Help Your College Student Create a Budget
College is expensive. Both parents and students know that they are investing a lot
of money in a college education. Some families have pieced together significant scholarships,
grants and loans in order to pay for a college education. This post is not about those
bigger financial issues that make a college education possible. It is about helping
your student create and live by a daily budget for his living expenses. Whether your
student must pay for his own expenses, or whether you partially or fully fund his
expenses, college is the ideal time for your student to learn to manage his money
Working together with your student to help her establish a budget may provide an opportunity
for you to talk with her about her priorities, her needs and wants, her interests,
and her goals. You will get to know your student even better. You will be helping
her to establish an important skill for after graduation, as well as helping her to
understand where her money goes now. She may already understand, or she may be surprised
to discover, how quickly little expenses add up. Your student's budget will be more
and more realistic each semester that she spends at college as she learns what true
costs are and what opportunities she may have to save. If she is just starting college,
her budget may be only an estimate and she will need to be flexible.
Thinking About Budgeting
Hopefully, your college student will be interested and willing to work at setting
up a budget. If he resists, try to insist. Help him understand the importance of understanding
where his money goes. Convince him that if he wants or needs more money, or more independence,
later, then he will have a more solid argument if he can demonstrate his spending
responsibility. Creating a daily budget is another step toward the responsible independence
that both you and your student seek.
Help your student decide whether he would like to set up a yearly, monthly, or semester
budget. A semester budget may make sense since expenses vary at different points throughout
the semester. Agree to create a budget of living expenses that does not include tuition
or set-up costs such as dorm room or apartment furnishings. This should be a budget
of the daily costs of living once your student is established.
Remember that your task is to get your student started and to help her determine realistic
costs. However, this is your student's budget and she will need to live with it. You
may or may not agree with her priorities, but she will need to make her decisions.
In order for the budget to be livable, your student will also need to be honest and
realistic about her expenses. This means that she will need to include all of the
things that she spends money on including, perhaps, alcohol or smoking or other entertainment.
Once you get her started, there may be a point at which you, as parent, need to step
back and let her continue. As difficult as this may be, it is part of her growing
Creating a Budget
Help your student think through the basics of a good budget. What are his sources
of income? Does he receive money from parents each semester, each month, each week?
Does he have savings from a summer job? Does he have a job on campus? Does he receive
scholarship money for expenses? Are there any other sources of income?
Help your student think about his expenses both fixed and flexible. Don't include
room and board unless your student lives in an apartment and has those expenses monthly
and if he is responsible for them. The idea is for this budget to cover those expenses
over which your student has control and responsibility. Your student may be surprised
about how many expenses he actually has food (other than meal plan), entertainment,
cell phone, textbooks, sports events, movies, car expenses (including campus parking
tickets?), travel expenses, fees, emergencies. This is where your student needs to
be honest with himself about the things on which he spends his money. He may need
to continually adjust this for a while as he discovers and remembers new things. Obviously,
if the budget won't balance, he'll either need to increase income or reduce expenses.
It may be difficult at first for him to see where he can reduce his expenses. He may
have a difficult time realizing, and admitting, that he may need to give up some of
his activities. Recognizing that there is a finite amount that he can spend is sometimes
There are many budget worksheets available to help you and your student create a budget.
You may find it most helpful, however, to create your own. Consider creating an excel
spreadsheet, or just use pencil, paper, and calculator. The important thing is that
it be as accurate as possible and that your student be able to keep it up as she goes
through the semester. If you choose to use a pre-made worksheet, there are several
options available at moolanomy.com. You may find one that works for you.
Staying on the Budget
Creating a budget is one thing, sticking to it is another. Anyone who has ever tried
to live on a budget knows that the plan is the easy part. Making the budget realistic
helps. Being motivated helps. Seeing the process as a positive experience and an experience
of learning about yourself and your priorities helps. One writer has suggested three
traits that are necessary to make a good budget system work: a positive attitude,
motivation, and being realistic. (Read the full article here.)
The work of staying on the budget will be up to your student. Agree together about
a few basics.
- How much follow-up will you have? Is your student on her own, or will she check in
with you periodically?
- Agree on credit card use. Credit card debt is a dangerous issue for many college students.
You may need to remind your student that credit card interest and charges should be
included in the budget expenses.
- Help your student be realistic about whether to have a job during the school year.
Some students feel that they must have a job to pay for expenses, but having a job
may take valuable time away from studying. If your student is having difficulty balancing
a budget, help him to consider carefully whether a school-year job is necessary and
- Remember that your student may need to be flexible at first to find the realistic
amount for some categories in his budget. He may need to adapt the budget, but should
attempt to keep it balanced.
- Suggest that your student keep a daily spending record in some form jotting down
everything he spends. This will be one of the most important tools for helping him
track where his money is actually going. Those pizza runs, sporting events, campus
club activities, parties, Greek life expenses, and other expenses add up more quickly
than many college students or adults realize.
- Your student may be surprised to find that other students are also working on budgets.
Spending time with those students, or sharing suggestions, may help him stay on track
and feel less peer pressure to spend.
Creating and sticking to a budget takes honesty, discipline, and hard work. However,
it is a useful way to feel in control of spending. Your student may or may not increase
his income or decrease his expenses, but he will know where his money is going, and
he will feel more in control. Working with your student to help him create his budget
will open new doors of communication and understanding between you. Keeping it all
as a positive experience is important for you both.
Excerpted from College Parent Central