Personal Resource Center

8 Steps for Managing Your Money in College

College students at desks in classroom
Bag of money icon
Tip: Don't forget to consider all your sources of income, including babysitting, cutting grass, or tutoring.

3. Add up all your expenses

Next, figure out how much you're personally on the hook for each month. Be sure to include:

  • Tuition (if you're responsible for paying it)
  • Rent/housing
  • Utilities (power, water, etc.)
  • Insurance
  • Books and other school supplies
  • Food
  • Transportation expenses (such as gas money, bus fare, or Uber rides)
  • Cell phone

If you've never lived on your own before and aren't sure how much some of these items will cost, Quicken provides a breakdown1 of typical expenses. For things that change each month, such as utilities and food, take an average of how much you've spent over the past few months to get a ballpark idea of what you should budget. For large expenses that don't come every month, such as tuition, split the total cost into average monthly payments. For example, if you owe $5,000 per semester in tuition, divide that by six months. That way you know you'll have to set aside $834 per month to cover that bill when it comes. Alternatively, you can look into splitting major expenses into smaller monthly payments — such as through a college tuition payment plan2 — so you don't have to come up with the money all at once.


4. Get cash flow positive

Now it's time to figure out your cash flow situation and put a real budget in place. Subtract your expenses from your income. If the number is positive, congratulations!

On the other hand, if you end up with a negative number, don't panic. That simply means you'll need to make a few adjustments to your income and expenses.

First, look at your expenses. Are there any you can reduce or cut completely? For example, can you downgrade your premium Hulu account to the version with commercials? Can you start making coffee in your dorm before class instead of hitting up the local coffee shop every day?

Maybe you already live on a shoestring and there's not much to cut. After all, the phrase “starving student" exists for a reason. In this case, it's better to consider ways of earning more income.

Your own campus is a great source of job opportunities. You could work as an administrative assistant, mail room attendant, barista and more. If you're strong in a particular subject, consider working as a tutor — either through your university or on your own. If you have a knack for writing or building websites, consider branching out and offering freelance services online.


5. Make a plan for any 'leftover' money

Once you're earning more than you spend, make a plan for the money you have left over at the end of each month.

Start by paying yourself first. That means once your bills are covered, set aside some money in savings before spending on any fun stuff. It doesn't have to be much when you're just starting out — even saving $20 a month is better than $0.

Any money you have left over is your disposable income. That's your fun money for things like going to the movies, buying music, and eating at restaurants.

But how do you know if you're divvying up all your money the right way? A good rule of thumb to follow is the 50/20/30 rule:3

  • 50% of your income goes toward basic living expenses and essentials
  • 20% of your income goes toward savings, investing, and paying off debt
  • 30% of your income goes toward flexible spending (the fun stuff)

As a new college student, don't expect meet these numbers right off the bat. However, the 50/20/30 rule gives you solid guidelines to strive for.


6. Open a savings account

Once your bills are covered and you have a comfortable buffer in your budget, you'll want to begin setting aside some money into a savings account.

An emergency fund, as it's often called, will provide a safety net in case any unexpected expenses come up. That way, you don't have to rely on a credit card or risky loans.

To make sure you get the most bang for your buck, look for a savings account or CD to store your extra cash.


7. Apply for a credit card

As you get older, there will be more and more situations where you need good credit: renting an apartment, financing a car, buying a house, etc. However, graduating from college with good credit is difficult to do unless you've been using credit all along.

A credit card with few fees and a low limit can help you do just that. This shouldn't be an excuse to spend beyond your means — every purchase you charge should come out of your set monthly budget. But if you make a small purchase every month and pay off the balance by the due date, you'll be ahead of your peers when it comes to building credit.

If you're under 21 and don't have a full-time job, you'll need a parent, relative, or trusted friend to cosign on the credit card application for you. That might be a tall order, since their credit will be put at risk. So alternatively, ask if one of your parents can add you as an authorized user on one of their cards — but only use their credit cards in an emergency or if you will be able to pay them back.


8. Stick to your budget

Once you've done all the work to get a budget in place, be sure you stick to your plan and periodically adjust it if necessary. A free tool such as Mint4 can do a lot of the heavy lifting for you — simply sync all of your bank accounts to get a detailed view of where your money is coming from — and where it's going.

Important Disclosure Information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. Erin Michelle Sky, "20 Average Monthly Expenses to Include in Your Budget." Quicken, published January 25, 2023, accessed February 20, 2024. Back
  2. Sabine Martin, "Paying a Tuition Bill: What to Know About Installment Plans," USNews.com published July 6, 2023, accessed February 20, 2024.

  3. Kelly Anne Smith and Jenn Underwood, "What Is The 50/30/20 Rule?" Forbes Advisor. Published June 1, 2023, accessed February 20, 2024. Back
  4. Mint.intuit.com, accessed February 20, 2024. Back