For College Students

Spending Money for College Students

You don’t have to sacrifice time with your friends to smartly spend and save. Here’s how to do it.


Spending money sounds fun and exciting. Budgeting, not so much. But they’re actually two sides of the same coin! The better you budget your money, the more fun it is to spend without worrying about going broke. Here are some tips on how to manage your money as a college student. 

Why It’s Important to Spend Smart and Budget a Bunch in College

When you’re in school, the money crunch is real. For starters, you don’t have a ton of cash coming in. But on top of that, there’s always a party to go to or new sneakers to buy. 

But if you’re not careful with your money, you can blow through your cash in a single weekend. And then, you’re stuck eating cafeteria food and watching Netflix for the rest of the month. 

That’s not what you had in mind for college life, is it? But how are you supposed to have a life if you’re always pinching pennies?

We get it. It’s called adulting and it takes a lot of practice to learn how to manage your money. But trust us when we say that there are many important reasons to save your money when you’re in school. Pizza and beer might be at the top of your list right now, but here are a few more.

When you save your money, you can:

  • Keep cash handy for unexpected expenses
  • Build a cushion to rent your first apartment after college
  • Fund your own startup
  • Invest in the stock market and make your money grow
  • Learn good money habits early in life
  • Avoid the stress of living paycheck to paycheck

How to Develop Smart Spending Habits in College

You’re in college and well on your way to becoming an independent adult. Just like you’re learning skills that’ll help you on the job, college life is also an opportunity to become money savvy. 

It might take some trial and error, and that’s OK! Sometimes, you have to try different budgeting techniques to find the one that works for you. These are a few of the most popular budgeting strategies for college students.

Zero Based Budgeting

The first step to saving is to spend all your money. Wait, what? Well, kind of.

This method is called Zero Based Budgeting, aka ZBB. And it doesn’t mean that you should skip bill payments and go nuts on Amazon. Not at all! It means that you should cover your basic living expenses and then decide exactly how you’ll spend the money that you have left. 

ZBB is great because it encourages you to get creative with your cash and it’s not restrictive. At the same time, it helps you establish priorities. As long as you’ve got your fixed expenses covered, you’re free to use the rest of your dough however you see fit.

Of course, you might not have a ton left. But whatever you’ve got, you must decide how you’ll spend it ahead of time. That way, you can resist temptation when dope sunglasses make eyes at you. Why? Because you’ve already decided to put those $100 in your savings account. And that’s that.

The 50-30-20 Rule

There’s a little math involved here, but it’s not bad. Bear with us, it’s worth it — especially if you’re saving up for a big-ticket item, like a new car.

With the 50-30-20 budgeting rule, you assign 50% of your income to your living expenses. For most college students, this includes housing, food, clothes, healthcare, and transportation.

Then, you take 30% of your budget and use it for discretionary expenses. These are all those dinners out with friends, spring break trips, plus any other luxuries you want to give yourself. You decide how you spend that money and what’s worth splurging on.

Finally, the remaining 20% must go to savings goals. But even in this category, you get to choose what you do with your money! Some options include an investment account, buying crypto, or even setting money aside for the down payment on a new set of wheels. 

The Envelope Method

OK, so this one’s old school and you might’ve seen people do it back in the day. But hey, it works! Especially when you need a little extra curbing your spending habits.

The Envelope Method is simple. You stash your credit cards and debit cards in a safe place in your dorm room and make the switch to hard cash. And it works for two reasons:

  1. You physically separate your money into different categories and can see where it’s going.
  2. It makes you aware of every time you reach into your envelopes to pay for something.

If this option feels like a lot of work, you can find a good in-between. Make online payments for your fixed expenses, use electronic transfers for your savings, and keep your discretionary funds in envelopes.

How to Save Money on Common Discretionary Expenses

If you’ve noticed that nonessentials tend to eat away at your budget, you’re not alone. It happens to the best of us. The good news is that there are many ways to save money without denying yourself those guilty pleasures.

Keep Up with the Fashion Trends

Clothes are an expense that you can always count on — but then there’s that jacket that’s all the rage. Is that a need or just a must-have? 

