7 Mistakes to Avoid When Budgeting in College

“Budgeting” is one of the most dreaded and stressful words of all time, especially for college students managing money for the first time.

Well, what if we told you that you’ve been approaching the concept of budgeting wrong this whole time? That it doesn’t have to be as scary, stressful and complicated as you think.

Buckle up, because we’re about to change your relationship with budgeting forever.

Here are 7 mistakes to avoid when budgeting in college.

1. Not having a goal to budget for.

Why do you want to budget? If your reason to create a college budget plan is to simply avoid going broke, you’ll likely fail because your motivation is too abstract.

What are you really trying to achieve? Are you hoping to save for something like, renting an apartment next year or backpacking through Europe with friends this summer? Spending a semester studying abroad or purchasing a new laptop? Building a $500 emergency savings stash? The more tangible your motivations and goals, the more successful you’ll be.

2. Thinking budgets are just about numbers.

That’s a recipe for failure. Instead, think about budgeting as a way to define your values and help you achieve the lifestyle you want by optimizing the tradeoffs of your decisions.

Do you really value eating out every day? Maybe you’re okay with cooking and saving that money for Coachella 2020 instead.

At the end of the day, you want your money to go to places that’ll ensure you survive and get to pursue happiness both now and in the future.

3. Not knowing your needs vs. wants, fixed vs. variable expenses, income, and saving goals.

In order to have a successful college budget plan, you need to know the following:

What are your income sources and expected monthly earnings? How much money do you bring in every month? This can include money from your parents.

What are your monthly college expenses? These can include the basics like food, housing, tuition, school supplies, and transportation.

Out of those expenses, what are the fixed or variable costs? For example, your rent is fixed. This means that it will be the same every month. Your apartment utilities (i.e. water) and transportation costs (gas) are probably variable. They will change from month to month.

What are your monthly wants? These can include subscription services like Netflix and Amazon Student Prime, entertainment or eating out budget.

Finally, what meaningful, attainable goals do you want to save towards? We recommend a “rainy day fund” at the minimum, in case emergency expenses come up (i.e. laptop gets stolen). These can be fun too, like for that cross-country road trip with friends!

At the highest level, always make sure you have enough cash to afford your needs before you turn to your wants and saving goals.

Download our College Budget Planner

Estimate the cost of college with College Ave's free budget planner

By providing your email address, you agree to our Privacy Policy, and you give College Ave permission to contact you. College Ave respects your inbox and will only send periodic emails.

4. Not budgeting in the time frame that works best for you.

There’s no universal time frame that works for everyone. You need to experiment with budgeting on a weekly or monthly basis, or based on your paycheck cycles.

For example, if you’re concerned about spending being too variable and living paycheck-to-paycheck, it may be best to budget based on your paycheck cycle.

We generally recommend the weekly budget though, because it’s the most approachable and helps you balance your spending the best.

5. Micro-managing your budgets down to the very last cent.

There’s enough for you to stress about in college. We don’t encourage you to do this unless you’re in a dire financial situation where every dollar can make or break you.

Instead, focus only on a few key areas of spending you know you can save on. Eating out, ride sharing, daily trips to the local cafe. You may notice you already consistently spend the minimum in a number of categories anyway. Save your time and mental energy for where it counts!

6. Wasting the money, you saved from spending less.

Often times, when you come under your budget, you end up wasting the savings by spending it on something unnecessary and forgettable. That defeats the point of budgeting—which is to ensure your money goes to the things that actually matter to you.

Instead, put those savings towards a saving goal or perhaps another spending category for next month. If you spend $50 under your budget for eating out this week, you can add an extra $20 towards your eating out budget for next week and $30 towards your flight home for Christmas.

7. Not using mobile apps to make budgeting and saving easier.

Some of you may enjoy recording your expenses in Excel or in a notebook. And that’s fine if it works. But for most of you, you’ll probably benefit from free mobile apps that make budgeting and saving easier. They can save you so much time, effort and stress.

For example, check out Pluto Money—a free mobile app designed to make budgeting and saving approachable for college students. It helps you avoid all the mistakes mentioned here.

Pluto first helps you set near-term saving goals for motivation, such as a #bucketlist travel goals or next semester’s expenses. Then you securely link your banks, so Pluto can suggest simple challenges tailored to your finances that you can take to save towards your goals.

For example, save towards a trip to Cancun by doing a “Spend less on eating out” challenge this week. If you spend $50 under your eating out benchmark, you can save that $50 towards Cancun! All of this is automatically tracked for you, and Pluto even nudges you with smart alerts like “Spend no more than 2x (~$10 each) on eating out the rest of this week.”

As a bonus, Pluto is the only place you can anonymously compare your spending to similar peers on the same campus. Talk about extra motivation and awareness.

By avoiding these 7 budgeting mistakes in college, you’re more likely to both financially survive and make the most out of college. Good luck!


Which product best suits you?

Interested in building your credit?

Set sights on a brighter financial future by establishing a positive credit history easily and safely with Ambition Card.

Ambition Card by College Ave
Find My Application