How to Set a Student Budget (Template Included)

Let’s face it – neither college or university is cheap. From the overpriced meal plan to the hundred-dollar textbooks, expenses add up quickly, especially if you don’t have the right budget in place. That’s why we’ve created this guide (and a student budget template) to help you stay financially afloat while you're getting your education. 

Step 1: Figure out where your money is coming from

The first step to setting a budget is to figure out where your money is actually coming from. Whether you’re financing your education through student loans, scholarships, an RESP, a part-time job, or your parents, your budget starts off with your income and decreases with every expense. Knowing where your money is coming from, how you’re spending it, and when you’ll need to pay it back will give you the confidence to decide what’s right for you.

Therefore, as a student, it’s a good idea to find more than one stream of income to maximize your budget and prepare for any potential issues. Relying solely on student loans can be risky as you might not receive the amount you expected. You might only get your tuition and books paid for, but what about food, shelter, and transportation? And if your program fees are covered by a renewable scholarship, you could still lose it if you don’t meet the minimum GPA requirement. 

So staying on top of your money can help you focus on school – you won’t constantly be worrying about your cell phone and internet bills or wondering whether you can afford to eat out that week. 

Working part-time or starting a side-hustle while you’re in school is a great way to create an ongoing income. If you find it hard to balance your coursework with a job, you can also consider working full-time (or as many hours as possible) in the summer. That way, you’ll be able to save a lot at once and spend this money accordingly throughout the year. 

Step 2: Estimate how much you spend

After you figure out where the money is coming from, the next step is to establish where the money is going. List out all your expenses and divide them into two categories: fixed expenses and variable expenses. 

What are fixed expenses?

Fixed expenses include anything you’re paying for on a regular basis that doesn’t change in price. Below are a few examples – you’ll notice that most of them are student necessities.

• Tuition 
• Rent or residence fees
• Meal plan
• Utilities (eg. hydro, electricity)
• Internet
• Phone plan
• Transportation pass
• Student car insurance
• Tenant insurance
• Gym membership 
• Subscriptions (eg. Spotify, Netflix, Prime)

What are variable expenses?

Variable expenses are the purchases that can fluctuate in price. Although some variable expenses are living necessities (e.g. groceries), the price still changes because you make the decision on how much to buy. Other variable expenses could be one-time purchases – such as sneakers or a laptop – and you can choose whether to buy these items based on their price. Below are a few more examples of some variable expenses you may make as a student. 

• Textbooks
• Clothing
• Coffee 
• Eating out
• Entertainment (e.g. movies, concerts, events)
• Technology

You should be aware of which category each of your expenses fall into, so you can determine what you can and can’t cut down. Fixed expenses are generally much harder to cut down on, so prioritize saving on your variable expenses. Use this information to create a rough estimate of each month’s spendings for both types of expenses. 

Step 3: Calculate your budget for each month

Now that you know where your income is coming from and you have a rough estimate of your spending, you can calculate your monthly budget. At the start of the month, take your income and subtract the amount of money your fixed expenses cost – the remaining amount should be your budget for all variable expenses. 

For instance, if your total monthly income is $2,000, and your fixed expenses only include your rent, utilities, tenant insurance, and bus pass, totaling to $1,500, your “living” budget is $500. 

Step 4: Set goals and start saving money

Budgeting isn’t just about making ends meet. If you don’t want to live paycheck to paycheck, your next step is to start saving money. You can decrease the amount of your current budget while setting aside the rest. For example, instead of spending $500 on your variable expenses for the month, you could aim to spend $350. Skipping out on a few coffee runs, limiting your UberEats orders, or cutting down on your online shopping can save you that $150.  And instead, you can put it towards a savings account or invest it for your future (and maybe pay off your OSAP loans quicker). 

A good budgeting goal should be challenging yet attainable. Just because you have enough money to live comfortably, doesn’t mean you should eat out everyday. At the same time, if you want to save more, try to do so without limiting yourself to $50 for a month’s worth of groceries. Health is wealth. 

You can also adjust your goal each month to find your perfect balance of spending and saving. If this month’s goal was a breeze, you can lower the amount for the following month and see how it goes. On the other hand, if you have trouble making ends meet, try raising your budgeting goal so you can stress less about money. 

Step 5: Consider investing any extra cash

Once you’ve saved up a solid emergency fund, it’s time to start putting your money to work. Investing your spare cash can help you earn passive income in the form of interest, all without you having to lift a finger. For instance, putting $1,000 into a 3-year GIC with a 4.5% interest rate could net you an extra $141 by the time you graduate. 

To maximize your investment income, you’ll want to take advantage of a Tax-Free Savings Account (TFSA), which lets you invest any sum within the account without having to pay taxes on your earnings. You start accumulating contribution room from the year you turn 18, and can open a TFSA once you reach the age of majority in the province or territory where you live.

It’s important to note that you should start investing only if you don’t have high-interest debt, such as student loan debt, which would cost you more than what your investments might make. While federal student loans have been interest-free as of April 2023, you may still have to pay interest on the provincial portion of your student loan.

Step 6: Keep track of everything in a student budget template 

It isn’t just enough to keep your income, expenses, and goals in the back of your mind. With so many different purchases to make as a student, you could forget to factor in your math textbook or a few coffees here and there. Keeping track of everything in one place will hold you accountable everytime you swipe your card, ultimately helping you reach your financial goals. 

We’ve got you covered with our own budgeting worksheet for students. Anytime you receive income or make a purchase, you can record it here to keep track of your goal’s status. Click the link below to access the student budget worksheet and its instructions to start your tracking. 

The bottom line

Getting an education isn’t cheap, but with the right budgeting tools and the right mindset, you can start saving money early. It’s important to establish your income, estimate your expenses, and determine a budget that works for you. Be sure to follow our five easy steps and use our student budgeting worksheet so you can stay well-off financially while you’re in school. 

ALSO READ

• Why you need a roommate expense tracker
• How to save money as a college student
• 5 ways to make more than you spend in university
• What is a TFSA?
• GIC Basics