By Mary Mone and Madison Heiser
Online Editor and Editor-in-Chief

Graphic by Chris Crymes

College is a time that can make or break people financially, and it can be challenging learning how to manage money and still be able to have fun. A budget is a personal financial plan used to predict and account for money earned and spent every month. In budgeting, it is important to balance goals and limitations, and these depend on a person’s financial needs.
According to the, the first step in creating a budget is to look into what goes into personal income and expenses. This means to look into how much money is made, how much money needs to be spent, and how much money needs to be saved. Students should first be aware of their total monthly income. They should then make a chart of their expenses including bills, gas, food and other costs. The most important expenses should be subtracted from the budget first – needs that account for shelter, food, transportation and other necessities. With the remaining money, students can factor in less important expenses, or “wants,” such as entertainment, shopping, etc.
A general rule of thumb for money-saving is the 50-30-20 model. According to NerdWallet, this rule designates 50% of an individual’s income should be spent on needs, 30% should be spent on wants, and 20% should be placed into savings. Depending on a student’s income, this can be difficult to achieve and there may be less room for wants. However, it is still important for individuals to place a portion of their income in a savings account for emergencies and unexpected expenses. This provides a cushion for students to stay afloat financially after unexpected changes.
When establishing a budget, it is best to underestimate one’s income while overestimating one’s expenses. This means students should base their budget off the “low end” of their income estimates. They should then round up all expenses to the “high end” of their estimated costs. This prevents individuals from maxing out their budgets while increasing the chance of having leftover spending money for wants each month. For example, if an individual makes $558 a month and needs to pay an insurance bill for $47 a month, rounding expenses to $50 and income to $550 could potentially provide $3 to $11 in “extra” money after expenses.
One financial factor that many college students forget about is credit. Most students do not have established credit, which is important in making significant financial decisions like buying a house, car, or applying for loans. A good way to build credit for future endeavors is to apply for a credit card. Companies such as Discover offer starter credit cards specifically designed for students. These cards typically have low limits so students can practice paying off their cards on smaller purchases. According to, when using a credit card, students should always be mindful of their balance and pay it off in full every month to avoid paying interest on their purchases. This means individuals should never put purchases on a credit card that exceed their budget each month.
If budgeting seems intimidating, students can take advantage of online financial resources such as banking apps and budget trackers from the convenience of their phones. Students should regularly check their bank account balances and purchase history to ensure the proper handling of their finances. Apps such as Mint and PocketGuard help individuals organize and manage their budget and expenses. A list of NerdWallet’s best financial apps for 2021 can be found at
There are a plethora of budgeting and saving tips online, and so much information and responsibility can make students feel overwhelmed. Nevertheless, everyone’s financial situation is different, meaning every budget is different, as well. College students should take some time to find out which budgeting formula works best for them.