How to Manage Money in College With a Budget

Budgeting Tips and Software Tools for College Students

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Most college students need to take out loans to pay for their education, resulting in massive debts after graduation. But, this isn't the only expense that contributes to financial problems after graduation. The biggest issue in racking up unnecessary debt is due to reckless spending during the college years.

Managing money while attending college is necessary to keep post-graduation debt down. Follow these realistic budgeting tips for students and use personal finance software to set up and stick to a college budget.

Why You Need a Budget in College

A budget gives you conscious control over spending, which leads to learning financial management skills required for success in the real world after graduation. Students often feel peer pressure to spend without thought, and having a budget to refer to helps with determining whether there is enough money to pay for restaurant meals, drinks out with friends, nonessential clothing and other expenses.

As a serious student, you take on lot of responsibilities while getting a higher education, and keeping a budget might sound like it's a hassle. But, the few minutes spent on budgeting will free you up financially later on. The debt you acquire in college is more restrictive than a budget because that debt is going to cut into the income you need to get started with life after college.

Gather Information

To start your college budget, determine what your costs will be using these sources of information:

  • Freshman should talk to an experienced college student about expenses to expect.
  • The office of student life or student affairs at your college can give out information on expected expenses while in school. Just email or stop by the office to ask for the information.
  • Track all of your spending during the first two months of classes, right down to pizza, coffee and school supplies. Be honest with yourself and include everything you purchase. Record these amounts in the personal finance software list below, on a budget on paper or in a free budget spreadsheet.

Budgeting Software

Here is some of the best financial software for managing a college budget:

Windows: SplashMoney is easy to use and has more than enough features for a college student. It's $20 for the desktop version, and another $5 if you want synchronization with iPhone or Android apps. A free option is Microsoft Money Plus Sunset Deluxe. The online services no longer work in Money, so you can't download bank transactions (you can still import transactions, though), but it's still very usable and the price is right.

Mac: For Mac, iBank 6, its pricey for a college student and has more features than a student will use. A less expensive option is SplashMoney for Mac, mentioned above. GnuCash is free, and while it's not as elegant as iBank, it will do a great job at tracking spending and a budget.

Online: If an online app is more your style, PearBudget Online is great for simple budgeting and it costs only $5 per month after a 30-day free trial. ClearCheckbook is online personal finance software with a mobile optimized site that works great on a smart phone. is another great online option that is really popular with the college crowd, it's free and has iPhone and Android apps.

Mobile: Of course, there are some really great mobile budgeting apps with money management tools that don't involved a computer desktop or a web browser. Check out Pocket Money and Spend - Budget from the iPhone apps list or Nickel Tracker or EEBA, which are listed with other Android personal finance apps.

Budget Spending Categories

One you choose your budgeting tool, income and expense categories need to be defined in the software, spreadsheet or on paper. Here are the categories a college student needs to consider:

Income Categories

  • College costs paid directly by parents, or money parents give to the student specifically to cover college expenses
  • Part-time job income
  • Scholarships and grants
  • Student loans
  • Money from personal savings
  • Money from college savings accounts

Expense Categories

  • College tuition
  • College fees: activity fees, parking fees, lab fees
  • Books
  • Personal care: laundry costs, hygiene items
  • Supplies: notebooks, desk supplies, pens, book bag
  • Equipment: computer, reading lamp
  • Small appliances: mini-refrigerator, hot pot, microwave
  • Rent or on-campus housing
  • Food: groceries and dorm meal plans
  • Transportation: automotive expenses or gas money for friend's car, bus fare
  • Clothes
  • Insurance: the student may still be covered by parent's policy
  • Entertainment

After the budget categories are set up, allocate available income to your monthly expenses. You can run a budget report each week to see if you've overspent and you need to cut back in on nonessential costs to help to avoid overspending for the month. If you use a mobile or online app, you can probably set it up to show your spending trends on the home page so you can see if you are budgeting effectively at a glance each time you open the app.