Sticking to your budget is tough when you wanna run out to the mall every week and get the latest threads. Here are some hacks for you to look fashionable on a budget:

  • Get into thrifting. It’s all the rage these days, and eco-friendly too!
  • Swap clothes with your roommates. It instantly doubles your wardrobe and cuts down on your clothes expenses.
  • Budget to buy clothes for special occasions. If you have a big event coming up, plan ahead of time to know exactly how much you can afford.
  • Buy end-of-season sales. You can snag some great finds for a fraction of the cost.

Practice Self-Care

If store-brand moisturizer makes your skin flakey, don’t spend Lit class scratching your calves! Instead, you can pick and choose the toiletries that are worth spending on. As long as you put it in the budget and it’s actually affordable to you. 

And if it’s not something you’re willing to break the bank for, try these ideas:

  • Buy your toiletries in bulk at the beginning of the school year. This saves you trips to the store and money, too!
  • Look for coupons and combine them with sales. When you find good deals, consider stocking up.
  • Make your own products with all-natural ingredients. Good for your wallet and the earth.
  • Ask for samples at the department store. They won’t last forever, but they can hold you up for a couple of weeks.

Party and Dine Out on a Dime

Entertainment is important. Plus, it’s not realistic to think that you’ll avoid Postmates or bars altogether. You’re better off finding a way to budget for these expenses because more likely than not, they’re gonna happen.

These handy tips will also help you save money when you go out:

  • Pre-drink at home. You’ll spend less at the nightclub and could end up drinking less, too.
  • Have munchies ready for when you get back home. If you stock up on snacks, you’ll feel less tempted to stop by a drive-thru.
  • Buy restaurant gift cards or add them to your birthday list. That way, you won’t have to dip into your bank account next time you go out to dinner.
  • Make smart menu choices. The healthiest meals also tend to be the least expensive.

The Role Your Parents Play in Spending Your Own Money

Every family has its own dynamics. The amount of control that your parents have over your budget depends on how you get your money in the first place. If they’re giving you an allowance, they may want to know how you’re spending the money. Especially if you’re always asking for more before the end of the month.

If you’re on your own and have a steady income, you can still ask your parents for advice on how to manage your money. Their life experience can provide valuable insight into budgeting tips and saving techniques.

Spending Terms

Now that you’re a budgeter and a saver, it’s time to become familiar with some financial lingo:

  • Budget: A spending plan that organizes your expenses, according to your income.
  • Balanced Budget: When your income matches your expenses.
  • Budget Surplus: When you have money left over after covering all your expenses.
  • Budget Deficit: When you don’t have enough money to cover your expenses.
  • Cash Flow: The movement of money in and out of your bank account.
  • Disposable Income: Money that you can spend as you wish.
  • Emergency Funds: Money set aside to cover unexpected expenses.
  • Fixed Expenses: Costs that remain constant in your budget.
  • Income: The money that you receive from work, allowance, or gifts.
  • Savings: Money that you set aside for future use. This could include emergencies, investments, or short-term goals.
  • Spending Habits: The ways in which you use your money.
  • Variable Expenses: Costs that vary from month to month.

Resources to Develop Healthy Spending Habits

Want to create a personal spending plan and learn how to budget for life? These are some of the best resources to help you do just that. For an even bigger list of recommendations, head over to our roundup of the best money management books for college students.

Most Practical

If you’re looking for useful tips that you can literally apply every day of the year, check out 365 Ways to Live Cheap: Your Everyday Guide to Saving Money. Perfect for the frugal lifestyle of a college student.

Best Lifelong Companion

To develop a habit that sets you up for a successful financial future, take a look at The Budgeting Habit: How to Make a Budget and Stick to It! This is the kind of book you can always go back to when you need a budgeting refresh.

Modern Budgeting Solutions

Nowadays, there are many apps that let you track your spending. By connecting with your bank account and identifying spending patterns, these apps give you a clear idea of your habits so you can adjust as needed.

Once you’re ready to take control of your spending, remember to use your budget as a live tool. Make it part of your everyday habits and make sure it reflects your priorities. This is the best way to keep your spending in check and achieve your financial goals.

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About the Author

Lucia Caldera

Lucia Caldera is a writer who specializes in personal finance. Her goal is to create approachable content that sparks financial wellness and unlocks personal growth. Lucia's work reflects her passion for financial education as the key to reducing the wealth gap for future generations.

Last updated on: May 15, 2024