generation can get ahead.

“We are changing the way we build homes in Canada. In our housing plan and Budget 2024, we are delivering ambitious action and investments to build more homes, make it easier to rent or own, and help the most vulnerable with stable housing. This is about restoring fairness for every generation, and housing is at the heart of that.” The Rt. Hon. Justin Trudeau, Prime Minister of Canada

“We are announcing today real, tangible measures that are going to help more younger Canadians get those first keys of their own. We are using every tool at our disposal to deliver housing without delay – because we want to make the dream of homeownership a reality for younger Canadians.” The Hon. Chrystia Freeland, Deputy Prime Minister and Minister of Finance

“Canada can and will solve the housing crisis, and we’re going to do it by getting every home builder, not-for-profit, mayor, city councillor, and premier pulling in the same direction to build the homes Canadians need.” The Hon. Sean Fraser, Minister of Housing, Infrastructure and Communities

Quick Facts

• The Prime Minister today also announced the creation of a new Deputy Minister of Public Lands and Housing position within the Privy Council Office. The Deputy Minister will oversee and report on federal efforts to build more homes for Canadians through the use of public lands, providing a single point of accountability within the public service. An appointment to this position will be announced later today.
• Since 2015, the federal government has helped almost two million Canadians find a place to call home.
• Restore generational fairness for renters, particularly Millennials and Gen Z, by taking new action to protect renters’ rights and unlock pathways for them to become homeowners. Learn more .
• Launch a new $6 billion Canada Housing Infrastructure Fund to accelerate the construction or upgrade of essential infrastructure across the country and get more homes built for Canadians. Learn more .
• Top-up the Apartment Construction Loan Program with $15 billion, make new reforms so it is easier to access, and launch Canada Builds to call on all provinces and territories to join a Team Canada effort to build more homes, faster. Learn more .
• Support renters by launching a new $1.5 billion Canada Rental Protection Fund to preserve more rental homes and make sure they stay affordable. Learn more .
• Change the way we build homes in Canada by announcing over $600 million to make it easier and cheaper to build more homes, faster, including through a new Homebuilding Technology and Innovation Fund and a new Housing Design Catalogue. Learn more .
• The Apartment Construction Loan Program , a $40 billion initiative that will be topped up with an additional $15 billion in Budget 2024 to boost the construction of new rental homes by providing low-cost financing to homebuilders. Since 2017, the Apartment Construction Loan Program has committed over $18 billion in loans to support the creation of more than 48,000 new rental homes. With our recently announced measures , the Apartment Construction Loan Program is now on track to help build over 131,000 new rental homes across Canada by 2031-32.
• The  Affordable Housing Fund , a $14+ billion initiative that supports the creation of new market and below-market rental housing and the repair and renewal of existing housing. It is designed to attract partnerships and investments to develop projects that meet a broad spectrum of housing needs, from shelters to affordable homeownership. As of December 31, 2023, the Fund has committed $8+ billion to repair or renew over 150,000 homes and support the construction of more than 32,000 new homes.
• The Housing Accelerator Fund , a $4 billion initiative that will be topped up with an additional $400 million in Budget 2024 to encourage municipalities to incentivize building by making transformative changes, such as removing prohibitive zoning barriers. To date, the federal government has signed 179 Housing Accelerator Fund agreements which, combined, will fast-track an estimated total of over 750,000 housing units across the country over the next decade.
• The Rapid Housing Initiative , a $4 billion fund that is fast-tracking the construction of 15,500 new affordable homes for people experiencing homelessness or in severe housing need by 2026. The Rapid Housing Initiative also supports the acquisition of existing buildings for the purpose of rehabilitation or conversion to permanent affordable housing units, focusing on the housing needs of the most vulnerable, including people experiencing or at risk of homelessness, women fleeing domestic violence, seniors, Indigenous Peoples, and persons with disabilities.
• Progress on these and other programs and initiatives under Canada’s National Housing Strategy are updated quarterly at  www.placetocallhome.ca . The Housing Funding Initiatives Map  shows housing projects that have been developed.
• On November 9, 2023, we signed a historic Housing Accelerator Fund agreement with the Province of Quebec.
• Building on the success of the 2023 agreement, the federal government will continue to work closely with Quebec to build more homes for Quebecers, including by delivering additional funding through the Housing Accelerator Fund and the new Canada Housing Infrastructure Fund.
• The Government of Canada’s Budget 2024 will be tabled in the House of Commons by the Deputy Prime Minister and Minister of Finance on Tuesday, April 16, 2024.
• Save more young families money and help more moms return to their careers by building more affordable child care spaces and training more early childhood educators across Canada. Learn more .
• Create a National School Food Program to provide meals to about 400,000 kids every year and help ensure every child has the best start in life, no matter their circumstances. Learn more .
• Secure Canada’s AI advantage through a $2.4 billion package of measures that will accelerate job growth in Canada’s AI sector, boost productivity by helping researchers and businesses develop and adopt AI, and ensure this is done responsibly. Learn more .
• Provide the Canadian Armed Forces with the tools and capacity they need to defend Canada and protect North America, advance Canada’s interests and values around the world, and support its members with an overall investment of $8.1 billion over five years and $73 billion over 20 years. Learn more .

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